CENTRAL BANK FOR INDIA

Timaru Herald, Volume CXXXVII, Issue 19571, 18 August 1933, Page 9

CENTRAL BANK FOR INDIA

NEW FINANCIAL POLICY OUTLINED PROVIDING FOR CHANGED CONDITIONS British Official Wireless (Received August 17, 5.5 p.m.) RUGBY, August 16. The report of the Committee on the Indian Reserve Bank legislation, has been issued in a White Paper. The Committee recommends provisions for creating an Indian reserve bank. The Bill will be presented to the Indian Legislature in September, and will probably be referred to a ‘Select Committee, which will report to a special session in November. It is hoped 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. Basic Principles of Scheme. The Committee, under the presidency of Sir Reginald Mant, has taken the principles of the 1928 Bill, as the basis, and recommends the organisation of the bank to be on lines similar to the other central banks of the Empire. On the principle that the bank should be free from political influence, the capital will be held by private shareholders. Shares will be 500 rupees each, and no shareholder may exercise more than ten votes. India, including Burma, is to be divided into five areas, with headquarters at Bombay, Calcutta, Delhi, Madras, and Rangoon. The bank’s capital in five equal portions, will be offered for subscription in these areas. System of Control. 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 Go-vernor-General-in-Council. Basic of Currency. The Committee recommends that India remain on the sterling standard at present, at least until the international monetary position is clearer. A 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.