RESERVE BANK

Southland Times, Issue 22097, 18 August 1933, Page 7

RESERVE BANK

INDIAN PROPOSAL RECOMMENDATIONS OF COMMITTEE FINANCIAL SAFEGUARD (British Official Wireless.) (Rec. 5.5 p.m.) Rugby, August 16. The report of the committee on the Indian Reserve Bank legislation, issued in a White Paper, recommends provisions for creating an Indian Reserve Bank. The Bill will be presented to the Indian Legislature in September and probably be referred to a select committee which will report to a special session in November. It is hoped that the Bill will be passed before the end of the year. It is considered that the establishment of the bank is an important financial safeguard to ensure confidence in the future management of Indian credit and currency in view of the changed conditions contemplated under the proposed Federal Constitution. The committee, under the presidency of Sir Reginald Mant, has taken the principles of the 1928 Bill as the basis, and recommends the organization of the bank on lines similar to other central banks in the Empire. On the principle that the bank should be free from political influence, the capital will be held by private shareholders. The shares will be of 500 rupees each and no shareholder may exercise more than ten votes. India, including Burma, will be divided into five areas with headquarters at Bombay, Calcutta, Delhi, Madras and Rangoon, and the bank’s capital in five unequal portions will be offered for subscription in these areas. Local boards and a central board of eight regional directors in addition to the governor and deputy-governors are provided for. The establishment of a London branch is considered optional. The governor will be appointed by the Governor-General-in-Council. The committee recommends that India remain on the sterling standard at present, at least until the international monetary position is clearer. The note issuing department, which will be separate from the banking department, is to have gold and sterling for over 50 per cent, of its note liabilities.