BANK OF CREDIT and Co (MERCE
HGION: LIMITE,
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On Saturday, 6th July 1991, in the wake of the the act..ons taken worldwide against the BCCI Group, The Commissioner of Banking made a decision that BCCHK should remain open for business. Presumably this decision was based on information availabl to the Commissioner of Banking in BCCHK'S accounts and by scrutiny of BCCHK's operation which was carried out in a spot audit done by the Commissioner's Office during the above period. We are of the view that the expression of confidence in BCCHK and keeping BCCHK open, resulted in BCCHK's depositors and other customers being rassured, and indeed Saturday's trading proceede i without incident. The withdrawal of deposits was higher than normal but not unduly so.
Nevertheless, BCCHK took measures to further reassure the public and its customers. Saturday 6th July, 1991, BCCHK's liquid assets were partly assigned to The Hongkong & Shanghai Banking Corporation Limited ("the Hongkong Bank"), and a line of credit was extended by the Hongkong Bank at commercial rates. The Commissioner of Banking is aware of this, his representatives being present at the meetings on Saturday. Although the line was granted on Saturday, it was only availed of to the extent of HK$200 million to enable 13 to withdraw cash in anticipation of increase i withdrawals of cash on Monday which never occurred. The facilities were repaid on Monday since which date по facilities were availed.
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The requirement of the Commissioner of Banking to close BCCHK on Monday was a difficult decision, particularly given the previous confidence expressed by the Commissioner and subsequent steps taken by BCCHK. It is however not our intention to criti:ise his decision. The decision has been made, and BCCHK and BCCI Finance have remained closed for one week.
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S660 SÞ8 258
(3SNOH 009) 301330 SWWOO
OS:8T
60-80-1661
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