C164
Appointment of chief executive.
Maintenance of
reserve.
BANKING BILL
(2) Any person who contravenes this section commits an offence and is liable (a) on conviction upon indictment to a fine of $100,000 and to imprisonment
for 12 months; or
(b) on summary conviction to a fine of $50,000 and to imprisonment for 6
months.
74. (1) Every authorized institution shall appoint a chief executive of the institution who shall be-
(a) an individual; and
(b) normally resident in Hong Kong.
(2) Every director and every manager of an authorized institution which contravenes subsection (1) commits an offence and is liable on conviction upon indictment or on summary conviction to a fine of $50,000 and, in the case of a continuing offence, to a further fine of $5,000 for every day which the offence continues.
PART XIV
SHARE CAPITAL, RESERVE AND DIVIDEND OF AUTHORIZED INSTITUTIONS
75. (1) Every bank incorporated in Hong Kong shall, before any dividend is declared, appropriate to its published reserve out of the published profit of each year, after due provision has been made for taxation-
(a) a sum equal to not less than one-third of such published profit; or
(b) such lesser sum, if any, as may be necessary so that the aggregate of the bank's paid-up share capital and its published reserve is not less than $200,000,000.
(2) Every deposit-taking company which is incorporated in Hong Kong shall, before any dividend is declared, appropriate to reserve out of the profit of each year,. after due provision has been made for taxation
(a) a sum equal to not less than one-third of such profit; or
(b) such lesser sum, if any, as may be necessary so that—
(i) in the case of a registered deposit-taking company, the aggregate of the company's paid-up share capital and its reserve is not less than $20,000,000; and
(ii) in the case of a licensed deposit-taking company, the aggregate of the company's paid-up share capital and its reserve is not less than $150,000,000.
(3) No deposit-taking company shall pay any dividend out of the profits of a year previous to the year in respect of which the dividend is declared unless the aggregate of the company's paid-up share capital and reserve after such payment will be-
(a) not less than $20,000,000 in the case of a registered deposit-taking company;
and
(b) not less than $150,000,000 in the case of a licensed deposit-taking company, after such payment.
(4) Every director and every manager of a bank which contravenes subsec- tion (1), and of a deposit-taking company which contravenes subsection (2) or (3), commits an offence and is liable-
(a) on conviction upon indictment to a fine of $200,000 and to imprisonment
for 2 years; or
(b) on summary conviction to a fine of $50,000 and to imprisonment for 6
months.
BANKING BILL
76. (1) Every authorized institution shall-
(a) maintain a provision for its bad and doubtful debts, if any; and (b) before any profit or loss is declared, ensure that such provision is adequate.
(2) For the purposes of subsection (1), an authorized institution shall consult with the Commissioner.
(3) Every director and every manager of an authorized institution which contravenes subsection (1) or (2) commits an offence and is liable-
(a) on conviction upon indictment to a fine of $200,000 and to imprisonment
for 2 years; or
(b) on summary conviction to a fine of $50,000 and to imprisonment for 6
months.
77. (1) A bank incorporated in Hong Kong shall not transact banking business in Hong Kong unless its share capital issued and paid-up is not less than $100,000,000, deduction having been made in respect of a debit balance, if any, appearing in the profit and loss account of the bank.
(2) Every director and every manager of a bank which contravenes this section commits an offence and is liable on conviction upon indictment to a fine of $500,000 and to imprisonment for 5 years and, in the case of a continuing offence, to a further fine of $25,000 for every day during which the offence continues.
C165
Maintenance of adequate provision for bad and doubtful
debts.
Minimum paid-up share capital of
licensed banks.
78. (1) A bank incorporated in Hong Kong shall not pay any dividend on its Restriction on shares or distribute any extraordinary profits unless-
(a) all items of expenditure not represented by tangible assets have been
completely written off; and
(b) in the case of a distribution of extraordinary profits, the aggregate of its paid-up share capital and published reserve after such distribution will be not less than $200,000,000.
(2) A deposit-taking company which is incorporated in Hong Kong shall not pay any dividend on its shares or distribute any extraordinary profits unless—
(a) all items of expenditure not represented by tangible assets have been
completely written off; and
(b) in the case of a distribution of extraordinary profits, the aggregate of its paid-up share capital and reserve after such distribution will be not less than
(i) $20,000,000, in the case of a registered deposit-taking company; and (ii) $150,000,000, in the case of a licensed deposit-taking company.
(3) Every director and every manager of a bank which contravenes subsec- tion (1), and of a deposit-taking company which contravenes subsection (2), commits an offence and is liable-
(a) on conviction upon indictment to a fine of $200,000 and to imprisonment
for 2 years; or
(b) on summary conviction to a fine of $50,000 and to imprisonment for 6
months.
PART XV
LIMITATIONS ON LOANS BY AND INTERESTS OF AUTHORIZED INSTITUTIONS
payment of dividends.
79. (1) For the purposes of sections 83, 84 and 85, "unsecured" means granted Interpretation. without security, or, in respect of any advance, loan or credit facility granted or financial guarantee or other liability incurred with security, any part thereof which at any time exceeds the market value of assets constituting that security; and "security" means such security as would, in the opinion of the Commissioner, be acceptable to a prudent banker or deposit-taking company, as the case may be.
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