INDIAN RESERVE BANK

Press, Volume LXIX, Issue 20937, 18 August 1933, Page 9

INDIAN RESERVE BANK

- EARLY ESTABLISHMENT URGED RECOMMENDATIONS OF COMMITTEE (BRITISH OFFICIAL TTISEf-'SSS.; (Received August 17, 7.5 p.m.) RUGBY, August 16. The report of the committee on the Indian Reserve Bank legislation, issued in a White Paper, recommends that a ' bill creating the bank be presented to the Indian legislature in September. It will probably thus 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 end 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, under the presidency of Sir Reginald Mant (a member of the Council of India), has taken the principles of the 1928 bill as a basis, and recommends the organisation of the bank on lines similar to other central banks in the Empire. On the principle that the bank should be free from political influence, the capital will be held by private shareholders. Shares will be of 500 rupees each, and no shareholder may exercise more than 10 votes.

India, including Burma, will be divided into five areas, with head-, quarters in Bombay, Calcutta, Delhi, Madras, and Rangoon, and the bank's capital, 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. 1

The committee recommends that India should remain on the sterling standard at present, at least until the international monetary position is clearer.

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