Banking Bill

“bank” means any company which carries on banking business;

“banking business” means the business of receiving money on current or deposit account, paying and collecting cheques drawn by or paid in by customers, and making advances to customers;

“company” means any company incorporated formed and registered under the Companies Ordinance and any company formed in pursuance of any other written law in Singapore or by Royal Charter or Letters Patent of the United Kingdom; and includes any company incorporated outside Singapore which has compiled with the provisions of Part X of the Companies Ordinance;

“Inspector” means the Inspector of Banks appointed under section 17 of this Ordinance;

“license” means a license granted under section 3 or section 34 of this Ordinance;

“licensed bank” means a bank holding a valid license and all the offices and branches in Singapore of such a bank shall be deemed to be one bank.

Neither the Government nor the Inspector nor any other officer of the Government shall be subject to any action, claim or demand by or liability to any person in respect of anything done or omitted to be done in good faith in pursuance or in execution or intended execution or in connection with the execution or intended execution of any power conferred upon the Government, the Inspector or such officer by this Ordinance.

For the purposes of this section the Minister and any public officer shall be deemed to be an officer of the Government.

Without prejudice to anything contained in any written law relating to companies, any person who is a director, manager, secretary or other officer concerned in the management of a licensed bank shall cease to hold office —

No person who has been a director of, or directly concerned in the management of, a licensed bank which has been wound up by a court shall, without the express authority of the Minister, act or continue to act as a director of, or be directly concerned in, the management of any bank.

Any person acting in contravention of subsection (1) or subsection (2) of this section shall be guilty of an offence against this Ordinance and shall, on conviction, be liable to imprisonment for a term not exceeding three years or to a fine not exceeding five thousand dollars or to both such imprisonment and fine.

Where any offence against any provision of this Ordinance has been committed by a company, firm, society or other body or persons, any person who at the time of the commission of the offence was a director, manager, secretary or other similar officer thereof or was purporting to act in such capacity shall be deemed to be guilty of that offence unless he proves that the offence was committed without his consent or connivance and that he exercised all such diligence to prevent the commission of the offence as he ought to have exercised, having regard to the nature of his functions in that capacity and to all the circumstances.

Where any person would be liable under this Ordinance to any punishment or penalty for any act, omission, neglect or default he shall be liable to the same punishment or penalty for every such act, omission, neglect or default of any clerk, servant or agent, or of the clerk or servant of such agent provided that such act, omission, neglect or default was committed by such clerk or servant in the course of his employment, or by such agent when acting on behalf of such person, or by the clerk or servant of such agent when acting in the course of his employment in such circumstances that had such act, omission, neglect or default been committed by the agent his principal would have been liable under this section.

The Companies Ordinance (Cap. 174) is hereby amended —

309. Any company which carries on banking business in Singapore in contravention of the provisions of section 3, 4 or 34 of the Banking Ordinance, 1962, may, on petition by the Official Receiver, be wound up by the court under the provisions of Part IX of this Ordinance.”.

The provisions of this Ordinance shall be without prejudice to the provisions of sections 136, 137, 138, 139, 331, 332 and 333 of the Companies Ordinance in so far as they relate to banks and of sections 166 and 168 of the Companies Ordinance in so far as they relate to winding up by the court:Provided that if any such provision is inconsistent with any provision of this Ordinance the provision of this Ordinance shall prevail.

Banking business shall not be transacted in Singapore except by a company which is in possession of a license in writing from the Minister authorising it to do so.

A company which desires to carry on banking business in Singapore shall apply in writing through the Inspector to the Minister for a license under this section and shall supply —

Upon receiving an application under subsection (2) of this section the Inspector shall consider the application and make a recommendation to the Minister stating whether a licence should be granted or not and the conditions (if any) to be attached to the licence.

Upon receiving an application under subsection (2) of this section and the recommendation of the Inspector under subsection (3) of this section the Minister may subject to the provisions of section 4 of this Ordinance, grant a licence, with or without conditions, or refuse a license.

The Minister may at any time, on the recommendation of the Inspector, vary or revoke any existing conditions of a licence or impose conditions or additional conditions:Provided that the Minister shall, prior to any such action, notify his intention to take such action to the licensed bank concerned and shall give the bank an opportunity to submit reasons why its licence should not be so amended.

Where a licence is subject to conditions the licensed bank shall comply with those conditions.

Any person who contravenes the provisions of subsection (1) of this section shall be guilty of an offence against this Ordinance and shall, on conviction be liable to imprisonment for a term not exceeding three years or to a fine not exceeding five thousand dollars or to both such imprisonment and fine.

Any licensed bank which fails to comply with any conditions of its licence shall be guilty of an offence against this Ordinance and shall, on conviction, be liable to a fine not exceeding five thousand dollars.

Except with the consent in writing of the Minister, a person or body of persons not being a licensed bank shall not assume or use in relation to the business or any part of the business carried on by that person or body or persons the word “bank” or any of its derivatives or any word indicating the carrying on of banking business.

Any person who contravenes the provisions of subsection (1) of this section shall be guilty of an offence against this Ordinance and shall, on conviction, be liable to imprisonment for a term not exceeding three years or to a fine not exceeding five thousand dollars or to both such imprisonment and fine.

Nothing in this section shall apply to any association of banks or of employees of banks formed for the promotion of their mutual interests.

If any licensed bank —

Where the licence of a bank has been revoked under subsection (1) of this section the bank may, within thirty days of such revocation, appeal against such revocation to the High Court, which may make such order thereon as it thinks proper, including any directions as to the costs of the appeal.

A licensed bank shall within three months after the making of any alteration in the memorandum of association and articles of association or other instrument under which it is incorporated furnish to the Minister particulars in writing (verified by a statutory declaration made by a senior officer of the bank) of such alteration.

Any licensed bank which fails to comply with the requirements of subsection (1) of this section shall be guilty of an offence against this Ordinance and shall, on conviction, be liable to a fine not exceeding five hundred dollars for every day the default continues.

Every licensed bank shall —

If the Minister is satisfied that the aggregate reserve fund of a licensed bank whose head office is situated outside Singapore is adequate for its business he may by order in writing exempt such bank from the provisions of subsection (1) of this section.

Any licensed bank which fails to comply with the provisions of subsection (1) of this section shall be guilty of an offence against this Ordinance.

Every licensed bank shall —

Any licensed bank which fails to comply with any of the provisions of subsection (1) of this section shall be guilty of an offence against this Ordinance and shall, on conviction, be liable to a fine not exceeding five thousand dollars.

No licensed bank shall —

Any licensed bank which contravenes the provisions of this section shall be guilty of an offence against this Ordinance.

Every licensed bank shall when furnishing the returns required by section 12 of this Ordinance give particulars of all unsecured advances, unsecured loans or unsecured credit facilities granted by it to private or public companies in which it or any of its directors, officers, or employees is interested as director, manager, agent or guarantor.

If on examination of the particulars supplied by a licensed bank under subsection (1) of this section it appears to the Inspector that any such unsecured advances, unsecured loans or unsecured credit facilities are being granted to the detriment of the interests of the depositors of that bank, the Inspector shall so advise the Minister who may, by order in writing, prohibit that bank from granting any further such advances, loans or credit facilities or impose such restrictions on the grant thereof as he thinks fit, and may by like order direct that bank to secure repayment of any such advance, loan or credit facility within such time and to such extent as may be specified in the order.

Every licensed bank shall send to the Chief Statistician, Singapore, the Inspector and the Minister —

The Minister may on the recommendation of the Inspector by regulation vary or amend the forms set out in the First and Second Schedules to this Ordinance.

Any licensed bank which fails to comply with any requirement set out in subsection (1) of this section shall be guilty of an offence against this Ordinance and shall, on conviction, be liable to a fine not exceeding one thousand dollars for every day the default continues.

It shall be the responsibility of the Chief Statistician, Singapore, to prepare and to publish consolidated statements aggregating the figures in the returns furnished under subsection (1) of this section.

Every licensed bank shall inform the Minister through the Inspector of any proposed arrangement or agreement for any sale or disposal of its business by amalgamation or otherwise or of any proposal for reconstruction, and the Minister on the recommendation of the Inspector may approve or withhold approval or such arrangement or agreement or reconstruction:Provided that the approval of the Minister shall not be unreasonably withheld.

Any licensed bank which fails to comply with the provisions of subsection (1) of this section shall be guilty of an offence against the Ordinance.

Every licensed bank shall appoint annually an auditor, being a person approved by the Minister whose duties shall be to make a report to the shareholders of such bank upon the annual balance‑sheet and accounts; and in every such report the auditor shall state whether in his opinion the balance‑sheet is full and fair and properly drawn up, whether it exhibits a true and correct statement of the bank’s affairs, and, if the auditor has called for explanation or information from the officers or agents of the bank, whether it has been satisfactory.

The report of the auditor shall be read together with the report of the board of management of the licensed bank at the annual meeting of shareholders and a copy of it shall be sent to the Inspector for transmission to the Minister.

Any licensed bank which fails to comply with the requirements of subsection (2) of this section shall be guilty of an offence against this Ordinance and shall, on conviction, be liable to a fine not exceeding five thousand dollars.

If a licensed bank fails to appoint an auditor under subsection (1) of this section or at any time fails to fill a vacancy for an auditor the Minister shall have power to appoint an auditor and shall fix the remuneration to be paid by that bank to such auditor.

No person having an interest in a licensed bank otherwise than as a shareholder, and no director, officer or employee or agent of that bank, shall be eligible for appointment as an auditor for such bank, and any person appointed as auditor to a licensed bank who shall after such appointment acquire such interest or become a director or an officer or employee or agent of such bank shall forthwith cease to be such auditor.

The duties, powers and liabilities imposed and conferred by section 20 of the Ordinance in relation to an investigation by the Inspector of the affairs of a licensed bank under section 17 or 18 of this Ordinance are hereby imposed and conferred in relation to auditors appointed under this section.

Where in the case of a licensed bank whose head office is situated outside Singapore the Minister is satisfied that a report has been duly made by an auditor in accordance with the law of the country in which such head office is situated upon the annual balance‑sheet and accounts of such bank, and a copy of such report together with the report of the board of management of such bank is sent to the Inspector for transmission to the Minister, he may by notice in writing exempt any such bank from the provisions of this section.

In order to facilitate the clearing of cheques and other credit instruments for banks carrying and business in Singapore the Minister shall, at an appropriate time and in conjunction with banks operating in Singapore, establish a Clearing House.

The Minister may by order require each bank to open either immediately or over a specified period of time a clearing account with the Clearing House of an amount which the Minister may from time to time determine.

A bank shall settle, by means of cheques drawn on and paid into its account with the Clearing House, all the balances between itself and any other bank arising out of the general clearances effected in Singapore and such other places as the Minister specifies.

The Minister may cause an investigation under conditions of secrecy, to be made by the Inspector of the affairs of a bank on the application —

Such application shall be supported by such evidence as the Minister may require for the purpose of satisfying himself that the applicants have good reason for requiring such investigation. The Minister may also require the applicants to give such security as he may deem sufficient for the payment of the costs of any investigation.

For the purposes of an investigation under sections 17, 18 and 19 of this Ordinance a licensed bank shall afford the Inspector access to its books, accounts, and documents and shall give such information and facilities as may be required to conduct the investigation:Provided that such books, accounts and documents shall not be required to be produced at such times and at such places as shall interfere with the proper conduct of the normal daily business of the bank.

If any book, account or document or information is not supplied in accordance with subsection (1) of this section, the licensed bank concerned shall be guilty of an offence against this Ordinance and shall, on conviction, be liable to a fine not exceeding one thousand dollars in respect of every day the default continues.

For the purposes of an investigations under sections 17, 18 and 19 of this Ordinance the Inspector shall be deemed to be a public servant within the meaning of the Penal Code (Cap. 119).

Where the Inspector has assumed control of the business of a licensed bank in pursuance of paragraph (3) of section 21 of this Ordinance the Inspector shall, subject to subsection (2) of this section, remain in control of, and continue to carry on the business of that bank in the name and on behalf of the bank until such time as —

Where the Inspector has assumed control of the business of a licensed bank in pursuance of paragraph (3) of section 21 of this Ordinance, the High Court may upon application of the bank, if the High Court is satisfied that it is no longer necessary for the protection of the depositors of the bank that the Inspector should remain in control of the business of the bank, order that the Inspector shall cease to control the business of the bank as from a date specified in the order.

Where the Inspector has assumed control of the business of a licensed bank in pursuance of paragraph (3) of section 21 of this Ordinance or ceases to control the business of a licensed bank in pursuance of this section, the Inspector shall notify that fact in the Gazette.

Where the Inspector has assumed control of the business of a licensed bank in pursuance of paragraph (3) of section 21 of this Ordinance the licensed bank shall submit its business to the control of the Inspector and shall provide the Inspector with such facilities as the Inspector requires to carry on the business of that bank.

Any licensed bank which fails to comply with subsection (1) of this section or with any requirement of the Inspector thereunder shall be guilty of an offence against this Ordinance and shall, on conviction, be liable to a fine not exceeding one thousand dollars for every day during which such default continues.

Notwithstanding the provisions of sections 3 and 4 of this Ordinance any bank specified in the Third Schedule to this Ordinance which on the 1st day of January, 1962 was carrying on banking business in Singapore shall, subject to the provisions of subsection (2) of this section, upon the coming into operation of this Ordinance be granted a licence, which may be made subject to such conditions, if any, as are contained in any licence under which the bank was carrying on banking business in Singapore immediately before the date of such coming into operation.

No bank shall be granted a licence under subsection (1) of this section, nor shall any bank licensed thereunder carry on business in Singapore without the written consent of the Minister, if —