RESERVE BANK.

Auckland Star, Volume LXIV, Issue 194, 18 August 1933, Page 7

RESERVE BANK.

INDIAN PROPOSAL.

Prelude to Planned Federal

Constitution

FROM POLITICAL CONTROL.

(British Official Wireless.) BUGBY, August 17. The report of the committee on the Indian reserve bank legislation, issued as a White Paper, recommends that provision be made for creating' an Indian reserve bank. The bill will be presented in the Indian Legislature in September and probably will be referred to a select committee, which will report to a special session in November. It is hoped that the bill will be passed before the em] of the year.

It is considered that the establishment of the bank is an important financial safeguard to ensure confidence in the future management of Indian credit and currency in view of the changed conditions contemplated under the proposed Federal constitution.

The committee, which has been under the presidency of Sir Beginald Maiit, has taken the principles of the 1028 bill as a basis and recommends the organisation of a bank on lines similar to thoso of other central banks in the Empire. On the principle that the bank should be free from political influence, the capital is to be held by private shareholders. The shares will be of 500 rupees each, and no shareholder may exercise more than 10 votes. India, including Burma, will be divided into live areas, with headquarters at Bombay, Calcutta, Delhi, Madras and Bangoon, and the capital of the bank, in five unequal portions, will be offered for subscription in these areas.

Local boards and a central board of eight regional directors, in addition to a governor and deputy-governors, are provided for. The establishment of a London branch is considered optional.

The governor will be appointed by the Governor-General-in-Council.

The Committee recommends that India should remain fin a sterling standard at present, at least until the international monetary position becomes clearer.

The note issuing department, which will be separate from the banking department, is to have gold and sterling for over 50 per cent of its note liabilities.