LEGISLATION ON BANKS.

Hawke's Bay Herald, Volume XXI, Issue 5555, 9 December 1879, Page 3

LEGISLATION ON BANKS.

1 The bill now before the House of Commons provides that every joint-stock- bank shall appoint : three, four, or five^ persona : to form a.committee' of audit and inspec-. tion. . For this committee on officer of .the ;bank would be eligible ; and at least one member ..would , retire, annually without being eligible for re-election until after the lapse of a year, ! while no member could hold office for more than three years consecutively. The duties of this committee are set forth as being, to carefully examine and check the bank's'balancesheet aud statement. For this purpose they: would. '.bo., authorised to call for*, production of all documents relating in any manner to the affairs of the bank,, aud, to employ accountants at the bank's expense to assist them in their investigations. They are, also empowered to examine the bank's officers upon oath. The committee are then directed either .to signify their approval according to a prescribed form, j or to express their disapproval in such way as may be deemed expedient. The committee's report would be sent to the Board of Trade and to the shareholders. Moreover, the committee are directed to institute further inquiries whenever it appears expedient into the financial condition of the bank, and to publish the result of their investigation iri any manner they may deem advisable. The penalties for the bank's omitting to elect or maintain its adult committee are fixed thus: — 1. The bank would be incapable of instituting any legal proceedings. 2. No dividend could i be -declared. 3. For 6very daj during yririchthe bank carried . on business while, in default each director would be liable to a penalty not exceeding -£5^ to be recovered by any person whatever. The first schedule sets forth tfre forms according to which each bank is roquired to publish half-yearly its balance-sheet and statement. These forms ■•. comprise in detail the liabilities and ' tho assets, the profit and loss, and the proposed appropriation of the net profit. Then follow the " queries" which the bank is required to answer halfyearly. These include subscribed capital, amount. pers share/ paid per share, number of shareholders, liaiblity of shareholders, liability of:.past shareholders, names of Rectors', qualification of directors, 'amount of shares or stock held by directors, indebtedness of directors or firms in

which they are partnors, amount- ~of~ company's own '• shares held i • :ani6tirit" advanced on company's : own shares, Hujmber of debtors ~to - the^ bank of more than £10b,'000 : each'j ■ total' r AiHount i.ivolved.with suc«* i .a.'xies of members of the audit committee, detailed list* of-'ih-vostments compiised in statement of j assets, and prices., aii; which they. stand in books. The second schedule shows the .fiuies acccriing to which it lid. iproposed that the members, of, tho audit committee shall"be elected by ,the. shai ; eholiers, and : also the mode in which they may be removed at extraordinary meetings convened foil", the purpose. The remuneration of the committee would be fixed for each" year by the. meeting- at which an election is held, or, in default, by the Board of Trade. The Boai'd is further empowered to revoke, alter, or add to the".fules with respect to any of the matters prescribed by the bill, and also to vary the rules with regai'd to any particular bank.