Clause 14

Notwithstanding the provisions of any written law or rule of law relating to the winding up of companies, in the event of a winding up of a bank the deposit liabilities of the bank shall, amongst themselves, rank in the following order of priority:

firstly, deposit liabilities incurred by the bank with non-bank customers where the deposit liabilities are required by the Authority to be included in the computation of the reserve and liquidity requirements pursuant to sections 34 and 35;

secondly, deposit liabilities incurred by the bank with other banks where the deposit liabilities are required by the Authority to be included in the computation of the reserve and liquidity requirements pursuant to sections 34 and 35;

thirdly, deposit liabilities incurred by the bank with non-bank customers where the deposit liabilities are not required by the Authority to be included in the computation of the reserve and liquidity requirements pursuant to sections 34 and 35.(2) The deposit liabilities in each class specified in subsection (1) shall rank in the order specified therein but as between deposit liabilities of the same class shall rank equally between themselves and shall be paid in full unless the assets of the bank are insufficient to meet them in which case they shall abate in equal proportions between themselves.(3) For the purposes of section 56 and this section, “deposit liabilities of a bank” means sums of money paid on terms —

under which they will be repaid, with or without interest or at a premium, and either on demand or at a time or in circumstances agreed by or on behalf of the persons making the payments and the bank receiving them; and

which are not referable to the provisions of property or services or to the giving of security.(4) For the purposes of subsection (3)(b), money is paid on terms which are referable to the provisions of property or services or to the giving of security if, and only if, —

it is paid by way of advance or part-payment for the sale, hire or other provision of property or services of any kind and is repayable only in the event that the property or services is or are not in fact sold, hired or otherwise provided;

it is paid by way of security for payment for the provision of property or services of any kind provided or to be provided by the bank by whom or on whose behalf the money is accepted; or

it is paid by way of security for the delivery up or return of any property, whether in a particular state of repair or otherwise.Redemption of securities held by bank under liquidation56B.—

As soon as practicable after the making of an order for the winding up of a bank, the liquidator of the bank shall publish in the Gazette a notice requiring every debtor of the bank to redeem any property he has deposited with the bank as security for any loan that he has obtained from the bank, and shall also send by registered post such notice to every debtor whose security is held by the bank and whose name is mentioned in the statement of affairs made out under section 234 of the Companies Act (Cap. 185).(2) The notice shall specify the latest date up to which any security may be redeemed, which date shall not be less than 3 months from the date of the notice.”.