Jerusalem (Jan. 14)
Definite recommendations for the regulation of small banking concerns in Palestine are included in the report of the government commission to study existing bank laws, it was learned here today. The commission has completed its investigation and is now preparing its report for submission to the government.
Due to the flourishing prosperity of Palestine, hundreds of small banks are transacting business without having sufficient cover for their transactions and without this condition being realized, the report will point out. it is learned. The present banking laws permit banks to be established and conduct business without any minimum capital requirement or reserve.
CHANGES IN LAW
To remedy this, the commission, according to informed banking circles, will recommend changes in the banking ordinances requiring all banks to have a minimum paid-up capital of $125,000 before they can engage in active banking. Foreign banks, it is believed, will have to meet a higher requirement. Some authoritie believe the commission will ask that this figure be fixed at $500,000. Banks now operating here would be given a definite time to bring their capital up to the required minimum or to be liquidated. The recommendations will also fix responsibility for statements on auditors.
Among the suggestions which the commission received in the course of its investigation was the elimination of the words “Royal” and “National” as part of the names of banks. Another was that bank stationery must state not only the authorized capital but the paid-up capital as well.
It is believed that the commission’s report, in general, will find the old ordinances under which Palestine banking functions outmoded by the remarkable commercial, industrial and agricultural growth of the country and its tremendously increased wealth in recent years.