XN000022-1975-10-24 — Page 5

FRIDAY, OCTOBER 24, 1975

TWO OTHER PROVISIONS IN THE BILL SEEK TO MAKE IT AN OFFENCE TO SOLICIT DEPOSITS BY FRAUDULENT OR RECKLESS MISREPRESENTATION, AND TO IMPOSE A LIABILITY FOR COMPENSATION FOR FINANCIAL LOSS SUFFERED IN THIS WAY OR THROUGH NEGLIGENT MISREPRESENTATION.

THE MAXIMUM PENALTY FOR A PERSON WHO INDUCES ANOTHER TO DEPOSIT MONEY, OR ENTER INTO AN AGREEMENT TO DO SO, BY FRAUDULENT OR RECKLESS MISREPRESENTATION IS A FINE OF $1,000,000 AND IMPRISONMENT FOR SEVEN YEARS.

ANOTHER BILL PUBLISHED TODAY, THE BANKING (AMENDMENT) (NO. 2) BILL, SEEKS TO MAKE A NUMBER OF RATHER SPECIALISED AND TECHNICAL AMENDMENTS TO THE DANKING ORDINANCE.

ONE OF THE PROVISIONS IN THE DEPOSIT-TAKING COMPANIES BILL IS ALSO REFLECTED IN THE BANKING AMENDMENT BILL THIS PROPOSES THAT A BANK'S LENDING TO ANY ONE CUSTOMER NEED NOT BE LIMITED TO THE EQUIVALENT OF 25 PER CENT OF THE BANK'S CAPITAL AND RESERVES, PROVIDED THE EXCESS IS COVERED BY A FORM OF GUARANTEE ACCEPTABLE TO THE COMMISSIONER OF BANKING.

ANOTHER CLAUSE PROPOSES TO REMOVE THE AUTOMATIC QUALIFICATION AS A LIQUID ASSET OF TREASURY BILLS AND

CERTAIN SECURITIES ISSUED OR GUARANTEED BY OVERSEAS GOVERNMENTS, OTHER THAN THE BRITISH GOVERNMENT. SUCH TREASURY BILLS AND SECURITIES WILL BE TREATED AS LIQUID ASSETS IF THEY ARE SPECIFIED BY THE FINANCIAL SECRETARY AND PUBLISHED IN THE GAZETTE.

AMONG OTHER PROVISIONS IN THE BILL IS ONE TO ENABLE A BANK TO MAINTAIN LIQUID ASSETS AT A FIGURE MORE DIRECTLY RELATED TO ITS CURRENTLY OUTSTANDING DEPOSIT LIABILITIES- AND ANOTHER WHICH PROVIDES FOR GREATER FLEXIBILITY IN VARYING THE SPECIFIED LIQUIDITY RATIO IN EXCEPTIONAL CIRCUMSTANCES.

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