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24 1971

CENTRAL BANK ACT, 1971

PART II

Licensing and Supervision of Banks

Restriction on carrying on of banking business.

7. —(1) Subject to the provisions of this Act, a person, other than the Bank, shall not, on his own behalf or on behalf of any other person in or outside the State, carry on banking business or hold himself out or represent himself as a banker or as carrying on banking business unless—

(a) he is the holder of a licence, and

(b) he maintains a deposit in the Bank of an amount determined in accordance with section 13 of this Act.

(2) For the purposes of this Act a person shall (save as is otherwise provided by this Act) be deemed to hold himself out as a banker—

(a) if, being a body corporate carrying on any business, the name of the body includes any of the words “bank”, “banker” or “banking” or any word which is a variant, derivative or translation of or is analogous to any of those words, or

(b) if, being an individual, he carries on any business under a name or title (other than his own name without any addition thereto) which includes any of the words “bank”, “banker” or “banking” or any word which is a variant, derivative or translation of or is analogous to any of those words, or

(c) if, being an unincorporated body of persons carrying on any business, the name under which the body carries on that business (not being in the case of a partnership the name or names of one or more of the partners without any addition thereto) includes any of the words. “bank”, “banker” or “banking” or any word which is a variant, derivative or translation of or is analogous to any of those words, or

(d) in any case, if by the use, in an advertisement, circular, business card or other document, of any of the words “bank”, “banker” or “banking” or any word which is a variant, derivative or translation of any of those words or any word or phrase analogous thereto, he holds himself out or represents himself as conducting or being willing to conduct banking business.

(3) Subsection (1) of this section shall not apply during such period as may be determined by the Bank to a person who holds himself out as a banker but is not carrying on banking business and who held a banker's licence in force immediately before the commencement of this section or a licence which has been revoked.

(4) Subsection (1) of this section shall not apply in relation to the Agricultural Credit Corporation, Limited, the Industrial Credit Company, Limited, the Post Office Savings Bank, a trustee savings bank certified under the Trustee Savings Banks Acts, 1863 to 1965, a building society, an industrial and provident society, a friendly society, a credit union, an investment trust company or the manager under a unit trust scheme in respect of the carrying on of the business of the scheme.

Exemption of persons from section 7.

8. —Where, by reason only of a person's use in a name or title of any of the words “bank”, “banker” or “banking” or any word which is a variant, derivative or translation of or is analogous to any of those words, the person would be deemed to be holding himself out as a banker, the Bank may exempt the person from the provisions of section 7 of this Act if, in the opinion of the Bank, the person does not in fact carry on or propose to carry on hanking business and does not otherwise hold himself out or represent himself as a banker or as carrying on banking business.

Grant of licences.

9. —(1.) Subject to the provisions of this section, the Bank may, in its discretion, grant or refuse to grant to any person applying to it for the grant thereof a licence authorising the holder to carry on banking business.

(2) The Bank shall not refuse to grant a licence without the consent of the Minister and unless it is satisfied that the grant of the licence would not be in the interest of the orderly and proper regulation of banking, and the Minister shall not grant his consent to the refusal unless he is satisfied that the grant of the licence would not be in the interest of the orderly and proper regulation of banking.

(3) Whenever the Bank proposes to refuse to grant a licence to a person—

(a) it shall notify the person in writing that it intends to seek the consent of the Minister to the refusal and of its reasons for the refusal and that the person may, within twenty-one days after the date of the giving of the notification, make representations in writing to the Minister in relation to the proposed refusal,

(b) the person may make such representations in writing to the Minister within the time aforesaid, and

(c) the Minister shall, before deciding to give or withhold his consent, consider any representations duly made to him under this subsection in relation to the proposed refusal.

(4) An application for a licence shall be in such form and contain such particulars as the Bank may from time to time determine.

(5) The grant of a licence to a person shall not constitute a warranty as to the solvency of the person to whom it is granted and the Bank shall not be liable in respect of any losses incurred through the insolvency or default of a person to whom a licence is granted.

Conditions of licences.

10. —(1) Subject to subsection (2) of this section, a licence shall be subject to such conditions (which expression in this and the next following subsection does not include a condition of the kind specified in subsection (4) of this section), if any, as the Bank may impose and specify at the time of the grant thereof, being conditions which in the opinion of the Bank are calculated to promote the orderly and proper regulation of banking.

(2) The conditions of a licence may be amended, revoked or added to and conditions may be imposed in relation to a licence from time to time by the Bank if in the opinion of the Bank the amendment, revocation, addition or imposition is calculated to promote the orderly and proper regulation of banking.

(3) Whenever the Bank proposes to impose a condition in relation to a licence or to amend or add to the conditions of a licence—

(a) it shall notify in writing the person who holds the licence or to whom the licence is intended to be granted that it intends to impose a condition in relation to the licence or to amend or add to the conditions of the licence, as the case may be, and of its reasons for so doing and that the person may, within twenty-one days after the date of the giving of the notification, make representations in writing to the Bank in relation to the imposition, amendment or addition, as the case may be, and shall specify in the notification, the condition or the amendment or addition, as the case may be,

(b) the person may make such representations to the Bank within the time aforesaid, and

(c) the Bank shall, before deciding to impose the condition or amend or add to the conditions of the licence, as the case may be, consider any representations duly made to it under this subsection in relation to the imposition, amendment or addition, as the case may be.

(4) (a) The Minister may by order, if the Bank so requests, provide that it shall be a condition of every licence (whether granted before or after the making of the order) that the holder thereof shall be a company.

(b) The Minister may by order, if the Bank so requests, amend or revoke an order under this subsection, including an order under this subparagraph.

(c) Licences shall have effect subject to and in accordance with the terms of any orders for the time being in force under this subsection.

(d) The Bank shall not make a request under this subsection unless it is of opinion that the grant of the request is calculated to promote the orderly and proper regulation of banking.

Revocation of licences.

11. —(1) The Bank may, with the consent of the Minister, revoke a licence—

(a) if the holder of the licence so requests,

(b) if the holder fails or ceases to carry on banking business,

(c) if the holder is adjudicated bankrupt,

(d) if the holder is a partnership and the partnership is dissolved by the death or bankruptcy of any partner, or otherwise under the law of partnership,

(e) if the holder, being a company, is being wound up,

(f) if the holder becomes unable to meet his obligations to his creditors or suspends payments lawfully due by him,

(g) if the holder fails to maintain a deposit in the Bank of an amount determined in accordance with section 13 of this Act,

(h) if the holder is convicted on indictment of an offence under any provision of this Act or an offence involving fraud, dishonesty or breach of trust,

(i) if, since the grant of the licence, the circumstances relevant to the grant have changed and are such that, if an application for a licence were made in the changed circumstances, it would be refused.

(2) Whenever the Bank proposes to revoke a licence (other than in pursuance of a request by the holder to do so)—

(a) it shall notify the holder in writing that it intends to seek the consent of the Minister to the revocation and of the reasons for the revocation and that the holder may, within twenty-one days after the date of the giving of the notification, make representations in writing to the Minister in relation to the proposed revocation,

(b) the holder may make such representations in writing to the Minister within the time aforesaid, and

(c) the Minister shall, before deciding to give or withhold his consent, consider any representations duly made to him under this subsection in relation to the proposed revocation.

(3) Where a licence is revoked, the person who was the holder shall continue to be subject to the duties and obligations imposed on him by or under the Currency and Central Bank Acts, 1927 to 1971, until any liabilities of the person in respect of deposits (including deposits on current accounts) accepted by him have been discharged to the satisfaction of the Bank, and, pending the settlement of all claims in relation to the deposits, the Bank may, subject to sections 29 and 30 of this Act, retain the full amount of the deposit of the person made with it in pursuance of section 7 of this Act.

Publication of names of holders of licences and notices of revocation of licences.

12. —(1) The Bank shall publish from time to time, but not less frequently than once a year, in such manner as it thinks fit the names of the holders of licences.

(2) The Bank shall as soon as may be after the revocation of a licence publish notice of the revocation in such manner as it thinks fit.

(3) The Bank shall keep the Registrar of the Supreme Court, the officer for the time being managing the Central Office of the High Court, each County Registrar and each District Court Clerk informed of the names of the holders of licences.

Deposits at Bank for purposes of licences.

13. —(1) The amount of a deposit maintained by a holder of a licence in the Bank pursuant to section 7 of this Act (in this section referred to as the deposit) shall be five per cent of the total deposits (including deposits on current accounts) at offices in the State of the holder but shall not be less than £20,000 nor more than £500,000.

(2) The amount of the deposit shall be calculated by the Bank as soon as may be after the commencement of this section or at the time of the application for the licence as may be appropriate and shall be re-calculated twice yearly (at intervals which, in so far as is practicable, are of equal length) by reference to returns made by the holder of the licence to the Bank under section 18 of this Act.

(3) The amount of the deposit shall, where necessary, be increased to the appropriate amount re-calculated under subsection (2) of this section by the holder of the licence concerned not later than seven days after the date of the receipt by him of notification from the Bank of the amount required to effect the increase.

(4) The Bank may settle the amount of the deposit at the nearest round figure in hundreds of pounds.

(5) The deposit shall carry interest at such a rate (not being less than the Bank's minimum rediscount rate for the time being for exchequer bills fixed and published by it under section 7 (1) (g) of the Act of 1942) and payable in such manner and at such times as may be determined by the Bank from time to time.

(6) Any charge purported to be created on the deposit shall be void.

(7) Notwithstanding anything contained in this Act, where the nominal value of the issued capital in stock or shares of a business—

(a) to which a licence relates or in relation to which it is proposed to grant a licence, and

(b) in relation to which a banker's licence was in force immediately before the commencement of this section,

does not exceed fifteen thousand pounds, the deposit under section 7 of this Act may, subject to the consent of the Bank and to such conditions as the Bank may impose, be made wholly or partly by depositing with the Bank securities which are equal in value to the amount of the deposit under the said section 7 or (as the case may be) to the amount of the part thereof which is not in money.

(8) The deposit shall not be subject to any form of execution in satisfaction of any claim of, or any judgment, order or decree of any court in the State in favour of, any creditor, otherwise than under and in accordance with the provisions of this Act.

Restriction on use of certain words.

14. —(1) (a) This subsection applies to a building society, an industrial and provident society, a friendly society, a credit union and an investment trust company.

(b) A person to whom this subsection applies shall not use in his or its name or description any of the words “bank”, “banker” or “banking” or any word which is a variant, derivative or translation of or is analogous to any of those words.

(2) There shall not be used in the name or description of a unit trust scheme any of the words “bank”, “banker” or “banking” or any word which is a variant, derivative or translation of or is analogous to any of those words.

Provisions in relation to incorporation of banking companies.

15. —(1) Before the incorporation of a company under the Companies Act, 1963 , which, if incorporated, would, in the opinion of the registrar of companies, within the meaning of that Act, be holding itself out as a banker or have as one of its objects in its memorandum of association the carrying on of banking business, the registrar shall notify the Bank of the delivery to him of the memorandum and articles, within the meaning of that Act, of the company and shall not give a certificate of incorporation under that Act in respect of the company unless and until the Bank indicates to the registrar its willingness to grant a licence to the company or to exempt it under section 8 of this Act.

(2) Upon delivery to the said registrar of companies pursuant to section 352 of the Companies Act, 1963 , of the documents specified in that section in relation to a company, the registrar shall, if the company is such that if it carried on business in the State it would be holding itself out as a banker or have as one of its objects in its memorandum of association the carrying on of banking business, notify the Bank as soon as may be of the delivery.

(3) Whenever the registrar of companies is given notice of an alteration in any instrument constituting or defining the constitution of any company, he shall inform the Bank as soon as may be of the alteration if, in the opinion of the registrar, the company would, by virtue of the alteration, be holding itself out as a banker or have as one of its objects the carrying on of banking business.

Provisions in relation to registration or change of business name.

16. —(1) The registrar for the purposes of the Registration of Business Names Act, 1963 , shall notify the Bank of any proposal to register a name or a change in a name under that Act if, in the opinion of the registrar, there would, by virtue of the proposal, be in relation to the business to which the proposal relates, a holding out as a banker or as carrying on banking business and the said registrar shall not register the name or change of name unless and until the Bank indicates to him its willingness to grant a licence in respect of the business concerned or to exempt it under section 8 of this Act.

(2) The Minister for Industry and Commerce shall consult the Bank in relation to any proposal to change the name of a company (within the meaning of the Companies Act, 1963 ) if, in the opinion of that Minister, the company would, by virtue of the change, be holding itself out as a banker or appear to be carrying on banking business.

Provisions in relation to books and records of holders of licences.

17. —(1) A holder of a licence shall keep at an office within the State such books and records as may be specified from time to time by the Bank in the due discharge of its functions under the Currency and Central Bank Acts, 1927 to 1971, and shall notify the Bank of the address of the office at which they are kept.

(2) Different books and records may be specified by the Bank for the purposes of this section in relation to different holders of licences.

(3) (a) An officer of the Bank duly authorised in writing in that behalf by the Governor of the Bank or a person who holds a recognised qualification in accountancy duly authorised in writing in that behalf by the Governor of the Bank may, for the purpose of the performance by the Bank of its statutory functions, upon production of his authorisation, at all reasonable times, inspect and take copies of or extracts from the books and records kept pursuant to this section and any books of account kept under section 147 of the Companies Act, 1963 , and for those purposes enter the office at which they are kept.

(b) A person who has in his power, possession or procurement any of the books or records aforesaid shall produce them at the request of a person duly authorised as aforesaid and permit the person to inspect and take copies of or extracts from the books or records and give to him any information which he may reasonably require with regard to any entries therein.

(4) Books and records kept pursuant to this section shall be in addition to any books or other records required to be kept by or under any other enactment.

Furnishing of information to Bank.

18. —(1) A holder of a licence and any person who carries on the business of a building society, an industrial and provident society, a credit union, an investment trust company or a unit trust scheme shall furnish to the Bank—

(i) at such times as the Bank may specify from time to time, such information and returns concerning the business to which the licence relates or the business aforesaid, as the case may be, as the Bank may specify from time to time, being information and returns which the Bank considers it necessary to have for the due performance of its statutory functions;

(ii) within such period as the Bank may specify, any information and returns (not being information or returns specified under paragraph (i) of this subsection) concerning the business to which the licence relates or the business aforesaid, as the case may be, that the Bank may request in writing, being information and returns which the Bank considers it necessary to have for the due performance of its statutory functions.

(2) A person shall not furnish information or returns under this section which he knows to be false.

(3) The manager under a unit trust scheme shall for the purpose of this section be deemed to be a person carrying on the business of the scheme.

Publication of business statements by holders of licences.

19. —(1) A holder of a licence shall publish statements in respect of the business to which the licence relates in such form and manner and at such times as may be specified by the Bank from time to time for the purpose of the performance of its statutory functions.

(2) Different forms may be specified by the Bank for the purposes of this section in relation to different holders of licences.

Displaying of financial statements by holders of licences.

20. —(1) A holder of a licence—

(a) shall display and at all times keep displayed in a conspicuous place in every office, branch or other place in which he carries on banking business and also, if the holder is a limited company incorporated in the State, in the registered office of the company, a statement (in the form required by this section) in relation to the banking business carried on by him, and

(b) shall furnish on demand to each of his creditors and, if the holder is a limited company incorporated in or outside the State, to each member of the company, a copy of the latest such statement.

(2) The statement required by this section to be displayed by a holder of a licence shall, in the case of an Associated Bank, be in the form of a copy of its latest balance sheet and, in every other case, be in such form as may be prescribed by the Bank.

Directions by Bank to holders of licences.

21. —(1) Where the Bank is of opinion that the holder of a licence has become, or is likely to become, unable to meet his obligations to his creditors, the Bank may give a direction in writing to the holder to suspend, for such period, not exceeding two months, as shall be specified in the direction, either or both of the following, that is to say, the taking of deposits or the making of payments which have not been authorised by the Bank.

(2) The Bank may revoke a direction given under this section unless an order under subsection (4) of this section has been made in respect of the direction.

(3) The holder of a licence to whom a direction is given under subsection (1) of this section may apply to the Court for, and the Court may grant, an order setting aside the direction.

(4) The Bank may apply to the Court for, and the Court may grant, an order confirming a direction under subsection (1) of this section or confirming the direction and extending the period of its operation for such time as the Court may, having regard to all the circumstances, consider appropriate.

(5) The Court may, in addition to or in lieu of making an order under subsection (4) of this section, make such other order in relation to the matter as may appear to it to be necessary.

(6) The whole or any part of proceedings under this section or of an appeal in relation thereto may be heard in chambers.

(7) Where an order is made under subsection (4) of this section confirming and extending a direction under subsection (1) of this section—

(a) if the person to whom the direction is given is a company, the company shall be deemed, for the purpose of the law relating to companies, to be unable to pay its debts,

(b) if the person to whom the direction is given is an individual or a partnership, the individual or each partner, as the case may be, shall be deemed, for the purpose of the law relating to bankruptcy, to have committed an act of bankruptcy, and

(c) the provisions of subsections (8) to (10) of section 29 of this Act shall apply and have effect as if the references therein to orders under subsection (3) of that section included references to orders under subsection (4) of this section, the references therein to proceedings under that section included references to proceedings under this section and “or in lieu of” in subsection (8) (a) of that section were deleted.

(8) The Court may by order revoke or amend an order made by it under subsection (3), (4) or (5) of this section.

Directions by Bank in relation to advertisements of holders of licences.

22. —(1) The Bank may give a direction in writing to a holder of a licence in relation to the information which the holder shall include in any advertisement to be published by him or on his behalf or in any statement to the public to be made by him or on his behalf

(2) The Bank may give a direction to a holder of a licence to refrain from publishing or continuing to publish during such period as shall be specified in the direction an advertisement inviting deposits from the public.

(3) The Bank shall not give a direction under this section unless it is satisfied that it is desirable to do so in the interest of the orderly and proper regulation of banking.

Regulation of ratios between assets and liabilities of holders of licences.

23. —(1) The Bank may from time to time require a holder of a licence to maintain—

(a) a specified ratio,

(b) a ratio which does not exceed a specified ratio, or

(c) a ratio which is not less than a specified ratio,

between his assets and his liabilities and the specified ratio may be expressed as a percentage of the assets or liabilities concerned.

(2) A requisition under this section may be expressed to apply—

(a) in relation to all holders of licences or to holders of a specified category or specified categories,

(b) in relation to the total assets or total liabilities of the holders of licences concerned or to specified assets or assets of a specified kind or specified liabilities or liabilities of a specified kind of those holders,

(c) in relation to a specified time or times or during a specified period or periods,

and shall have effect in accordance with its terms.

(3) A requisition under this section which is in force may be revoked by the Bank or may be amended by a subsequent requisition under this section.

(4) In this section “specified” means specified by the Bank in a requisition under this section.

Power of Bank to require deposits by holders of licences in certain circumstances.

24. —(1) If at any time it should appear to the Bank that it is expedient so to do, the Bank may, with the consent of the Minister, make regulations requiring every holder of a licence to make with the Bank, in addition to the deposit under section 7 of this Act, a deposit (not bearing interest) of an amount specified in the regulations or calculated in a manner specified in the regulations if and whenever after a date specified in the regulations the assets of the holder within the State fall below such proportion in relation to his liabilities within the State as is specified in the regulations, and to maintain such deposit so long as such assets are below the said specified proportion.

(2) Regulations made under this section may prescribe different requirements in respect of different holders of licences.

Power of Bank in respect of clearances of holders of licences.

25. —(1) If at any time it should appear to the Bank that it is expedient so to do, the Bank may, with the consent of the Minister, make regulations requiring every holder of a licence to settle all or such particular class or particular classes of his clearances as may be specified in the regulations by cheques drawn either (as shall be specified in the regulations) on the Bank or on an agent appointed for the purpose by the Bank and requiring every such holder, for the purpose of so settling such clearances, to create and maintain with the Bank such balances as may be necessary for the purpose.

(2) If at any time it should appear to the Bank that it is expedient so to do, the Bank may, with the consent of the Minister, make regulations requiring every holder of a licence to lodge with the Bank for clearance all such instruments payable outside the State and lodged for clearance at an office in the State of the holder as may be specified in the regulations.

(3) Regulations under section 51 of the Act of 1942 in force immediately before the commencement of this Act shall continue in force and shall have effect as if made under this section and may be amended or revoked by regulations under this section.

Collection of cheques, etc., drawn on holders of licences.

26. —(1) Where an instrument to which this section applies is tendered by or on behalf of any person for collection to the holder of a licence with whom the person maintains an account (not being the holder on whom the instrument is drawn), the holder shall accept the instrument for collection and shall credit any proceeds of collection to the account aforesaid.

(2) Any charge imposed by the holder of a licence on another holder or a trustee savings bank certified under the Trustee Savings Banks Acts, 1863 to 1965, in relation to the collection of an instrument to which this section applies and the crediting of any proceeds of collection pursuant to subsection (1) of this section shall be subject to the approval of the Bank.

(3) Any terms or conditions upon or subject to which a holder of a licence acts as banker for another holder of a licence or a trustee savings bank certified under the Trustee Savings Banks Acts, 1863 to 1965, shall be subject to the approval of the Bank.

(4) In considering whether to grant or withhold an approval under subsection (2) or (3) of this section, the Bank shall have regard to the desirability of ensuring fair competition between holders of licences.

(5) Nothing in this section shall be construed as conferring any title to an instrument to which this section applies on a person by or on whose behalf the instrument is tendered pursuant to subsection (1) of this section.

(6) This section applies to the following instruments, namely—

(a) bills of exchange (which expression has the same meaning in this subsection as in the Bills of Exchange Act, 1882) drawn on a holder of a licence payable on demand;

(b) any document issued by a person who maintains an account with a holder of a licence or the Bank which, though not a bill of exchange, is intended to enable a person to obtain payment from that holder or the Bank of the sum mentioned in the document;

(c) any draft payable on demand drawn by a holder of a licence upon himself, whether payable at the head office or some other office of his bank;

(d) any document issued by a public officer which is intended to enable a person to obtain payment from a Minister of State of the sum mentioned in the document;

(e) any document issued by a person who maintains an account with a trustee savings bank certified under the Trustee Savings Banks Acts, 1863 to 1965, which is intended to enable a person to obtain payment from the bank of the sum mentioned in the document.

Restriction on advertising for deposits.

27. —(1) Subject to subsection (2) of this section, a person shall not advertise for or otherwise solicit deposits on his own behalf or on behalf of any other person.

(2) Subsection (1) of this section does not apply to advertising for or otherwise soliciting deposits—

(a) by the holder of a licence or the Bank or a person to whom, by virtue of section 7 (4) of this Act, section 7 (1) of this Act does not apply, or

(b) by any person on behalf of a person specified in paragraph (a) of this subsection.

(3) In this section—

deposits” does not include deposits with a trader by persons employed by him in his trading business or by his customers in the normal course of his trading business or deposits in respect of the letting or selling of goods under a hire-purchase agreement or a credit-sale agreement;

solicit deposits” includes publish or display any matter soliciting deposits whether by notice, circular, photograph, cinematograph film, sound broadcasting, television, personal canvassing or otherwise.

Provisions in relation to judgments against holders of licences.

28. —(1) Whenever a person (in this section referred to as a judgment creditor) obtains in any court in the State a judgment, order or decree against the holder of a licence (in this section referred to as a judgment debtor) for the payment of a sum of money due to the judgment creditor by the judgment debtor in his capacity as a banker—

(a) the registrar or clerk of the court concerned shall notify the Bank as soon as may be of the judgment, order or decree and of its terms and of any appeal against the judgment, order or decree and of the result thereof,

(b) subject to paragraph (c) of this subsection, if within the period of twenty-one days beginning on the date of the judgment, order or decree, the judgment debtor does not pay all moneys due (or, in the case of costs, at the option of the judgment debtor, give security therefor in lieu of payment), or satisfy all claims, under the judgment, order or decree, the provisions of paragraph (e) of this subsection shall apply upon the expiration of such period,

(c) if an appeal is instituted in any court against the judgment, order or decree, that court or the court by which the judgment, order or decree was made may by order postpone the application of paragraph (e) of this subsection for such period and, subject to paragraph (d) of this subsection, on such terms as the court concerned may fix and specify in the order,

(d) if a court makes an order under paragraph (c) of this subsection, it may require the judgment debtor to whom the order relates either, as the court thinks fit, to lodge in court an amount equal to the amount of all moneys due under the judgment, order or decree (or such lesser amount as the court may direct) or give such security as the court may determine for the payment to the judgment creditor of all such moneys, together with, in either case, such further sum or security for the costs of the appeal as the court shall consider just,

(e) the judgment debtor shall be deemed to be unable to meet his obligations to creditors, and—

(i) if the judgment debtor is a company, the judgment debtor shall be deemed, for the purpose of the law relating to companies, to be unable to pay its debts,

(ii) if the judgment debtor is an individual, he shall be deemed, for the purpose of the law relating to bankruptcy, to have committed an act of bankruptcy,

(iii) if the judgment debtor is a partnership, each of the partners shall be deemed, for the purpose of the law relating to bankruptcy, to have committed an act of bankruptcy,

(f) an order under paragraph (c) of this subsection may be revoked or varied by the court that made it or before which an appeal in relation to it is brought.

(2) An act of bankruptcy which is deemed by virtue of subsection (1) of this section to have been committed by a judgment debtor may be availed of within the period of six months from the date of such act by any creditor with a sufficient debt for the purpose of having the judgment debtor adjudicated bankrupt.

Proceedings in relation to deposits under section 7.

29. —(1) Whenever a person obtains a judgment, order or decree in any court in the State against the holder of a licence for payment of a deposit (including a deposit on current account) maintained by or for him with the holder, or institutes proceedings against the holder claiming such payment, the person or any other person maintaining a deposit with the holder—

(a) may by motion ex parte apply to the Court for an order under subsection (2) of this section, and

(b) on satisfying the registrar or clerk of the court in which the judgment, order or decree was obtained or the proceedings were instituted that he proposes to make an application under this section, shall be entitled to obtain a certificate signed by the registrar or clerk and stating that the judgment, order or decree has been obtained or that the proceedings were instituted, as the case may be, and the certificate shall be evidence of the facts so stated therein.

(2) Where an application is made under subsection (1) of this section—

(a) the Court may by order direct that the deposit or any part thereof maintained in the Bank by the holder of a licence to whom the application relates under section 7 of this Act be not released during such period as the Court may deem proper and specify in the order, and

(b) if the person making the application has obtained a judgment, order or decree against the holder and it appears to the Court, after such enquiry as it deems appropriate, either—

(i) that it is unlikely that further claims will be made against the deposit in respect of sums then owed by the holder, or

(ii) that, if such claims are made, the deposit is sufficient to meet them in full,

the Court may by order direct that the sum specified in the judgment, order or decree (as the case may be), with or without the costs of the application, shall be paid to the person out of the deposit.

(3) Where an order is made under subsection (2) (a) of this section, the Court may also make an order directing either—

(a) that persons carrying on banking business shall not, except subject to such conditions or in such circumstances as may be specified in the order, make any payment out of any banking account kept in the name of the person against whom the order is made, or

(b) that a specified person or persons carrying on banking business shall not, except subject to such conditions or in such circumstances as may be specified in the order, make any payment out of any banking account or out of a specified banking account or type of banking account kept in the name of the person against whom the order is made by the person or persons specified.

(4) Where—

(a) a judgment, order or decree of the kind referred to in subsection (1) of this section having been obtained against the holder of a licence, an order is made under subsection (2) (a) of this section on the application of the person who obtained the judgment, order or decree, or

(b) an order is made under subsection (3) of this section,

the following provisions shall have effect—

(i) in case the holder is a company, the holder shall be deemed, for the purpose of the law relating to companies, to be unable to pay its debts,

(ii) in case the holder is a partnership, each of the partners shall be deemed, for the purpose of the law relating to bankruptcy, to have committed an act of bankruptcy,

(iii) in any other case, the holder shall be deemed, for the purpose of the law relating to bankruptcy, to have committed an act of bankruptcy.

(5) If an appeal is instituted in the Supreme Court—

(a) against an order of the Court made under subsection (2) (a) or subsection (3) of this section on the application of a person who has obtained a judgment, order or decree of the kind referred to in subsection (1) of this section, or

(b) against an order of the Court made under subsection (3) of this section on the application of a person who has instituted proceedings of the kind referred to in subsection (1) of this section,

subsection (6) and, where appropriate, subsection (7) of this section shall apply.

(6) The Supreme Court or the Court may by order postpone the application of subsection (4) of this section for such period and, subject to subsection (7) of this section in the case of an appeal referred to in subsection (5) (a) of this section, on such terms as the court concerned may fix and specify in the order.

(7) If the Supreme Court or the Court makes an order under subsection (6) of this section in the case of an appeal referred to in subsection (5) (a) of this section, the court concerned may require the holder of a licence to whom the order relates either, as the court thinks fit, to lodge in court an amount equal to the amount of all the moneys due under the judgment, order or decree (or such lesser amount as the court may direct) or to give such security as the court may direct for the payment of all such moneys, together with, in either case, such further sum or security for costs of the appeal as the court shall consider just.

(8) (a) In addition to or in lieu of making an order under subsection (3) of this section, the Court may, notwithstanding anything contained in the law relating to bankruptcy or the law relating to companies, of its own motion and after giving to the holder of a licence against whom the order is made or sought, and to any other person to whom it considers notice should be given, such notice as it considers reasonable—

(i) in case the holder is a company, make an order for its winding up and for the appointment of the Official Assignee as liquidator of the company.

(ii) in case the holder is a partnership, by order adjudicate each of the partners bankrupt,

(iii) in any other case, adjudicate the holder bankrupt.

(b) Where the Official Assignee is appointed liquidator under paragraph (a) of this subsection—

(i) the provisions of paragraphs (a) and (d) of section 228 of the Companies Act, 1963 , shall not apply to him,

(ii) the exercise of his powers and the performance of his duties as liquidator (including the making of payments from and the distribution of any deposit maintained under section 7 of this Act which becomes vested in him) shall for all purposes be deemed to be business assigned to the Office of the Official Assignee in Bankruptcy and transacted therein.

(9) Where, in proceedings under this section, the holder of a licence is adjudicated bankrupt, the law relating to bankruptcy (including this Act) shall apply in the same way as if the holder had been adjudicated bankrupt on a petition of bankruptcy under that law and as if for any reference in that law to the presentation or filing of a petition of bankruptcy there were substituted a reference to the making of the order of adjudication under this section.

(10) Where, in proceedings under this section in which the holder of a licence against whom they are brought is a company, a winding up order is made, the law relating to companies (including this Act) shall apply in the same way as if the order had been made on a winding up petition under that law and as if for any reference in that law to the presentation of the winding up petition there were substituted a reference to the making of the winding up order under this section.

(11) An order under subsection (2) (a), (3) or (6) of this section may be revoked or varied by the Court or the Supreme Court, as the case may be.

(12) The whole or any part of proceedings under this section or of an appeal in relation thereto may be heard in chambers.

(13) In this and in the next following section “the Official Assignee” means the person who is for the time being the Official Assignee in Bankruptcy.

Provisions in relation to bankruptcy and winding up.

30. —Where—

(a) an individual is the holder of a licence and is adjudicated bankrupt,

(b) a partnership is the holder of a licence and each of the partners thereof is adjudicated bankrupt,

(c) a partnership is the holder of a licence and the partnership is dissolved by the bankruptcy of any partner and the licence is revoked, or

(d) a company is the holder of a licence, is insolvent and is being wound up,

the following provisions shall have effect:

(i) in the case of the individual or partnership, the amount deposited by him or it with the Bank under section 7 of this Act together with any interest accrued thereon shall vest in the Official Assignee,

(ii) in the case of the company—

(I) in case the Official Assignee is the liquidator of the company, the amount deposited by it under the said section 7 together with any interest accrued thereon shall vest in the Official Assignee, and

(II) in any other case, the Court may, on the application of the liquidator of the company, order that the amount deposited by it with the Bank under the said section 7 together with any interest accrued thereon shall vest in the liquidator by his official name and thereupon the said amount and interest shall vest accordingly,

(ii) the Official Assignee or the liquidator shall pay from the amount vested in him as aforesaid to the persons maintaining deposits with the holder (including deposits on current accounts) the amount of each deposit (including interest credited to such persons) remaining due by the holder to such persons, account having been taken of any sums due by such persons to the holder in respect of the business to which the licence relates, or, if the amount vested in him as aforesaid is insufficient for such purpose, the Official Assignee or the liquidator shall distribute it to such persons in proportion to the amount of each such deposit remaining due as aforesaid, and, before making such payments or distribution, the Official Assignee or the liquidator shall pay or retain out of the amount vested in him as aforesaid—

(I) any costs, fees and expenses incurred by or payable to the Official Assignee or the liquidator (in case the Official Assignee is the liquidator) in relation to the amount aforesaid and to the payments or distribution to such persons, and

(II) such costs and expenses, if any, of the liquidator (in case the Official Assignee is not the liquidator) in relation to the amount aforesaid and to the payments or distribution to such persons as the Court may allow,

(iv) any balance of the amount aforesaid vested in the Official Assignee or the liquidator shall be used—

(I) first, towards satisfying any claim in relation to interest payable by the holder by agreement on amounts deposited with the holder, and

(II) secondly, towards paying interest at such rate as the Court may consider reasonable (but not exceeding the average rate of interest payable by agreement by the holder on amounts deposited with the holder) on amounts deposited with such holder in respect of which there is no agreement providing for the payment of interest by the holder,

and any amount remaining after such use of the said balance shall be paid to the general estate of the holder,

(v) if the total amount vested in the Official Assignee or the liquidator as aforesaid is not sufficient to discharge the claims of the persons among whom he is required by paragraph (iii) of this section to distribute it, those persons may claim as ordinary creditors of the holder in respect of the unsatisfied portion of their claims.

Duties of holder of licence on termination of banking business.

31. —(1) Where a holder of a licence ceases in circumstances other than those specified in paragraphs (a) to (d) of section 30 of this Act to carry on banking business, he shall, as soon as may be, notify all persons having deposits (including deposits on current accounts) with him of such cesser and he shall, if any such person so demands, pay to that person forthwith the amount of his deposit together with the amount of any interest accrued thereon.

(2) Where a holder of a licence proposes to cease carrying on banking business, he shall notify the Bank in writing of the proposal not less than three months before the date of the cesser.

(3) This section does not apply in relation to a cesser occasioned by the transfer of the business to which a licence relates to another holder of a licence.