BANK ACCOUNTS

New Zealand Herald, Volume LXXIV, Issue 22687, 27 March 1937, Page 14

BANK ACCOUNTS

JIORTG AG E APPLICANTS STOPPAGE NOT DESIRED STATEMENT BY MINISTER [BY TELEORArH—PRESS ASSOCIATION] WELLINGTON, Friday " It is the desire of the Government (hat customers of banks should not he embarrassed by the stoppage of their accounts merely because they have made application for adjustment of their liabilities under the Mortgagors and Lessees Rehabilitation Act of last rear," said the Attorney-General, the Hon. H. G. K. Mason, in a statement. The Minister said concern had been expressed by banking institutions as to the effect of section 5S of the Act. " The Government desires banking institutions to carry on such customers' accounts in respect of transactions in tbo ordinary course of business as if no application had been tiled," continued Mr. Mason. " If any legislation is necessary to protect banking institutions from loss through the operation of section 58 of the Act —if merely in good faith and having no reasonable grounds for supposing there is a contravention of the section, they carry on their customers in the usual way then the Government will introduce the necessary legislation. "It would, however, be wise for banks to notify overdrawn customers who have made application under the Act that they must not draw cheques except for reasonable living expenses and ordinary business purposes, and to tako all reasonable steps to see that such advice is not ignored. But, in the absence of reasonable grounds for supposing that a cheque is*to bo used in contravention of the section, the Government does not expect banks to make inquiry as to the purpose for which the cheques are drawn. " It is understood." concluded the Minister, " that this statement is not to be construed in any way as a promise of indemnity or a guarantee "by the eminent to the banks, and that the Government to the banks, and that the spousibility in the matter."