BUILDING SOCIETIES

Poverty Bay Herald, Volume LIX, Issue 17957, 8 December 1932, Page 5

BUILDING SOCIETIES

SAVINGS BANK BUSINESS RESTRICTIONS PROPOSED (Parliamentary Reporter.) WELLINGTON, this day. Tho rights of building societies to accept moneys on deposit are restricted by the Finance Bill, introduced in the House by Governor-General’s Message last night. Societies who are at present carrying on savings bank business are not to Vie debarred from operating as in the past, but certain conditions will have to be complied with. It will not be lawful, however, for societies, which, at the passing of the legislation. do not hold such deposits, to accept them in future.

The limit to.the amount of savings bank business that can be done by societies at present operating is fixed in the bill at £20.0,000, or the amount of paid-tip capital, whichever is the lower. It is also provided that no individual deposit shall be accepted which has the effect of increasing beyond £2OO the aggregate savings bank deposits, including accrued interest, held by that depositor. In addition, societies engaged in business wili be required tu keep 10 per cent, of their deposits- in liquid assets, either us cash or in New Zealand Government securities, Or in both. Power is given the kl.ini.ster ot Finance to grant exemption from this requirement for a period up to three years.

The bill also makes it an offence for a building society to hold itself. oul ns an institution carrying on sayings bank business, and the maximum penalty for breaches is fixed at £I.OO.

Except in response 1o written requests, no circulars or other documents. are to be issued setting out particulars of the terms and conditions on which savings bank deposits may be made with any building society, or inviting their investment. Newspaper advertisements and other methods of published advertising on the same subject are similarly pmhibited.

Another clause provides statutory authority for the investment, by building societies of their surplus 1 nails in the Post Office .Savings Bank, trustee savings banks, and trading banka.