INDIAN BANK FAILURE.

New Zealand Herald, Volume LX, Issue 18457, 21 July 1923, Page 9

INDIAN BANK FAILURE.

ACTION BY THE GOVERNMENT.

CENSURE BY THE ASSEMBLY.

Australian and N.Z. Cable Association. (Reed. &20 P. 0.) DELHI. July 19. After a heated debate the Legislative Assembly, by a majority of nine, passed a vote of censin-e on the Government of India for its intervention in connection with the Alliance Bank's affairs. The motion . was moved by a prominent Indian member, and strongly supported by Indians. Their contention was that the Government had no right to give relief to the Alliance Bank sufferers unless it was prepared to give relief to other bankrupt concerns, which it refused to pledge itself to do. The Minister for Finance, replying., declared that the Government took action to prevent a financial panic. He denied any racial feeling on the part of the Government,' because many - depositors in the bank were Europeans.

A cablegram from Lahore, dated July 5, stated that the Bombay High Court dismissed the appeal from the decision of the Supreme Court dissolving the injunction to restrain the Imperial Bank of India from paying 50 per cent, to the depositors of the Alliance Bank of Simla, in liquidation. " ' „ . The Chief.Justice, in summing up, said that, in effect, the Imperial . Bank's action could be regarded as in the, nature, of a loan to the Government, which deemed this part payment necessary in order to restore confidence, and assure financial stability. The fact that no interest was being charged was quite in order, as the Government, on its part, had placed large i reserves of money with the Imperial Bank j without interest.

The message added: General relief is felt among the creditors that the injunction has been dissolved. , There is also a certain amount of resentment since the controversy shows that Indians are trying to make the loan a racial matter.