BANKING RESTRICTION

Otago Daily Times, Issue 26424, 31 March 1947, Page 6

BANKING RESTRICTION

AUSTRALIAN PUBLIC BODIES REMOVAL OF BUSINESS FROM TRADING BANKS CANBERRA, Mar. 28. An edict shortly to be issued will prohibit private trading banks from doing business with the State Governments, State instrumentalities, and local government bodies. The Commonwealth Government proposes to implement sections of the banking legislation which will make it obligatory for these bodies to transact their banking business with the Commonwealth Bank or State banks.

At present most of the New South Wales Government banking is done with the Bank of New South Wales. This represents an enormous volume of business, which now will to the Gov ernment banks. The Prime Minister, Mr J. B. Chifiey, in announcing this, said he wanted to make it quite clear that the Government was not attempting to restrict State Governments to trading with the Commonwealth Bank. It was most likely, however, that in many instances the Commonwealth Bank would be the only one with facilities available to take over the business from the trading banks. This proclamation would not take effect for some time in New South Wales, he said, because the Commonwealth Bank as yet did not have the necessary facilities to take over the added business. Mr Chifiey emphasised that there was no intention at' the moment of taking over any of the trading banks.