Introduction

Modern Singapore was founded in 1819 with the establishment of a trading station for the British East India Company. This marked the beginning of British rule and gave rise to the development of Singapore’s entrepôt trade. In 1959 Singapore was granted full self-government in domestic affairs and in September 1963 it became part of Malaysia. On August 9, 1965, following its separation from Malaysia, Singapore proclaimed itself an independent republic. As a result of its long-standing role as an entrepôt, Singapore has developed a relatively extensive and sophisticated banking system over the years and has become a major financial center of the region.

The financial system in Singapore has undergone significant changes following the establishment of the Asian Currency Market in 1968 and, subsequently, the Monetary Authority of Singapore in 1971. Since then, a number of new financial institutions have been established and their activities have widened with the rapid development of the existing financial markets. These developments, while largely a result of government policy measures, also reflected the expansion of the domestic economy, as well as the rapid growth of the world economy in the early 1970s.

The financial system in Singapore comprises the Currency Board, the Monetary Authority of Singapore, commercial banks, the Central Provident Fund, the Post Office Savings Bank, the Development Bank of Singapore, merchant banks, discount houses, finance companies, and insurance companies. The Monetary Authority of Singapore performs central banking functions, excluding currency issue which is vested in the Board of Commissioners of Currency (the Currency Board). The major financial markets in Singapore are the money market, the capital market, and the Singapore-based Asian Currency Market.

Historically, because of Singapore’s heavy reliance on exporting as a primary vehicle of growth, the role and structure of Singapore’s financial system had been geared toward financing foreign trade. However, reflecting a transition to rapid industrialization and diversification, since the late 1960s marked emphasis has been placed on structuring the financial system toward the development needs of the economy and the growth of a regional financial center.

In its initial stage, the Monetary Authority was largely concerned with the development of a statutory and institutional framework for central banking in Singapore. Consequently, monetary policy was relatively passive, and the development of monetary policy instruments relatively slow. Since 1973, with the emergence of inflation and recession, monetary policy has assumed an active role through the use of moral suasion, changes in requirements on minimum cash balances and on liquidity ratio, special deposit requirements, overall as well as selective credit control, and money market operations.

Structure of Financial System

Singapore’s Financial Markets

Since its inception in 1971, the Monetary Authority has developed a modest market for government securities, widened and activated the money market, and generally brought confidence and greater stability to the company share market. The international monetary crisis of 1971–73 (which induced significant flows of foreign funds into Singapore) and the establishment and operation of new merchant banks, discount houses, and money brokers also contributed to the rapid growth of Singapore’s money and capital markets. The liberal banking and exchange regulations, on the other hand, were important factors responsible for making the markets more internationally oriented. These improvements in the scope and structure of the money and capital markets, in turn, increased the volume and range of local financial assets and widened the scope of monetary control, allowing the Monetary Authority to use traditional central banking instruments in the money market to make direct liquidity control more effective.

Money market

The money market in Singapore consists of the Singapore dollar deposit market and the foreign exchange market.

The Singapore dollar deposit market comprises both overnight funds and term deposits. These are mainly for 1-month or 3-month periods, but may extend up to 6 and 12 months. The market is used mainly by the banks to meet their liquidity requirements and commercial loan portfolios. In addition, there is a secondary market, consisting mainly of bills of exchange, treasury bills, and the Singapore dollar negotiable certificate of deposits, which was first issued in May 1975.⁶ The rapid growth of these financial assets has been due largely to official measures taken to provide banks with short-term earning assets through a substantial expansion in the issue of treasury bills, provision for discounting facilities, and approval for the operation of money dealers and discount houses.⁷ Generally, local banks are net lenders of interbank funds, while foreign banks are net borrowers, largely for the purpose of maintaining liquidity. The freeing of interest rate quotation by banks in July 1975, which hitherto was determined by the Association of Banks under a cartel arrangement, made interest rates more sensitive to changes in domestic and international market conditions and contributed to the growth of the money market.

The foreign exchange market consists of both Singapore dollar-based foreign exchange, mainly against U.S. dollars, and the “third currency” exchange not involving Singapore dollars. There are 85 authorized banks and 29 merchant banks licensed to deal in foreign exchange and 7 brokers who are allowed to operate only on an agency basis. Market forces determine the foreign exchange rates. The forward market is still small but growing. Commercial banks have been making available, on a daily basis, forward rates for periods up to one year. Most forward transactions are between the Singapore dollar and the U.S. dollar. The non-banking sector is permitted to deal in forward exchange to cover forward transactions, including borrowing for business purposes. The Monetary Authority does not intervene in the forward market, but enters, infrequently, into swap transactions with banks. The “third currency” market is fast becoming important, with deutsche mark, Japanese yen, Swiss francs, and sterling the principal currencies.

The concept of a foreign currency deposit market housed in the banking system in Singapore was in many ways a logical progression from Singapore’s historic role as one of Asia’s key entrepôt trade centers to a regional financial center. Singapore-based banks have been assuming risks for the rest of the region, squaring their own books in the afternoon when London and European markets open. Thus, Singapore provides a vital link with the European market.

Capital market

The Stock Exchange of Singapore ⁸ is the chief organized capital market, where bonds and shares are issued, purchased, and sold. The securities industry and listed companies are regulated by the Securities Industry Act, 1973. The Act stipulates that stockbrokers and dealers in securities are required to be licensed and to maintain trust accounts subject to audit. In March 1973, the Securities Industry Act was introduced in order to control speculative manipulation of the stock market, takeovers, or mergers. The Securities Industry Council was also formed in February 1973 to act as an advisory council and a watchdog over the market; new issues of shares through public subscription must be approved by the Council.

Various steps have been taken to develop the domestic capital market. Government bonds with varied maturities have been issued at frequent intervals. The brokerage fee was lowered in 1975 in order to stimulate activities in government bonds through the Exchange. The Monetary Authority has relaxed exchange control regulations and nonresidents are now allowed to buy and sell securities listed on the Exchange. There is no restriction on the remittance of money out of Singapore on the sale of securities and no taxation of capital gains. Underwriting facilities have been provided in the capital market by the various commercial and merchant banks. Turnover at the Stock Exchange in 1981 amounted to S$13.5 billion, representing a sharp increase from the generally depressed level at around S$l–2 billion during 1974–77.

Asian Currency Market

The Asian Currency Market, popularly known as the Asian Dollar Market, is an international money and capital market located in Singapore, which began operations in October 1968. The size of the market has expanded rapidly since its inception, both in terms of resources as well as in the number of financial institutions; as measured by the total liabilities of the banks in the market, resources rose from US$31 million in 1968 to almost US$65.1 billion in March 1981.

The rapid growth of the market can be attributed to several factors. First, the accelerated economic growth of the region generated a growing regional demand for an international financial center that could cater to regional needs. The termination of the preferential exchange control arrangements among sterling area countries in June 1972 also contributed to the growth of demand for regional funds. Second, Singapore’s traditional role as the major entrepôt trading center in the region and its overlapping working hours with the major financial centers in Europe provided a distinct advantage over competing regional financial centers. Third, the Singapore Government has introduced a series of measures designed to promote the growth of the market. These included the provision of fiscal incentives such as the removal in 1969 of the 40 per cent withholding tax on interest paid on deposits; the reduction in 1973 of the corporate income tax on interest receipts derived from offshore loans from 40 per cent to 10 per cent; the waiver of the stamp duties on negotiable certificates of deposit, bills of exchange in 1970, and on bond certificates issued in the Asian Currency Market in 1973. Since 1978, the concessionary tax rate of 10 per cent was extended to cover all offshore income derived by the ACU from its offshore operations.

To facilitate operations in the market, an interbank market was inaugurated, and negotiable certificates of deposit denominated in U.S. dollars were issued in 1970. In November 1977 floating rate U.S. dollar negotiable certificates of deposit were introduced, shortly after they were first issued in the Eurocurrency market. To encourage lending operations, the liquidity requirement (20 per cent of deposit liabilities) was eliminated in 1972, thereby making the participants in the market more competitive in their operations vis-à-vis the Eurocurrency market. Initially, participation by Singaporean nonbank residents in the market was subject to various restrictions. Over the years, however, these have been progressively lifted and since June 1978 with the liberalization of exchange control, the restrictions have been completely eliminated. Residents can now invest or borrow from the Asian Dollar Market without any limit or restrictions.

To operate in the market, banks must obtain licenses from the Monetary Authority and are required to maintain a bookkeeping unit called the Asian Currency Unit (ACU) to distinguish between records of transactions in the market and those of domestic banking business. ACUs are authorized to accept deposits in all currencies other than Singapore dollars and to lend to both nonresidents and residents.⁹ While transactions in the Asian Currency Market can occur in all foreign currencies, in June 1979 about 90 per cent of deposits were in U.S. dollars.

The financial resources of ACUs consist of inter-ACU funds, funds from the Eurocurrency market, and deposits by nonbanking sectors mainly comprising the regional multinational corporations and private individuals. During 1970–81, as a result of the rapid expansion of the regional activities of the international corporations and the transfer of deposits by private individuals from the Eurocurrency market to the Asian Currency Market, primary deposits increased rapidly at an annual rate of over 60 per cent, reaching US$9.5 billion at the end of March 1981. However, the share of these nonbank deposits in total deposits declined during the period as bank deposits grew even more rapidly, due primarily to an expansion of interbank transactions within ACUs and with the Eurocurrency market. Since 1971, there has been a net inflow of funds to the Asian Currency Market from the Eurocurrency market reversing a previous trend of funds flowing from the Asian Currency Market to the Eurocurrency market. This reflects the changing character of the market from a marginal supplier of idle local funds for the Eurocurrency market to a channel for investment finance to the region.¹⁰ Pari passu with this shift, deposit interest rates have become increasingly competitive vis-à-vis Eurocurrency rates.

In the past, because of the absence of suitable investment outlets in southeast Asia, most ACU funds were invested either in the Eurocurrency market or in companies in Europe. However, the rapid growth of economic activities in this region in the early 1970s generated a need for greater financial resources. As a result, about US$29 billion, or about 73 per cent of the market’s resources at the end of 1979, has been absorbed by Asian countries. It is estimated that the bulk of such loans to Asian countries was accounted for by Hong Kong, Japan, and countries of the Association of South East Asian Nations,¹¹ all of which have been net borrowers from ACUs. Some of these placements have taken the form of large syndicated loans for financing development projects, with maturities ranging from three to ten years. Interest rates on most of these loans were floating rates based on the Singapore Inter-Bank Offered Rate (sibor). The maturity structure of total assets and liabilities of the ACUs, however, indicates that it is still basically a short-term market where the bulk of transactions do not exceed one year.¹²

The Asian Currency Market has also been active in floating long-term bonds. From 1971, when the first bond was issued, to the early part of 1975, there were only 4 issues totaling US$70 million, the amount of each issue ranging from US$10 million to US$30 million. Since 1976, however, activities in the bond market picked up rapidly owing partly to a number of changes in taxation and exchange control regulations introduced in that year; in 1980, 18 bond issues totaling US$659 million were floated in the market.

The Asian Currency Market has benefited the Singaporean economy directly by providing employment, tax, and other revenues, as well as indirectly by upgrading skills and expertise in offshore banking operations. Rough estimates indicate that income and profits derived from the market amounted to about 3 per cent of national income in 1975. The authorities have introduced a series of measures designed to minimize any adverse effects of the market on domestic monetary management. In 1973, when Singapore experienced unprecedented inflation, the authorities introduced a special reserve requirement against domestic banks’ net foreign interbank liabilities, in order to restrain the expansion of domestic bank credit. This requirement was abolished in March 1974, as the inflow of speculative foreign funds began to slow down following the flotation of the Singapore dollar on June 21, 1973. As a result of these measures, the presence of the market has not so far posed any important difficulties to domestic monetary management.

Monetary Policy Instruments and Their Effectiveness

Prior to the establishment of the Monetary Authority, the authorities preferred to keep official control over banking activities to a minimum. The Singapore Board of Commissioners of Currency had the automatic function of issuing currency against prescribed assets and no policy functions. The Commissioner of Banking had the supervisory function of ensuring that banks observed sound banking practices mainly to protect depositors’ interests.

Since its establishment on January 1, 1971, and until about the latter part of 1972, the Monetary Authority was concerned largely with the development of the statutory and institutional framework of central banking in Singapore. Consequently, monetary policy was relatively passive and the development of monetary policy instruments relatively slow. With emergence of inflationary pressures in 1973, and the development of recessionary tendencies in subsequent years, monetary policy has assumed a more active role. The Monetary Authority is authorized to set the statutory required minimum cash balance and liquidity ratio for commercial banks and finance companies, to engage in money market operations, and to provide general instructions and guidance to the banks regarding the volume and direction of their advances.

Commercial banks in Singapore are required to maintain a minimum cash balance with the Monetary Authority of 6 per cent of their deposit and other liabilities, and a minimum liquid assets ratio of 20 per cent of deposit and other liabilities, out of which a minimum of 10 per cent has to be held in primary liquid assets,¹³ while finance companies have to maintain 6 per cent of their total deposit liabilities in minimum cash balances and a minimum of 10 per cent in liquid assets. The Monetary Authority has used the statutory required minimum cash balance and the liquidity ratio flexibly in the past, raising them late in 1972 to curb the expansion of bank credit and lowering them in the middle of 1974 to stimulate the growth of bank credit in the light of the recessionary condition in the economy. In January 1973, the Monetary Authority also introduced a special reserve requirement on net foreign interbank liabilities in order to discourage the inflow of short-term capital during the inflationary period. This requirement was gradually reduced to zero in March 1974, when the speculative foreign capital inflow largely subsided, following the floating of the Singapore dollar on June 21, 1973. However, in March 1974, the Monetary Authority imposed a ceiling on total bank credit to limit the expansion of bank credit, and it exercised selective control to restrain the growth of credit for speculative purposes; the credit ceiling was lifted in January 1975.

The money market operations of the Monetary Authority consist primarily of issuing and rediscounting treasury bills, rediscounting trade bills, making overnight loans to the commercial banks, and carrying on operations in the foreign exchange market. The Monetary Authority uses the discount houses as its agents for purchases and sales of commercial and treasury bills. Following the 1972 amendment to the Monetary Authority of Singapore Act, the discount houses were allowed to borrow from the Monetary Authority on the collateral of treasury bills and other government securities; the lender-of-last-resort facility to commercial banks has not been operative. The market for government securities has been relatively narrow and dominated by medium-term securities, which are mostly held to maturity by the Central Provident Fund. The most important operation in terms of the value of paper involved is the export rediscounting facility. Begun in May 1975 in conjunction with the export drive, it was initially confined to certain kinds of export transactions and only to selected types of paper, but its coverage has gradually been extended, so that it embraces most of the important bills of exchange and other documents used in export finance. The duration of this credit facility is limited to 90 days. Overnight loans to banks have been extended only in limited cases to relieve banks of temporary shortages of funds. Foreign exchange operations have also been limited to the extent that they do not disrupt the orderliness of the exchange market; the Monetary Authority engages in swap operations with the commercial banks, but not on a large scale.

In Singapore there have been no official regulations governing commercial banks on interest rates payable on deposits or loans to customers. Even after the establishment of the Monetary Authority, interest rates were controlled by the Association of Banks in consultation with the Monetary Authority. As from July 1975 each bank has been free to quote its own rates, thus allowing more competition among financial institutions in Singapore. This measure reflects the prevailing official thinking that in a small and open economy such as Singapore’s, the effectiveness of an “independent” bank rate would be very limited, for any divergence between domestic interest rates and external rates by more than 1 or 2 percentage points would induce capital flows. The difficulty is further accentuated by the fact that the Monetary Authority cannot engage in effective open market operations to supplement the bank rate policy.

Part I. Preliminary

Short title.

1. This Act may be cited as the Currency Act.

Interpretation.

2. In this Act, unless the context otherwise requires—

“Board” means the Board of Commissioners of Currency, Singapore, established by section 3 of this Act;

“Commissioners” means the Board of Commissioners of Currency, Malaya and British Borneo, reconstituted in accordance with the terms of the 1960 Currency Agreement;

“foreign” means pertaining to a country other than Singapore;

“foreign exchange” means foreign currencies and claims in and to foreign currencies;

“issue” includes reissue;

“the 1960 Currency Agreement” means the Malaya British Borneo Currency Agreement, 1960.

Part II. Establishment, Constitution and Objectives and Administration of Board

Establishment and purpose of Board.

3. (1) There shall be established a Board to be known as the “Board of Commissioners of Currency, Singapore”.

(2) The Board shall issue currency notes and coins in Singapore in accordance with section 14 of this Act.

Incorporation, etc.

4. (1) The Board shall be a body corporate with perpetual succession and a common seal with power, subject to the provisions of this Act, to acquire and dispose of property, both movable and immovable, and may sue and be sued in its corporate name and perform such other acts as bodies corporate may by law perform.

(2) The Board shall have its head office in Singapore.

(3) The Board may appoint a person or persons or corporation to be its agents or correspondents for the purposes of this Act.

(4) No resolution or decision taken by the Board and no other act or thing made or done by the Board or any officer or servant of the Board in the exercise of any right or power or in the performance of any duty conferred or imposed upon the Board, or upon such officer or servant, under or by virtue of the provisions of this Act shall be invalid by reason only that the same was not taken, made or done within Singapore.

(5) The Board shall not be subject to any tax, fee or levy whatsoever.

Employment of officers, etc.

5. (1) The Board may appoint such officers and employees as it considers to be necessary for the efficient conduct of the business of the Board upon such terms and conditions as may be determined by the Board.

(2) The Board and its officers and servants shall be deemed to be public servants within the meaning of the Penal Code.

Composition of the Board.

6. (1) The Board shall consist of—

• (a) the Chairman, who shall be the Minister responsible for finance;

• (b) the Deputy Chairman, who shall be appointed by the President for a specific period and shall vacate his office without prejudice to his eligibility for reappointment at the expiration of that period; and

• (c) four other members possessing recognised banking, financial or business experience who shall be appointed by the President from time to time for such periods as the President may decide.

(2) The Deputy Chairman shall act for the Chairman whenever he is absent.

(3) If the Deputy Chairman is temporarily absent from Singapore or temporarily incapacitated through illness or any other sufficient reason from the performance of his duties, another person may be appointed by the President during such temporary absence or incapacity.

(4) If a member appointed under paragraph (c) of subsection (1) of this section suffers an incapacity which is likely to be prolonged, the President may appoint a temporary substitute to act with the full powers of that member until such time as the President determines that the incapacity has ceased.

Meetings of the Board.

7. (1) The Board shall meet at least once in each calendar year and at such times or places as may be deemed necessary by the Chairman:

Provided that the Chairman shall call a meeting as soon as practicable after receiving a request from at least two members.

(2) A quorum for any meeting of the Board shall be three members.

(3) No meeting of the Board, as provided for in this section, shall be held unless the Chairman or the Deputy Chairman is present.

(4) The Chairman and the Deputy Chairman shall each have two votes and the members appointed under paragraph (c) of subsection (1) of section 6 of this Act shall each have one vote.

(5) Any question arising at a meeting of the Board shall be decided by a majority of votes.

(6) In the event of an equality of votes the Chairman presiding at the meeting shall have a casting vote.

General disqualifications for Deputy Chairman and other members.

8. (1) The Deputy Chairman or a member shall be relieved of his office if he—

• (a) becomes bankrupt or insolvent, applies for any benefits under the law for the relief of bankrupt or insolvent debtors, compounds with his creditors or makes any assignment in whole or in part of his income from the Board for the benefit of such creditors;

• (b) is convicted of an offence involving dishonesty or fraud or moral turpitude;

• (c) becomes totally or permanently incapable of performing his duties; or

• (d) is guilty of misbehaviour that would bring his office into disrepute.

(2) The President shall terminate the appointment of a member who absents himself from three consecutive meetings of the Board without leave.

Member’s interest in contract to be made known.

9. (1) A member who is directly or indirectly interested in a contract made, or proposed to be made, by the Board shall disclose the nature of his interest at the first meeting of the Board at which he is present after the relevant facts have come to his knowledge.

(2) A disclosure under subsection (1) of this section shall be recorded in the minutes of the Board and, after the disclosure, such member—

• (a) shall not take part in any deliberation or decision of the Board with respect to that contract; and

• (b) shall be disregarded for the purpose of constituting a quorum of the Board for any such deliberation or decision.

(3) No act or proceeding of the Board shall be questioned on the ground of the contravention by a member of the Board of the provisions of this section.

Preservation of secrecy.

10. Except for the purposes of the performance of his duties or the exercise of his functions or when lawfully required to do so by any court or under the provisions of any law, no member, officer or employee of the Board shall disclose to any person any information which he has acquired in the performance of his duties or the exercise of his functions.

Part III. Currency

Currency of Singapore.

11. (1) The unit of currency of Singapore shall be the Singapore dollar, which shall be divided into one hundred cents.

(2) The abbreviated form of the Singapore dollar shall be “S$”.

Par value.

12. The par value of the Singapore dollar shall be 0.290299 grammes of fine gold which shall not be varied except by the President in accordance with the Articles of Agreement of the International Monetary Fund.³

Use of Singapore dollar.

13. All monetary obligations or transactions in Singapore shall be deemed to be expressed and recorded, and shall be settled in the Singapore dollar unless otherwise provided for by law or validly agreed upon between the parties.

Board to have sole right to issue currency legal render.

14. (1) The Board shall have the sole right to issue currency notes and coins in Singapore and, subject to subsection (3) of this section, only such notes and coins issued by the Board shall be legal tender in Singapore.

• (2) (a) Notes issued by the Board shall be legal tender up to their face value for the payment of any amount.

• (b) Coins issued by the Board, if the coins have not been illegally dealt with, shall be legal tender up to their face value in Singapore as follows:

  • (i) in the case of coins of a denomination exceeding one dollar—for the payment of any amount;

  • (ii) in the case of coins of the denomination of fifty cents and one dollar—for the payment of an amount not exceeding ten dollars; and

  • (iii) in the case of coins of a denomination lower than fifty cents—for the payment of an amount not exceeding two dollars.

(3) Notwithstanding the provisions of subsection (1) of this section—

• (a) the notes and coins of any series or denominations issued by the Board of Commissioners of Currency, Malaya and British Borneo, which were legal tender in Singapore immediately prior to the date of the coming into operation of this Act; and

• (b) coins made available by the Commissioners to the Board under the provisions of paragraph (b) of clause 18 of the 1960 Currency Agreement,

shall continue to be legal tender in Singapore for such time as the President may, on the recommendation of the Board, by notification in the Gazette determine.

• (4) (a) Notes issued by the Commissioners which were legal tender in Singapore immediately prior to the date of the coming into operation of this Act shall be legal tender in Singapore as follows:

  • (i) currency notes of denominations of one dollar and above—for the payment of any amount; and

  • (ii) currency notes of denominations of less than one dollar—for the payment of any amount not exceeding two dollars.

• (b) Coins issued by the Commissioners which were legal tender in Singapore immediately prior to the date of the coming into operation of this Act and coins made available by the Commissioners to the Board under the provisions of paragraph (b) of clause 18 of the 1960 Currency Agreement, if the coins have not been illegally dealt with, and if of silver have not become diminished in weight by wear or otherwise, so as to be of less weight than the weight in that behalf specified in the First Schedule to the 1960 Currency Agreement as the least current weight, shall be legal tender in Singapore as follows:

  • (i) up to an amount not exceeding ten dollars in the case of coins of the denomination of fifty cents and above; and

  • (ii) up to an amount not exceeding two dollars in the case of coins of a lower denomination.

(5) For the purposes of this Act, a coin shall be deemed to have been illegally dealt with where the coin has been impaired, diminished, or lightened otherwise than by fair wear and tear, or has been defaced by having any name, word, device, or number stamped or engraved thereon, whether the coin has or has not been thereby diminished or lightened.

(6) In any criminal proceedings in which the genuineness of any currency note or coin may be in question, a certificate signed by the Deputy Chairman of the Board that he is satisfied by personal examination that such note or coin is or is not forged shall be held to be conclusive evidence of the same and neither the Deputy Chairman nor any officer of the Board shall be cross-examined with regard to the contents of such certificate unless the court otherwise orders.

Bills and notes payable to bearer on demand.

15. (1) No person shall draw, accept, make or issue any bill of exchange, promissory note or engagement for the payment of money payable to bearer on demand or borrow, owe or take up any sum or sums of money on bills or notes payable to bearer on demand.

(2) Cheques or drafts payable to bearer on demand may be drawn on bankers or agents by their customers or constituents in respect of moneys in the hands of these bankers or agents held by them at the disposal of the persons drawing such cheques or drafts.

(3) Any person who contravenes the provisions of this section shall, notwithstanding anything to the contrary in the Criminal Procedure Code, on conviction by a Magistrate’s Court be liable to a fine equal to the amount of the bill, note or engagement in respect whereof the offence is committed notwithstanding that the amount of such fine may be in excess of the original jurisdiction of such court.

(4) No prosecution under this section shall be instituted without the sanction of the Public Prosecutor.

Conversion of currency notes and coins into sterling and vice versa.

16. (1) The Board shall issue, on demand by any person at any of its offices, currency notes to the equivalent value of sums in sterling lodged by that person with the Board’s agent in London for its account; and shall pay, on demand by any person, sterling in London to the equivalent value of currency notes lodged with it by that person:

Provided that such notes have been issued by the Board.

(2) The Board may, at its option, issue coins in the same manner and subject to the same conditions as are prescribed in subsection (1) of this section for the issue of currency notes.

(3) Coins issued shall, subject to any regulations made under section 31 of this Act, be redeemed by the Board in the same manner and subject to the same conditions as are prescribed in subsection (1) of this section for the redemption of currency notes.

Conversion of currency notes and coins into gold and other foreign currencies and vice versa.

17. Notwithstanding the provisions of section 16 of this Act, the Board may issue and redeem in its absolute discretion, currency notes and coins against gold and other currencies eligible for inclusion in the reserve of external assets specified under section 24 of this Act.

Exchange rate.

18. (1) All issues and redemptions of currency notes and coins by the Board shall be effected at the parity specified in section 12 of this Act.

(2) The Board shall be entitled—

• (a) to charge and levy from any person obtaining currency notes and coins or sterling, or gold or other currencies, a commission at such rate or rates as may, from time to time, be determined:

  • Provided that the commission charged shall be consistent with the Articles of Agreement of the International Monetary Fund; ⁴

• (b) to determine, from time to time, the minimum sum or sums which a person shall be entitled to lodge with the Board or its agents, as the case may be, for the purpose of obtaining currency notes and coins or sterling or gold or other currencies;

• (c) to prescribe the hours of the day during which the Board will issue and redeem currency.

(3) The amounts of such rate or rates and minimum sum or sums shall be notified in the Gazette by the Board.

Form and design of currency notes and coins.

19. (1) Currency notes issued by the Board shall be of such denomination and of such form and design and printed from such plates and on such paper and may be authenticated in such manner as the Board may, from time to time, decide.

(2) The plates shall be prepared and kept and the notes printed, issued and cancelled in accordance with any directions of the Board for the prevention of fraud and improper use.

(3) Coins issued by the Board shall be of such denominations and of such weight, form and design, and made of such metal or metals as the Board may, from time to time, decide.

(4) The Board shall publish in the Gazette the denominations and other characteristics of notes and coins issued by it.

Demonetisation of currency notes and coins.

20. (1) The Board may declare by notification published in the Gazette the withdrawal of any particular issue or denomination of notes and coins issued by the Board.

(2) Any such notification shall give holders of the notes and coins to be withdrawn a reasonable period, in any event not less than six months, within which such notes or coins shall be exchanged at their face value for other legal tender issued by the Board.

Imperfect notes or coins.

21. (1) No person shall be entitled to recover from the Board the value of any mutilated or imperfect note or coin or any coin which has been illegally dealt with.

(2) The circumstances in which, and the conditions and limitations subject to which the value of mutilated or imperfect notes or coins, or coins which have been illegally dealt with, may be refunded as an act of grace shall be within the absolute discretion of the Board.

Restriction on the use of photographs, drawing or design of notes in advertisements, etc.

22. Except with the permission of the Board, no person shall, in any size, scale or colour, use any photograph of or any drawing or design resembling any notes or part thereof, in any advertisement or on any merchandise or products which that person manufactures, sells, circulates or otherwise distributes.

Currency Fund.

23. (1) The Board shall establish a Currency Fund (hereinafter in this Act referred to as “the Fund”) which shall be maintained and managed exclusively by the Board in the manner prescribed in this Act.

(2) There shall be paid into the Fund—

• (a) all gold, sterling and other foreign currencies received in exchange for currency notes or coins; and

• (b) the proceeds of any transactions under paragraph (c) of subsection (6) of this section, less all expenses incurred in connection therewith.

(3) Save as otherwise provided in this Act the Fund shall be applied for meeting the redemption of currency and for no other purpose.

(4) A portion of the Fund shall be held in liquid form and such portion may be determined and varied from time to time by the Board, except that at no time shall less than thirty per cent of the Fund be so retained without the unanimous approval of all members of the Board.

(5) The liquid portion of the Fund held in accordance with the provisions of subsection (4) of this section shall be held in any or all of the following forms:

• (a) gold in any form;

• (b) sterling and other foreign exchange in the form of—

  • (i) demand or time deposits, maturing within two years, with the Board’s agents or correspondents abroad;

  • (ii) bank balances and money at call;

  • (iii) Treasury Bills;

  • (iv) notes or coins;

• (c) securities, maturing within two years, of or guaranteed by foreign Governments or international financial institutions.

(6) Notwithstanding anything contained in the preceding subsections, the Board may—

• (a) use any coin held for the account of the Fund for the purpose of having it reminted into current coin;

• (b) pay from the Fund the cost of the purchase of metal to be minted into current coin; and

• (c) sell any coin held for the account of the Fund.

(7) The value of the Fund for any of the purposes of this Act shall be the current realisable value of the whole of the assets held in the Fund, investments of the Fund being valued at their current market price at the time of valuation; and for the purposes of valuation, the assets shall be converted into dollars at the rate of exchange specified in section 12 of this Act.

External assets of Fund.

24. The Fund shall consist of all or any of the following external assets:

• (a) gold in any form;

• (b) sterling and other foreign exchange in the form of—

  • (i) demand or time deposits with the Board’s agents or correspondents abroad;

  • (ii) documents and instruments customarily used for the making of payments or transfers in international transactions;

  • (iii) bank balances and money at call;

  • (iv) Treasury Bills;

  • (v) notes or coins;

• (c) securities of or guaranteed by foreign Governments or international financial institutions;

• (d) any readily available international drawing facility which the Board, after consultation with the International Monetary Fund and with the approval of the President, deems suitable for inclusion; and

• (e) any other asset which the Board, with the approval of the President, deems suitable for inclusion.

Currency Fund Income Account.

25. (1) All dividends, interest or other revenue derived from investments or from the utilisation in any other manner of the moneys of the Fund and all commissions paid to the Board in connection with the issue or redemption of currency notes or coins shall be paid into an account to be called “the Currency Fund Income Account” (hereinafter in this Act referred to as “the Income Account”).

(2) There shall be charged upon the Income Account—

• (a) all expenses incurred by or on behalf of the Board in the preparation, transport, issue, redemption and demonetisation of currency notes and coins, and in the transaction of any business relating to such currency authorised by law, other than the expenses referred to in subsection (6) of section 23 of this Act;

• (b) any expenses incurred by or on behalf of the Board in connection with the protection of the currency against forgery or counterfeiting of currency notes or coins; and

• (c) all other expenses properly incurred by the Board in the execution of its functions under this Act:

Provided that the Board may charge upon the Fund and not upon the Income Account any expenditure of an exceptional nature.

(3) At the end of each financial year, any surplus in the Income Account shall be paid into the Consolidated Fund but if on the last day in any financial year there is a deficiency in the Income Account, it shall be charged upon and paid out of the Consolidated Fund:

Provided that if on the last day in any financial year, the face value of the Board’s currency notes and coins in circulation exceeds the value of the Fund calculated in accordance with subsection (7) of section 23 of this Act, there shall be paid into the Fund the whole of the said surplus in the Income Account or such part thereof as shall make up the moneys of the Fund as aforesaid to an amount equal to the face value of the currency notes and coins then in circulation; but if the said surplus in the Income Account is insufficient to make up the deficiency in the Fund, the balance of such deficiency shall be charged upon and paid out of the Consolidated Fund.

(4) If on the last day in any financial year, the value of the Fund so calculated exceeds one hundred per cent of the face value of the Board’s currency notes and coins then in circulation, the Board may direct that the whole or part of such excess be transferred from the Fund to the Income Account.

Meeting of deficiencies in the Fund.

26. If the assets of the Fund should at any time prove insufficient to meet legal demands upon the Board, such deficiencies shall be charged upon and paid out of the Consolidated Fund.

Board of Survey.

27. Unissued stocks of currency notes and coins held by the Board shall on the first business day of each year and at such other times as may be decided by the Board, be verified by a Board of Survey to be constituted under regulations made by the Board.

Part IV. Miscellaneous

Board’s financial year.

28. The financial year of the Board shall begin on the 1st day of January and end on the 31st day of December of each year.

Audit.

29. The accounts of the Board shall be audited by the Auditor-General.

Annual accounts and report.

30. (1) The Board shall, as soon as practicable, after the close of its financial year, transmit to the President a copy of its annual accounts and report and the accounts shall then be published in the Gazette.

(2) The annual accounts and report shall be presented to Parliament as soon as may be after such publication.

(3) The Board shall, as soon as may be, after the end of every third month, make up and publish in the Gazette an abstract showing the whole amount of currency notes and coins in circulation on that day.

(4) The Board shall also publish at half yearly intervals in the Gazette an abstract showing—

• (a) the amount of the liquid portion of the Fund; and

• (b) the nominal value and price paid for and, where appropriate, the latest known market price, of the securities belonging to the Fund.

Regulations.

31. The Board may make such regulations as may be required from time to time for carrying into effect the provisions of this Act.

Part V. Transitional and Repeal

Preliminary acts and expenses.

32. Upon the coming into operation of this Act, any act done and preliminary expenses incurred by the Government in connection with the establishment of the Board, including the printing of notes and minting of coins to be issued by the Board, shall have the same effect and validity as if such acts had been validly done and such expenses validly incurred by the Board; and the Board may continue any act so commenced but remaining unfinished at the date of the coming into operation of this Act as if such act had been initiated by the Board.

Continued issue of the Commissioners’ coins.

33. Notwithstanding the provisions of section 14 of this Act the Board may for such period or periods as the Board may determine after the day on which the said section comes into operation, abstain from issuing its own coins or particular denominations thereof, and may enter into agreement with the Commissioners for the continued supply in Singapore of coins of the Commissioners in such denominations as may be required.

Rates of exchange between notes and coins of the Commissioners and of the Board.

34. (1) The notes and coins of the Commissioners which continue to be legal tender under subsection (3) of section 14 of this Act shall be exchanged for the notes and coins of the Board at the rates set out in the Schedule ⁵ to this Act.

(2) The President may, by order published in the Gazette, add to, amend or vary the rates of exchange set out in the Schedule to this Act.

Protection of the Board, the Commissioners and the employees thereof and of the Government and public officers.

35. No action, suit or other proceeding shall be brought or instituted in any court against, and no liability, claim or demand whatsoever shall lie against, the Board or any officer, servant or employee thereof, the Commissioners or any officer, servant or employee thereof, or the Government or any public officer in respect of any matter or thing authorised or permitted by the Currency (Amendment) Act, 1967, or any matter or thing arising under, resulting from or consequent on the passing or operation of the said Act.

Repeal and saving.

36. The Currency Ordinance, 1960, is hereby repealed, save that the provisions of the 1960 Currency Agreement, relating to the establishment of separate currency authorities shall continue to have the force of law in Singapore.

{The Schedule is omitted from this volume.}

Part I. Preliminary

Short title.

1. This Act may be cited as the Monetary Authority of Singapore Act.

Interpretation.

2. In this Act, unless the context otherwise requires—

“Authority” means the Monetary Authority of Singapore established under section 3 of this Act;

“bank” means a bank licensed under the Banking Act;

“board” means the board of directors of the Authority;

“director” means a director appointed under subsection (1) of section 8 of this Act and the chairman of the board, the deputy chairman and the Accountant-General;

“managing director” means a director appointed under subsection (1) of section 9 of this Act;

“Minister” means the Minister charged with the responsibility for finance.

Part II. Establishment, Capital and Administration of the Authority

Establishment of the Authority.

3.—(1) There shall be established an Authority to be called “the Monetary Authority of Singapore” which shall be a body corporate and shall have perpetual succession and may sue and be sued in its own name.

(2) The Authority shall have a common seal and such seal may, from time to time, be broken, changed, altered and made anew as to the Authority seems fit, and, until a seal is provided under this section, a stamp bearing the inscription “The Monetary Authority of Singapore” may be used as the common seal.

(3) All deeds, documents and other instruments requiring the seal of the Authority shall be sealed with the common seal of the Authority by the authority of the Authority in the presence of the managing director and of some other person duly authorised by the Authority to act in that behalf and shall be signed by the managing director and by such duly authorised person, and such signing shall be sufficient evidence that the common seal of the Authority has been duly and properly affixed and that the said seal is the lawful common seal of the Authority.

(4) The Authority may by resolution or otherwise appoint an officer of the Authority or any other agent either generally or in a particular case to execute or sign on behalf of the Authority any agreement or other instrument not under seal in relation to any matter coming within the powers of the Authority.

Principal objects of the Authority.

4. The principal objects of the Authority shall be—

• (a) to act as banker to, and financial agent of, the Government;

• (b) to promote, within the context of the general economic policy of the Government, monetary stability and credit and exchange conditions conducive to the growth of the economy; and

• (c) to exercise the powers and to perform the duties and functions that are transferred to the Authority under section 21 of this Act.

Authorised capital.

5.—(1) The authorised capital of the Authority shall be one hundred million dollars.

(2) On the establishment of the Authority such portion of the authorised capital as the Government may decide shall be subscribed and paid up by the Government.

(3) The paid-up portion of the authorised capital may be increased from time to time by such amount as the Government may approve.

(4) The payment of such increase in the authorised capital may be made by way of such transfers from the General Reserve Fund as the Government, in consultation with the board, may from time to time approve.

General Reserve Fund.

6.—(1) There shall be a General Reserve Fund of the Authority.

(2) At the end of each financial year, the net profit of the Authority for that year shall be determined after allowing for the expenses of operation and after provision has been made for bad and doubtful debts, depreciation in assets, contributions to staff and pension funds and such other contingencies as are usually provided for by banks.

(3) Subject to subsection (4) of this section, such part of the net profit of the Authority, as the board determines, shall be placed to the credit of the General Reserve Fund and the remainder shall be paid to the Government.

(4) Where at the end of a year the General Reserve Fund is—

• (a) less than half the paid-up capital of the Authority, the whole of the net profit shall be credited to the General Reserve Fund; and

• (b) not less than half the paid-up capital of the Authority but less than twice the paid-up capital of the Authority, not less than thirty per cent of the net profit shall be credited to the General Reserve Fund.

Board of directors.

7.—(1) There shall be a board of directors of the Authority which shall be responsible for the policy and general administration of the affairs and business of the Authority.

(2) The board shall, from time to time, inform the Government of the banking and credit policy of the Authority.

(3) The board shall consist of—

• (a) the Minister responsible for finance who shall be the chairman;

• (b) the Permanent Secretary (Economic Development), Ministry of Finance who shall be the deputy chairman;

• (c) the Accountant-General; and

• (d) four other directors appointed in accordance with sections 8 and 9 of this Act.

Appointment of directors.

8.—(1) The directors referred to in paragraph (d) of subsection (3) of section 7 of this Act shall be appointed by the President.

(2) The directors so appointed—

• (a) shall not act as delegates on the board from any commercial, financial, agricultural, industrial or other interests with which they may be connected;

• (b) shall hold office for a term not exceeding three years and shall be eligible for reappointment; and

• (c) may be paid by the Authority out of the funds of the Authority such remuneration and allowances as may be determined by the President.

(3) The provisions of paragraphs (b) and (c) of subsection (2) of this section do not apply to a director who is appointed managing director under section 9 of this Act.

Appointment of managing director.

9.—(1) The President shall, with the approval of the Public Service Commission, appoint one of the directors appointed under section 8 of this Act to be the managing director.

(2) The managing director shall be an employee of the Authority on such terms and conditions of service as the President may decide.

(3) The managing director shall be entrusted with the day-to-day administration of the Authority, and may, subject to this Act, make decisions and exercise all powers and do all acts which may be exercised or done by the Authority.

(4) The managing director shall be answerable to the board for his acts and decisions.

(5) In the event of the absence or inability to act of the managing director, the Minister may appoint a director to discharge his duties during the period of such absence or inability.

Disqualification of directors.

10.—(1) No person may be appointed as or remain a director of the Authority who is a director or salaried official of any bank licensed under the provisions of the Banking Act.

(2) The disqualification referred to in subsection (1) of this section does not apply to the directors referred to in paragraphs (b) and (c) of subsection (3) of section 7 of this Act.

(3) The President may terminate the appointment of any director appointed under subsection (1) of section 8 of this Act if he—

• (a) resigns his office;

• (b) becomes of unsound mind or incapable of carrying out his duties;

• (c) becomes bankrupt or suspends payment to or compounds with his creditors;

• (d) is convicted of an offence involving dishonesty or fraud or moral turpitude;

• (e) is guilty of serious misconduct in relation to his duties;

• (f) is absent, without leave, from three consecutive meetings of the board; or

• (g) fails to comply with his obligations under section 13 of this Act.

Vacancies in the office of director.

11. If any director appointed under subsection (1) of section 8 of this Act dies or resigns or otherwise vacates his office before the expiry of the term for which he has been appointed another person may be appointed by the President for the unexpired period of the term of office of the director in whose place he is appointed.

Meetings and decisions of the board.

12.—(1) The chairman of the board shall summon meetings as often as may be required but not less frequently than once in three months.

(2) At every meeting of the board a quorum shall consist of four directors, and decisions shall be adopted by a simple majority of the votes of the directors present and voting except that in the case of an equality of votes the chairman shall have a casting vote.

Director’s interest in contract to be made known.

13.—(1) A director who is directly or indirectly interested in a contract made, or proposed to be made, by the Authority shall disclose the nature of his interest at the first meeting of the board at which he is present after the relevant facts have come to his knowledge.

(2) A disclosure under subsection (1) of this section shall be recorded in the minutes of the board and, after the disclosure, the director—

• (a) shall not take part in any deliberation or decision of the board with respect to that contract; and

• (b) shall be disregarded for the purpose of constituting a quorum of the board for any such deliberation or decision.

(3) No act or proceeding of the board shall be questioned on the ground that a director has contravened the provisions of this section.

Preservation of secrecy.

14.—(1) Except for the purpose of the performance of his duties or the exercise of his functions or when lawfully required to do so by any court or under the provisions of any written law, no director, officer or employee of the Authority shall disclose to any person any information relating to the affairs of the Authority or of any person which he has acquired in the performance of his duties or the exercise of his functions.

(2) Any person who contravenes the provisions of subsection (1) of this section shall be guilty of an offence under this Act and shall be liable on conviction 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.

Remuneration not to be related to profits.

15. No salary, fee, wage or other remuneration or allowance paid by the Authority shall be computed by reference to the profits of the Authority.

Public servants.

16. The directors, including the managing director, and the officers and employees of the Authority of every description shall be deemed to be public servants within the meaning of the Penal Code.

Part III. Provisions Relating to Staff, Transfer of Functions, Employees and Assets, etc.

List of posts and appointment of employees.

17.—(1) The Authority may from time to time approve a list of posts which it thinks necessary for the purposes of this Act and may add to or amend that list. The first such list of posts shall contain posts for all the persons transferred to the service of the Authority under section 18 of this Act.

(2) No person may be employed by the Authority unless he holds a post appearing in the list of posts for the time being in force.

(2A) The Authority may, by notification in the Gazette, declare that appointments and promotions to such posts or classes of posts as it thinks fit, and the termination of appointment, dismissal, and disciplinary control of persons appointed to such posts, shall be vested in the Authority and, upon such notification, the Authority shall exercise such functions on the advice of the Public Service Commission.

(3) Subject to the provisions of this section—

• (a) appointments and promotions to all posts shall be made by the Authority; and

• (b) the termination of appointment, dismissal and disciplinary control of the employees of the Authority shall be vested in the Authority.

(4) [Repealed] ²

(5) Notwithstanding the provisions of this section, the Authority may appoint persons temporarily for a period not exceeding two months to posts in the list of posts for the time being in force.

(6) The Authority may make rules, not inconsistent with the provisions of this Act or of any other written law, for the appointment, promotion, disciplinary control and terms and conditions of service of all persons employed by the Authority.

(7) Without prejudice to the generality of subsection (6) of this section, the Authority shall prescribe the rates of remuneration payable to persons employed by the Authority, and no person so employed shall be paid otherwise than in accordance with such rates.

Transfer of employees.

18. Upon the coming into operation of this Act, such persons, as the Minister may decide, who were employed by the Government immediately prior to the date of the coming into operation of this Act and were exercising any of the powers or were discharging any of the functions or duties vested in the Authority by this Act, shall be deemed to be transferred to the service of the Authority on terms not less favourable than those they enjoyed immediately prior to their transfer and such terms (which shall be determined by the Authority) shall take into account the salaries and conditions of service including any accrued rights to leave, enjoyed by them while in the employment of the Government.

Pension schemes, provident fund, etc.

19.—(1) The Authority may, with the approval of the President, make rules for the establishment of a scheme or schemes for the payment of pensions, gratuities, provident fund or other superannuation benefits to such employees or classes of employees of the Authority as it may determine, or to their legal personal representatives or dependants, on the death or retirement of such employees from the service of the Authority or on their otherwise leaving the service of the Authority.

(2) The Authority in making under subsection (1) of this section any pension, provident fund or other superannuation rules which affect any persons transferred to the service of the Authority under section 18 of this Act shall in such rules provide for the payment to such persons or their dependants of benefits not less in value than the amount of any pension, provident fund, gratuity or allowance for which such persons would have been eligible under the Pensions Act had they continued in the service of the Government and any such pension, provident fund or superannuation rules relating to length of service of persons shall provide for the recognition as service under the Authority by persons so transferred of service by them under the Government.

(3) Nothing in the rules to be made under subsection (1) of this section shall adversely affect any conditions that would have been applicable to persons transferred to the service of the Authority from their service with the Government as regards any pension, gratuity or allowance under the Pensions Act.

(4) Where any person in the service of the Authority whose case does not come within the scope and effect of any pension or other schemes established under this section retires or dies in the service of the Authority or is discharged from such service, the Authority may grant to him or to such other person or persons wholly or partly dependent on him, as the Authority may think fit, such allowance or gratuity as the Authority may determine.

No entitlement in respect of abolition or reorganization of office.

20. Notwithstanding the provisions of the Pensions Act, no person who is transferred to the service of the Authority under section 18 of this Act shall be entitled to claim any benefits under this Act on the ground that he has been retired from the service of the Government on account of abolition or reorganization of office.

Transfer of functions, powers, duties, assets and liabilities, etc., to the Authority.

21.—(1) Upon the coming into operation of this Act, there shall be transferred to the Authority—

• (a) all the functions, duties and powers of the Minister for Finance, the Commissioner of Banking and the Accountant-General under the Banking Act;

• (b) all the functions, duties and powers of the Minister for Finance, the Commissioner for Finance Companies and the Accountant-General under the Finance Companies Act; and

• (c) the functions, duties and powers of the Minister for Finance and the Controller of Foreign Exchange under the Exchange Control Act.

(2) After the coming into operation of this Act, there shall be transferred to the Authority such other functions, duties and powers as are conferred by or in pursuance of any written law upon the Minister or any public officer as the President may, from time to time, by notification in the Gazette, specify.

(3) Upon or after the coming into operation of this Act, such movable property, assets, rights, interests and privileges as well as such debts, liabilities and obligations connected therewith or appertaining thereto which are related to finance and are vested in or conferred upon the Minister pursuant to any written law, as the President may by notification in the Gazette specify, shall be deemed to have been transferred to and vested in the Authority without further assurance.

(4) Where in any written law or any document whatsoever there is a reference to the Minister for Finance, the Commissioner of Banking, the Commissioner for Finance Companies, Commissioner of Chit Funds, the Accountant-General or the Controller of Foreign Exchange in connection with or related to the performance of any of the functions, duties and powers that are transferred to the Authority under subsection (1) or (2) of this section the written law or document shall have effect as if the Authority had originally been referred to in the written law or document instead of the Minister for Finance, the Commissioner of Banking, the Commissioner for Finance Companies, Commissioner of Chit Funds, the Accountant-General or the Controller of Foreign Exchange, as the case may be.

(5) The Minister shall have power to do all acts or things that he considers necessary or expedient to give effect to the provisions of subsections (1), (2) and (3) of this section.

(6) If any question arises as to whether—

• (a) any of the functions, duties and powers; or

• (b) any movable property, assets, rights, interests, privileges, debts, liabilities and obligations,

have been transferred to or vested in the Authority under subsections (1), (2) and (3) of this section, a certificate under the hand of the President shall be conclusive evidence of such transfer or vesting.

Part IV. Powers, Duties and Functions of the Authority

Powers, duties and functions of the Authority.

22. The Authority may, in addition to the powers, duties and functions transferred to it by virtue of section 21 of this Act, exercise and discharge the following powers, duties and functions, that is to say, it may—

• (a) accept deposits of money;

• (b) issue demand drafts and other kinds of remittances made payable at its own office or the offices of agencies or correspondents;

• (c) purchase, accept on deposit and sell gold coin or bullion;

• (d) purchase, sell, discount and rediscount Treasury bills of the Government;

• (e) purchase and sell securities of the Government or of any public authority which have been publicly offered for sale or form part of an issue which is being made to the public at the time of acquisition;

• (f) purchase, sell, discount and rediscount bills of exchange and promissory notes arising out of bona fide commercial transactions bearing two or more good signatures and maturing within three months (exclusive of days of grace) from the date of acquisition;

• (g) grant advances to such financial institutions or class of financial institutions as the Authority may from time to time approve for periods not exceeding three months against—

  • (i) Treasury bills of the Government and securities of the Government;

  • (ii) gold coin or bullion;

  • (iii) such bills of exchange and promissory notes as are eligible for purchase, discount or rediscount by the Authority up to seventy-five per cent of their nominal value;

  • (iv) warehouse warrants or their equivalent (securing possession of goods), in respect of goods duly insured and with a letter of hypothecation from the owner:

  Provided that no such advance shall exceed sixty per cent of the current market value of the goods in question;

• (h) invest in securities of the Government or of any public authority for any amount, and to mature at any time on behalf of staff and pension funds and other internal funds of the Authority;

• (i) acquire, hold and sell shares of any corporation set up with the approval of, or under the authority of, the Government for the purpose of promoting the development of a money market or securities market in Singapore or for the financing of economic development in Singapore;

• (j) purchase and sell currency, and purchase, sell, discount and rediscount bills of exchange and Treasury bills drawn in or on places outside Singapore;

• (k) borrow money, establish credits and give guarantees in any currency, inside and outside Singapore, on such terms and conditions as it may deem fit;

• (l) maintain accounts with central banks outside Singapore and with other banks inside and outside Singapore;

• (m) purchase and sell securities of, or guaranteed by, such guarantor, governments or international financial institutions as may be approved by the board, or purchase and sell securities and investments authorised by the President on the recommendation of the board;

• (n) act as correspondent, banker or agent for any central bank or other monetary authority and for any international bank or international monetary authority established under governmental auspices;

• (o) open accounts for, and accept deposits from, the Government, public authorities, banks and other credit institutions in Singapore;

• (p) underwrite loans in which it may invest;

• (q) undertake the issue and management of loans publicly issued by

• (r) the Government or by any public authority; and (r) do generally all such things as may be commonly done by bankers and are not inconsistent with the exercise of its powers or the discharge of its duties under this Act.

Investment of funds.

23. The funds of the Authority may be invested in all or any of the following:—

• (a) gold coin or bullion;

• (b) notes, coin, bank balances and money at call in such country or countries as may be approved by the board;

• (c) Treasury bills of such government or governments as may be approved by the board;

• (d) securities of, or guaranteed by, such government or governments or international financial institutions as may be approved by the board;

• (e) such securities and investments as may be authorised by the President on the recommendation of the board.

Authority as a banker to, and financial agent of, the Government and manager of its external assets.

24.—(1) The Authority shall act as a banker to, and a financial agent of, the Government.

(2) Whenever the Authority receives and disburses Government moneys it shall keep account thereof and may be paid an agency fee for its services.

(3) The Authority may act generally as agent for the Government on such terms and conditions as may be agreed between the Authority and the Government, where the Authority can do so appropriately and consistently with the provisions of this Act and with its duties and functions as a monetary authority.

(4) The Authority shall, subject to the provisions of the Financial Procedure Act and any other written law, manage the external assets of the Government.

Special loans to banks and financial institutions.

24A. The Authority may, if it thinks such action is necessary to safeguard monetary stability, make a loan or advance to a bank carrying on business under the Banking Act or to such financial institutions or class of financial institutions as the Authority may from time to time approve against such form of security as the Authority may consider sufficient.

Power to issue directions to financial institutions.

24B.—(1) The Authority may, if it thinks it necessary in the public interest, request information from and make recommendations to such financial institutions as the Authority may from time to time approve and may issue directions for the purpose of securing that effect is given to any such request or recommendation.

(2) Before issuing any direction under subsection (1) of this section the financial institution or financial institutions concerned shall, unless the Authority in respect of any particular direction decides that it is not practicable or desirable, be given an opportunity to make representations with regard to the proposed direction within such time as the Authority shall specify.

(3) Upon receipt of any representations referred to in subsection (2) of this section the Authority shall consider them and, may—

• (a) reject such representations; or

• (b) amend or modify the proposed direction in accordance with the representations, or otherwise,

and in either event, it shall thereupon issue a direction in writing, to such financial institution or financial institutions, as the case may be, requiring that effect be given to the proposed direction or to the proposed direction as subsequently amended or modified by it within a reasonable time, and the financial institution or financial institutions, as the case may be, shall comply with such direction.

(4) Any financial institution that fails or refuses to comply with a direction given under this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five thousand dollars.

Agents.

25. In the exercise of its powers and the performance of its functions under this Act the Authority may—

• (a) establish agencies at such places outside Singapore as it thinks fit;

• (b) arrange with and authorise a person to act as agent of the Authority outside Singapore;

• (c) act as agent of a bank carrying on business inside or outside Singapore; and

• (d) act as agent of any public authority either generally or for a particular purpose inside or outside Singapore.

Part V. Miscellaneous

Statistics.

26.—(1) The Authority may at any time for the purpose of carrying out its functions under this Act request such persons or classes of persons as it may decide to collect and furnish such statistical information as the Authority may specify and those persons or classes of persons shall comply with that request.

(2) Statistical information received from the persons or classes of persons referred to in subsection (1) of this section shall be regarded as secret between them and the Authority.

(3) Any person who fails to comply with a request of the Authority under subsection (1) of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five hundred dollars.

Authority’s financial year.

27. The financial year of the Authority shall begin on the 1st day of April and end on the 31st day of March of each year, except that for the year 1970 the financial year shall begin on the date of the establishment of the Authority and shall end on the 31st day of March 1971.

Audit.

28. The accounts of the Authority shall be audited by the Auditor-General.

Preparation and publication of annual accounts and annual report.

29.—(1) The Authority shall within six months from the close of its financial year—

• (a) transmit to the President a copy of the annual accounts certified by the Auditor-General, and those accounts shall then be published in the Gazette; and

• (b) transmit to the President a report by the board on the working of the Authority throughout the year and that report shall be published by the Authority.

(2) The Authority shall cause the annual accounts and the annual report to be presented as soon as may be to Parliament.

Borrowing from Authority by officers and employees.

30. The Authority shall not lend money to an officer or employee of the Authority, except—

• (a) for the purchase, erection, alteration, renovation or enlargement of a house in which he resides or intends to reside;

• (b) to discharge a mortgage or encumbrance on such a house; or

• (c) for the purchase of a vehicle.

Power to appoint attorney.

31. The Authority may, by instrument under its common seal, appoint a person (whether in Singapore or in a place outside Singapore) to be its attorney, and the person so appointed may, subject to the instrument, do any act or execute any power or function which he is authorised by the instrument to do or execute.

Exemption from taxes, fees and levies.

32. The Authority shall not be subject to any tax, fee or levy whatsoever.

Validity of acts and transactions of Authority.

33. The validity of an act or transaction of the Authority shall not be called in question in any court on the ground that any provision of this Act has not been complied with.

Guarantee by Government.

34. The Government shall be responsible for the payment of all moneys due by the Authority but nothing in this section authorises a creditor or other person claiming against the Authority to sue the Government in respect of his claim.

Fiat of Attorney-General.

35. No prosecution in respect of any offence under this Act shall be instituted without the consent in writing of the Attorney-General.

Jurisdiction.

36. Notwithstanding the provisions of any other written law, a District Court has jurisdiction to try all offences under this Act and to impose the full penalty prescribed therefor.

Power of Authority to make regulations.

37. The Authority may, with the approval of the President, make regulations for the better carrying out of the objects and purposes of this Act.

Preliminary acts and expenses.

38. Notwithstanding the provisions of section 1 of this Act, the Minister may at any time before the date of the coming into operation of Part II of this Act do all such acts and incur all such expenses as he may consider necessary in connection with the establishment of the Authority; and upon that date all such acts and expenses shall be deemed to have been done and incurred by the board.

Operation of Act not to affect the Currency Act.

39. Nothing in this Act affects the operation of the Currency Act.

Part VI. Transitional

Transitional provisions.

40.—(1) Any fund, scheme, contract, document, licence, permission or resolution constituted, prepared, made, granted or approved under the Exchange Control Act, the Finance Companies Act, the Banking Act or any other written law relating to such functions, powers and duties as are transferred to the Authority under this Act, shall, except where otherwise expressly provided in this Act or in any other written law, continue and be deemed to have been constituted, prepared, made, granted or approved, as the case may be, under this Act.

(2) Any legal proceeding or cause of action pending or existing immediately before the commencement of this Act by or against the Government in respect of any functions or assets which under and by virtue of this Act are transferred to, or vested in, the Authority, may be continued and enforced by or against the Authority as it might have been by or against the Government, as the case may be, had this Act not come into operation.

Part I. Preliminary

Short title.

1. This Act may be cited as the Banking Act.

Interpretation.

2.—(1) In this Act, unless the context otherwise requires—

“the Authority” means the Monetary Authority of Singapore as established under section 3 of the Monetary Authority of Singapore Act; ²

“bank” means any company which carries on banking business and holds a valid licence granted under section 7 or 72 of this Act. All branches and offices in Singapore of such a company shall be deemed to be one bank for the purposes of this Act;

“banking business” means the business of receiving money on current or deposit account, paying and collecting cheques drawn by or paid in by customers, the making of advances to customers, and includes such other business as the Authority may prescribe for the purposes of this Act;

“company” means any company defined in any written law for the time being in force relating to companies, any company formed in pursuance of any Royal Charter or Letters Patent, and any company incorporated or registered under any written law in force in Singapore and includes any company incorporated outside Singapore which has complied with the provisions of any written law for the time being in force relating to companies;

“director” includes any person occupying the position of director of a corporation by whatever name called and includes a person in accordance with whose directions or instructions the directors of a corporation are accustomed to act and an alternate or substitute director;

“licence” means a licence granted under section 7 or 72 of this Act;

“place of business” in relation to a bank includes a mobile branch of the bank and a branch established and maintained for a limited period only;

“published reserves” means reserves which appear in the accounts of the bank but does not include any reserves which are represented by the writing down of the value of assets or by provision for the depreciation of fixed assets or which are maintained for any specific purposes;

“savings account liabilities” in relation to a bank means the total deposits at that bank which normally require the presentation of passbooks for the deposit or withdrawal of moneys;

“sight liabilities” in relation to a bank means the total deposits at that bank which are repayable on demand, but does not include savings account liabilities or the deposits of any other bank at that bank;

“time liabilities” in relation to a bank means the total deposits at that bank which are repayable otherwise than on demand, but does not include savings account liabilities or the deposits of any other bank at that bank.

(2) Without prejudice to any other meaning which the word “insolvent” may have, a bank shall, for the purposes of this Act, be deemed to be insolvent if either it has ceased to pay its debts in the ordinary course of business or is unable to pay its debts as they become due.

(3) For the purposes of sections 10, 25, 27 and 28 of this Act “capital funds” means—

• (a) in the case of a bank whose head office is situated in Singapore—the paid-up capital and published reserves of that bank; and

• (b) in the case of a bank whose head office is situated outside Singapore—the net head office funds and such other liabilities as the Authority may decide.

Part II. Appointment of Assistants

Appointment of assistants.

3.—(1) The Authority may authorize or appoint any person to assist it in the exercise of its functions and duties under this Act, either generally or in any particular case.

(2) The members of the Authority and any person appointed by it pursuant to subsection (1) of this section shall be deemed to be public servants within the meaning of the Penal Code.

Part III. Licensing of Banks

Licensing of banks.

4.—(1) No banking business shall be transacted in Singapore except by a company which is in possession of a valid licence granted under this Act by the Authority authorizing it to conduct banking business in Singapore.

(2) Any person who contravenes the provisions of subsection (1) of this section shall be guilty of an offence under this Act and shall be liable on conviction 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 and in the case of a continuing offence to a further fine of one thousand dollars for every day during which the offence continues after conviction.

Use of word “bank”.

5.—(1) No person or body of persons, whether incorporated or not, other than a bank shall, without the written consent of the Authority, use the word “bank” or any of its derivatives in any language, or any other word indicating it transacts banking business, in the name, description or title under which the person or body of persons is transacting business in Singapore or make or continue to make any representation to such effect in any bill head, letter paper, notice, advertisement or in any other manner whatsoever:

Provided that nothing in this section prohibits an association of banks formed for the protection of common interests from using the word “bank” or any of its derivatives in any language as a part of its name or description of its activities.

(2) Any person or body of persons whether incorporated or not who contravenes the provisions of subsection (1) of this section shall be guilty of an offence under this Act and shall be liable on conviction to imprisonment for a term not exceeding one year or to a fine not exceeding one thousand dollars or to both such imprisonment and fine and in the case of a continuing offence to a further fine of two hundred and fifty dollars for every day during which the offence continues after conviction.

Examination of persons suspected of transacting banking business.

6. Whenever the Authority has reason to believe that a person is transacting banking business without a licence, it shall have the power to examine the books, accounts and records of that person in order to ascertain whether or not that person has violated or is violating any provisions of this Act, and any refusal to submit such books, accounts and records shall be prima facie evidence of the fact of operation without a licence.

Application for licence.

7.—(1) A company which desires authority to carry on banking business in Singapore shall apply in writing to the Authority for a licence under this section and shall supply—

• (a) a copy of the memorandum of association and articles of association or other instrument under which the company is incorporated, duly verified by a statutory declaration made by a senior officer of the company;

• (b) a copy of the latest balance-sheet of the company; and

• (c) such other information as may be called for by the Authority.

(2) Upon receiving an application under subsection (1) of this section, the Authority shall consider the application and may, subject to the provisions of section 9 of this Act, grant a licence, with or without conditions, or refuse a licence.

(3) The Authority may at any time vary or revoke any existing conditions of a licence or impose conditions or additional conditions thereto.

(4) The Authority shall, prior to any action under subsection (3) of this section, notify its intention to take such action to the bank concerned and shall give the bank an opportunity to submit reasons why the conditions of its licence should not be so varied or revoked.

(5) Where a licence is subject to conditions the bank shall comply with those conditions.

(6) Any bank which fails to comply with any of the conditions of its licence shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five thousand dollars and in the case of a continuing offence to a further fine of one thousand dollars for every day during which the offence continues after conviction.

Licence fees.

8.—(1) Every bank in Singapore shall pay such annual licence fee as the Authority may by notification in the Gazette prescribe.

(2) The Authority may prescribe different licence fees in respect of different classes or categories of banks and such fees shall apply uniformly to such classes or categories.

(3) The manner of payment of the licence fee shall be as specified by the Authority.

Minimum capital requirements.

9.—(1) Subject to the provisions of this Act, a bank shall not be granted or hold a licence unless—

• (a) in the case of a bank whose head office is situated in Singapore, its capital issued and paid up is not less than three million Singapore dollars deduction having been made in respect of a debit balance, if any, appearing in the profit and loss account of the bank; and

• (b) in the case of a bank whose head office is situated outside Singapore—

  • (i) its capital issued and paid up is not less than the equivalent of six million Singapore dollars deduction having been made in respect of a debit balance, if any, appearing in the profit and loss account of the bank; and

  • (ii) it holds net head office funds of not less than three million Singapore dollars in Singapore in respect of its business in Singapore, at all times, in the form of assets approved by the Authority.

(2) A bank incorporated in Singapore shall not reduce its paid-up capital during the currency of its licence without the approval of the Authority.

Capital funds.

10.—(1) The Authority may require banks to maintain capital funds in Singapore in proportion to their total assets or to every category of assets at such ratio or ratios as may from time to time be prescribed.

(2) Any bank which fails to comply with the requirements of the Authority under the provisions of subsection (1) of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five thousand dollars and in the case of a continuing offence to a further fine of one thousand dollars for every day during which the offence continues after conviction.

Foreign government-owned banks.

11. A bank shall not be granted or hold a licence if the Authority is satisfied that fifty per cent or more of its capital issued and paid up is owned by or on behalf of the government of any country other than Singapore or of an agency of any such government, or that all or a majority of the persons having the direction, control or management of the bank are appointed by or on behalf of any such government or agency:

Provided that the Authority may, in its absolute discretion, grant a licence to any such bank for such period or periods not exceeding one year at any one time as it may think fit.

Branches.

12.—(1) No bank shall open a new place of business or change the location of an existing place of business in Singapore without submitting a written application in respect thereof to the Authority, which may—

• (a) give its approval; or

• (b) without assigning any reason therefor, refuse to give its approval.

(2) No bank incorporated in Singapore shall open a new branch, agency or office in any place outside Singapore without submitting a written application in respect thereof to the Authority, which shall approve or reject the application.

(3) Any bank which contravenes the provisions of subsection (1) or (3) ³ of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five hundred dollars and in the case of a continuing offence to a further fine of one hundred dollars for every day during which the offence continues after conviction.

Fees to be paid in respect of branches of banks.

13.—(1) The Authority may from time to time by notification in the Gazette specify the annual licence fees which banks in Singapore shall pay for each of their branches.

(2) The manner of payment shall be as specified by the Authority.

Mergers.

14.—(1) A bank incorporated in Singapore shall not after the coming into operation of this Act be merged or consolidated with or be taken over by any other bank or banks or their subsidiaries or related companies as described in section 6 of the Companies Act or acquire an interest exceeding twenty per cent of the voting share capital of any other bank without application to, and approval by, the Authority.

(2) In considering such an application the Authority shall have power to call for such information as it may require.

Amendment of bank’s constitution.

15.—(1) Every bank incorporated in Singapore shall, prior to the making of any amendment or alteration in the memorandum of association and articles of association or other instrument under which it is incorporated, furnish to the Authority particulars in writing of the proposed amendment.

(2) Every bank whether incorporated inside or outside Singapore 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 Authority particulars in writing (verified by a statutory declaration made by a senior officer of the bank) of the alteration.

(3) Any bank which contravenes the provisions of subsection (1) or (2) of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five hundred dollars.

Revocation of licence.

16.—(1) The Authority may by order revoke a licence issued under this Act—

• (a) if it is satisfied that the bank holding that licence—

  • (i) has ceased to transact banking business in Singapore;

  • (ii) proposes to make, or has made, any composition or arrangement with its creditors or has gone into liquidation or has been wound up or otherwise dissolved;

  • (iii) is carrying on its business in a manner likely to be detrimental to the interests of the depositors of the bank or has insufficient assets to cover its liabilities to its depositors or the public;

  • (iv) is contravening the provisions of this Act; or

  • (v) has been convicted of any offence under this Act or any of its officers holding a managerial or executive position has been convicted of any offence under this Act; or

• (b) if, upon taking action under subsection (2) of section 44 of this Act, it considers that it is in the public interest to revoke the licence.

(2) The Authority shall before revoking any licence under the provisions of subsection (1) of this section cause to be given to the bank concerned notice in writing of its intention to do so, specifying a date, not less than twenty-one days after the date of the notice, upon which the revocation will take effect and calling upon the bank to show cause to the Authority why the licence should not be revoked.

(3) When the Authority has revoked a licence under the provisions of subsection (1) of this section it shall forthwith inform the bank of the revocation.

(4) Any bank whose licence has been revoked pursuant to the provisions of this section shall have a right of appeal to the High Court against the order of revocation.

(5) An order of revocation made by the Minister shall not take effect until the expiration of a period of twenty-one days after the Commissioner has informed the bank of such order.

(6) If within such period the bank concerned gives due notice of appeal to the High Court such order shall not take effect unless the order is confirmed by the Court or the appeal is for any reason dismissed by that Court.

(7) The making of an appeal by a bank under this section shall in no way affect the exercise of the powers of the Minister and the Commissioner in relation to that bank under sections 44, 45, 46, 47 and 48 of this Act.

Effect of revocation of licence.

17.—(1) Where an order of revocation becomes effective under section 16 of this Act—

• (a) notice of such revocation shall be published in the Gazette; and

• (b) the bank shall, as from the date of such notice, cease to transact any banking business in Singapore except as may be approved by the Commissioner for the purpose of winding up its banking business.

(2) The provisions of paragraph (b) of subsection (1) of this section shall not prejudice the enforcement by any person of any right or claim against the bank or by the bank of any right or claim against any person.

Part IV. Reserve Funds, Dividends, Balance-Sheets and Information

18.—(1) Every licensed bank—

Maintenance of reserve fund.

• (a) shall maintain a reserve fund; and

• (b) shall transfer to such reserve fund out of the net profits of each year, after due provision has been made for taxation—

  • (i) so long as the amount of the reserve fund is less than fifty per centum of the paid-up capital, a sum not less than fifty per centum of such net profits;

  • (ii) so long as the amount of the reserve fund is fifty per cent but less than one hundred per cent of the paid-up capital, a sum not less than twenty-five per cent of those net profits; and

  • (iii) so long as the amount of the reserve fund is one hundred per cent or more of the paid-up capital, a sum not less than five per cent of those net profits.

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

(3) Any bank which fails to comply with the provisions of subsection (1) of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding ten thousand dollars.

Maintenance of adequate provision for bad and doubtful debts.

19. Every bank shall make provision for bad and doubtful debts and before any profit or loss is declared ensure that that provision is adequate.

Dividends.

20. A bank shall not pay any dividend on its shares until all its capitalized expenditure (including preliminary expenses, organization expenses, share selling commission, brokerage, amount of losses and any item of expenditure not represented by tangible assets) has been completely written off.

Publication and exhibition of audited balance-sheet.

21.—(1) Every bank shall, within six months after the close of each financial year or within such period as the Authority may approve, publish in at least four local daily newspapers, one each published in the Malay, Chinese, Tamil and English languages, and exhibit thereafter throughout the year in a conspicuous position in each of its offices and branches in Singapore—

• (a) a copy of its latest audited annual balance-sheet, and a copy of the profit and loss account, together with any notes thereon, and a copy of the report of the auditors:

  • Provided that in the case of a bank incorporated outside Singapore, the abovementioned statements may be made in a manner that complies with the law for the time being applicable in the place of its incorporation or origin;

• (b) the full and correct names of all persons who are directors for the time being of the bank; and

• (c) the names of all subsidiary companies for the time being of the bank.

(2) A copy of each of the documents referred to in subsection (1) of this section shall be sent to the Authority by the bank, prior to the first publication thereof under that subsection, together with a copy of the directors’ report.

(3) In addition to the balance-sheet and other documents required to be lodged with the Authority under subsection (2) of this section, every bank shall lodge with the Authority with that balance-sheet and other documents a duly audited balance-sheet showing its assets used in, and liabilities arising out of its operation in, Singapore as at the date to which its balance-sheet was made up and a duly audited profit and loss account which gives a true and fair view of the profit or loss arising out of the bank’s operation in Singapore for the last preceding financial year of the bank:

Provided that the bank shall be entitled to make such apportionments of expenses incurred in connection with operations or administration affecting both Singapore and elsewhere and to add such notes and explanations as in its opinion are necessary or desirable in order to give a true and fair view of the profit or loss of its operations in Singapore.

(4) The Authority may, in its absolute discretion, regard the balance-sheet and profit and loss account as having been duly audited for the purpose of subsection (3) of this section if the balance-sheet and profit and loss account are accompanied by a report by an approved auditor which complies, insofar as it is practicable, with the provisions of section 174 of the Companies Act.

(5) In the case of a bank incorporated in Singapore the annual balance-sheet and profit and loss account of the bank referred to in subsection (1) of this section and the balance-sheet and profit and loss account referred to in subsection (3) of this section shall be in such form as the Authority may approve; in the case of a bank incorporated outside Singapore only the balance-sheet and profit and loss account referred to in subsection (3) of this section shall be in such form as the Authority may approve.

(6) The Authority may require any bank to submit such further or additional information as it may deem necessary either by way of explanation, amplification or otherwise with regard to the balance-sheets and profit and loss accounts sent by that bank under subsections (2) and (3) of this section and that information shall be submitted within such period and in such manner as the Authority may require.

(7) Any bank which fails to comply with the provisions of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five hundred dollars and in the case of a continuing offence to a further fine of one hundred dollars for every day during which the offence continues after conviction.

Information to be furnished by banks.

22.—(1) Every bank shall furnish to the Authority at such time and in such manner as the Authority may prescribe, all such information as the Authority may reasonably require for the proper discharge of its functions.

(2) Every bank shall send to the Authority and the Chief Statistician—

• (a) not later than fifteen days after the last day of each month a statement in the form set out in the First Schedule ⁴ to this Act showing the assets and liabilities of its banking offices and branches in Singapore at the close of business on the last business day of the preceding month;

• (b) not later than one month after the last day of each quarter of a calendar year, a statement in the form set out in the Second Schedule ⁴ to this Act giving an analysis of loans and advances of its banking offices and branches in Singapore as at the 31st day of March, 30th day of June, 30th day of September and the 31st day of December, respectively; and

• (c) not later than six months after the close of its financial year a statement in the form set out in the Third Schedule ⁴ to this Act showing the income and expenditure in respect of its banking business in Singapore.

(3) The Authority may vary or amend the forms set out in the First, Second and Third Schedules to this Act.

(4) The Authority may require any statement submitted to it pursuant to subsections (1) and (2) of this section to be accompanied by a certificate—

• (a) of the auditor appointed by the bank pursuant to subsection (1) of section 53 of this Act; or

• (b) of any other auditor appointed by the Authority pursuant to subsection (2) of section 53 of this Act,

as to whether in the opinion of the auditor, the statement or information is correct.

(5) Any information received from a bank under this section shall be regarded as secret between that bank, the Authority and the Chief Statistician.

(6) Nothing in this section shall prevent the Chief Statistician or the Authority from preparing and publishing consolidated statements aggregating such information as may be furnished under this section.

(7) Any bank which fails or neglects to furnish any information required by the Authority or the Chief Statistician under the provisions of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five thousand dollars and in the case of a continuing offence to a further fine of one thousand dollars for every day during which the offence continues after conviction.

Action to be taken if advances are against the interests of depositors.

23.—(1) Every bank shall send to the Authority not later than fifteen days after the last day of each month a statement in the form to be prescribed by the Authority showing particulars of all advances, loans or credit facilities granted by it to—

• (a) any of its directors;

• (b) any firm in which it or any of its directors is a partner, manager or agent, or to any individual or firm of whom or of which any of its directors is a guarantor;

• (c) any corporation that is deemed to be related to the bank as described in section 6 of the Companies Act;

• (d) any of its officers, employees or other persons being persons receiving remuneration from it in excess of one year’s remuneration of the officer, employee or person;

• (e) any private or public company in which it or any of its directors, officers, employees or other persons who receive remuneration from the company has an interest as a director, manager, agent or guarantor; or

• (f) any individual in whom, and any firm or company in which, any of its directors has an interest, directly or indirectly, as declared under the provisions of section 24 of this Act other than such advances, loans and credit facilities, particulars of which have already been supplied pursuant to paragraphs (a) to (e) of this subsection.

(2) If on examination of the particulars supplied by a bank under subsection (1) of this section it appears to the Authority that any such advances, loans or credit facilities are being granted to the detriment of the interests of the depositors of that bank, the Authority may by order in writing prohibit that bank from granting any further advances, loans or credit facilities or impose such restrictions on the grant thereof as the Authority thinks fit, and may further direct that bank to secure repayment of any such first-mentioned advances, loans or credit facilities within such time and to such extent as may be specified in the order.

Disclosure of interest by directors.

24.—(1) Every director of a bank who has in any manner whatsoever, whether directly or indirectly, an interest in an advance, loan or credit facility or proposed advance, loan or credit facility from that bank shall as soon as practicable declare the nature of his interest to the board of directors of that bank and the secretary of that bank shall cause such declaration to be circulated forthwith to all the directors.

(2) The requirements of subsection (1) of this section do not apply in any case where the interest of the director consists only of being a member or creditor of a company which is interested in an advance, loan or credit facility or proposed advance, loan or credit facility from that bank if the interest of the director may properly be regarded as of a trivial nature.

(3) For the purposes of subsection (1) of this section, a general notice given to the board of directors of a bank by a director to the effect that he is an officer or member of a specified company or a member of a specified firm and he is to be regarded as having an interest in any advance, loan or credit facility which may, after the date of the notice, be made to that company or firm shall be deemed to be a sufficient declaration of interest in relation to any advance, loan or credit facility so made if—

• (a) it specifies the nature and extent of his interest in the particular company or firm;

• (b) his interest is not different in nature or greater in extent than the nature and extent so specified in the notice at the time any advance, loan or credit facility is made; and

• (c) it is given at the meeting of the directors or the director takes reasonable steps to ensure that it is brought up and read at the next meeting of the directors after it is given.

(4) Every director of a bank who holds any office or possesses any property whereby, whether directly or indirectly, duties or interest might be created in conflict with his duties or interest as director shall declare at a meeting of the directors of that bank the fact and the nature, character and extent of the conflict.

(5) The declaration referred to in subsection (4) of this section shall be made at the first meeting of the directors held—

• (a) after he becomes a director of the bank; or

• (b) if already a director, after he commences to hold the office or to possess the property, as the case may be.

(6) The secretary of that bank shall cause to be brought up and read any declaration made under subsection (1) or (4) of this section at the next meeting of the directors after it is given, and shall record any declaration made under this section in the minutes of the meeting at which it was made or at which it was brought up and read.

(7) Any director who acts in contravention of subsection (1) or (4) of this section shall be guilty of an offence under this Act and shall be liable on conviction 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.

Part V. Prohibited Business

Advances, credits and guarantees.

25.—(1) A bank shall not—

• (a) grant or permit to be outstanding to any customer any advances, loans or credit facilities or give any financial guarantees or incur any other liabilities on his behalf to an aggregate amount of such advances, loans, facilities, guarantees or liabilities in excess of sixty per cent of the capital funds or, with the approval of the Authority, up to but not in excess of one hundred per cent of the capital funds of the bank:

  Provided that the provisions of this paragraph do not apply to—

  • (i) transactions with the Government;

  • (ii) transactions between banks;

  • (iii) the purchase of telegraphic transfers or loans or advances made against telegraphic transfers;

  • (iv) any facilities granted against letters of credit or bills or guarantees or documents in respect of imports into or exports from Singapore; or

  • (v) any other type of transactions which the Authority may from time to time approve;

• (b) grant any advance or credit facility against the security of its own shares;

• (c) grant unsecured advances, unsecured loans or unsecured credit facilities which in the aggregate and outstanding at any one time exceed the sum of five thousand Singapore dollars—

  • (i) to any of its directors, whether those advances, loans or credit facilities are obtained by its directors jointly or severally;

  • (ii) to a firm in which it or any of its directors has an interest as a partner, manager or agent, or to any individual or firm of whom or of which any of its directors is a guarantor; or

  • (iii) to any corporation, other than a bank, that is deemed to be related to the bank as described in section 6 of the Companies Act; or

• (d) grant to any of its officers, other than a director, or its employees or other persons, being persons receiving remuneration from a bank (other than public, registered or licensed accountants, advocates and solicitors, architects, estate agents, doctors and any other persons receiving remuneration from a bank in respect of their professional services) unsecured advances, unsecured loans or unsecured credit facilities which in the aggregate and outstanding at any one time exceed one year’s emolument of that officer or employee or person.

(2) In paragraphs (c) and (d) of subsection (1) of this section, the expression “unsecured advances, unsecured loans or unsecured credit facilities” means advances, loans or credit facilities made without security, or in respect of any advance, loan or credit facility made with security, any part thereof which at any time exceeds the market value of the assets constituting that security, or where the Authority is satisfied that there is no established market value, on the basis of a valuation approved by it.

(3) In paragraph (c) of subsection (1) of this section, the expression “director” includes the wife, husband, father, mother, son or daughter of a director.

(4) All the directors of the bank shall be liable jointly and severally to indemnify the bank against any loss arising from the making of any unsecured advance, unsecured loan or unsecured credit facility under sub-paragraphs (i), (ii) and (iii) of paragraph (c) of subsection (1) of this section.

(5) Any bank which contravenes any of the provisions of this section shall be guilty of an offence under this Act.

Trade.

26.—(1) A bank shall not engage, whether on its own account or on a commission basis, and whether alone or with others, in the wholesale or retail trade, including the import or export trade, except in the course of the satisfaction of debts due to it for the purpose of carrying on its banking business.

(2) Any bank which contravenes the provisions of subsection (1) of this section shall be guilty of an offence under this Act.

Investments.

27.—(1) A bank shall not acquire or hold any part of the share capital of, or otherwise have an interest in, any financial, commercial, agricultural, industrial or other undertaking exceeding in the aggregate forty per cent of that bank’s capital funds except such shareholding as the bank may acquire in the course of the satisfaction of debts due to it, which shareholding shall, however, be disposed of at the earliest suitable opportunity.

(2) This section does not apply in respect of—

• (a) any shareholding approved in writing by the Authority in another bank or in a subsidiary company formed by the bank concerned for the carrying out of nominee, executor or trustee functions or other functions incidental to banking business; or

• (b) any shareholding approved by the Authority in any corporation set up for the purpose of promoting development in Singapore.

(3) The provisions of subsection (1) of this section do not apply to the Development Bank of Singapore, Limited.

(4) Any bank which contravenes the provisions of subsection (1) of this section shall be guilty of an offence under this Act.

Immovable property.

28.—(1) A bank shall not purchase or acquire any immovable property or any right therein exceeding in the aggregate forty per cent of that bank’s capital funds except as may be reasonably necessary for the purpose of conducting its business or of housing or providing amenities for its staff:

Provided that this does not prevent a bank—

• (a) from letting part of any building which is used for the purpose of conducting its business; or

• (b) from securing a debt on any immovable property and, in the event of default in payment of the debt, from holding that immovable property for realisation by sale or auction at the earliest suitable opportunity.

(2) The provisions of this section do not apply to the Development Bank of Singapore, Limited.

(3) Any bank which contravenes the provisions of subsection (1) of this section shall be guilty of an offence under this Act.

Loans secured by immovable property.

29.—(1) A bank shall not make any loans or advances exceeding in the aggregate thirty per cent of the amount of its deposits in Singapore (including the deposits and borrowings from any other bank at that bank) on the security of immovable property for the purpose of purchasing, improving or altering the immovable property:

Provided that any bank whose business is principally in such loans or advances may, with the prior written consent of the Authority, make such loans or advances in an aggregate amount up to, but not in excess of sixty per cent of the amount of its deposits in Singapore (including the deposits and borrowings from any other bank at that bank).

(2) A loan or advance secured solely by a mortgage, deed of trust, or other such instrument upon immovable property or by notes or other obligations which are so secured, is, for the purpose of subsection (1) of this section, a loan or advance secured by immovable property; a loan or advance secured in part by mortgage, deed of trust, or other instrument upon immovable property, or by notes or other obligations which are so secured, or by any other form of security, is, for the purposes of this subsection, a loan or advance secured by immovable property to the extent, but only to the extent, of the value of that immovable property as a security as determined by the Authority.

(3) Nothing in this section shall be construed to prohibit any bank from accepting as security for a loan or advance made in good faith without security or upon security subsequently found to be inadequate, a mortgage, deed of trust, or other instrument upon immovable property, or notes or other obligations which are so secured.

(4) The provisions of this section do not apply to the Development Bank of Singapore, Limited.

(5) Any bank which contravenes the provisions of subsection (1) of this section shall be guilty of an offence under this Act.

Liquidation of prohibited transactions.

30.—(1) Subject to this Act any bank which, before the date of the coming into operation of this Act, has entered into any transaction contrary to any of the provisions of sections 25, 26, 27, 28 and 29 of this Act shall, within six months of that date, submit a statement of the transaction to the Authority and shall furthermore, within that time or such further time as the Authority may specify, liquidate the transaction or come within the limitations prescribed by those sections and dispose of any property or right that may have been acquired thereby.

(2) Any bank which fails to comply with the provisions of subsection (1) of this section shall be guilty of an offence under this Act.

Deductions for purposes of sections 25, 27 and 28.

31. For the purposes of sections 25, 27 and 28 of this Act there shall be deducted from the capital funds of the bank any debit balance appearing in the profit and loss account of the bank.

Proof of compliance with section 25, 27, 28 or 29.

32. Any bank, if at any time called upon in writing by the Authority so to do, shall satisfy the Authority by the production of such evidence or information as it may require, that the bank is not in contravention of any of the provisions of section 25, 27, 28 or 29 of this Act.

Relief from limitations imposed by sections 25, 27 and 28.

33.—(1) Any bank whose head office is situated outside Singapore may apply in writing to the Authority for an order relieving that bank from the restrictions or limitations imposed by sections 25, 27 and 28 of this Act in relation to any transactions referred to in those sections and the Authority may make such an order subject to such conditions as it thinks fit.

(2) The Authority shall make an order under subsection (1) of this section only if it is satisfied that the making of the order is in the interests of the creditors and depositors of the bank.

(3) An order made by the Authority under subsection (1) of this section shall be effective for such period as the Authority may decide and shall cease to have effect on such date as may be specified in the order except that no order may be made which is expressed to have effect for a period longer than two years from the date of the coming into operation of this Act.

(4) The Authority may make an order under subsection (1) of this section in respect of transactions entered into by the bank before or after the commencement of this Act.

Part VI. Minimum Asset Requirements

Minimum liquid assets.

34.—(1) The Authority may, from time to time, prescribe by notice in writing a minimum amount or amounts of liquid assets to be held by banks.

(2) The minimum amount or amounts of the assets so prescribed to be held shall be expressed in the form of a percentage or percentages which those assets shall bear to the sight, savings account, time and other liabilities of each bank, either jointly or separately, and the percentage or percentages may be varied by the Authority by notice in writing.

(3) Whenever the Authority issues a notice under subsection (1) of this section, each bank shall be allowed such uniform period of grace, being not less than one month, as may be specified in the notice, in which to comply with its provisions.

(4) A bank shall not, during any period in which it has failed to comply with any notice under subsection (1) of this section, without the approval of the Authority, grant further advances to any person.

(5) For the purpose of computing the minimum amount or amounts of liquid assets under this section and specified assets under section 36 of this Act, and the sight, savings account, time and other liabilities of a bank carrying on business in Singapore and elsewhere, the offices and branches of the bank in Singapore shall be deemed to constitute a separate bank carrying on business in Singapore.

(6) For the purposes of this section liquid assets are—

• (a) notes and coin which are legal tender in Singapore;

• (b) balances with the Authority;

• (c) balances with banks in Singapore, after deducting therefrom balances held for banks in Singapore;

• (d) net money at call in Singapore;

• (e) Treasury bills issued by the Government and maturing within three months (exclusive of days of grace); and

• (f) such other assets as the Authority may from time to time approve.

(7) The Authority may by notice in writing require each bank to render such returns as the Authority deems necessary for the implementation of this section.

(8) Any bank that fails to comply with any of the provisions of this section shall be liable to pay, on being called upon to do so by the Authority, a penalty interest charge of not more than one-tenth of one per cent of the amount of the deficiency for every day during which the deficiency continues.

(9) Any bank that fails or refuses to pay a penalty interest charge under subsection (8) of this section shall be guilty of an offence under this Act.

Minimum cash balances.

35.—(1) The Authority may from time to time require banks to maintain minimum cash balances, not exceeding thirty per cent of each bank’s deposit and other liabilities, on deposit with the Authority as reserves against their deposit and other liabilities.

(2) Subject to the limit specified in subsection (1) of this section, the Authority may prescribe different ratios for different types of liabilities and may further prescribe the method of computing the amount of the required reserves, but the ratios shall be uniform for all banks.

(3) Any prescription of, or change in, the minimum reserve requirements under subsection (1) or (2) of this section shall take effect only after the expiration of thirty days’ notice to the banks of the Authority’s intention to take such action.

(4) Where a bank (in this section referred to as “the defaulting bank”) has failed to maintain sufficient minimum cash balances required under subsection (1) of this section the Authority may by order in writing direct the defaulting bank to make good the deficiency within the period specified in the order and the defaulting bank shall comply with the requirements of the order.

(5) If the defaulting bank fails to make good the deficiency within the period specified in the order referred to in subsection (4) of this section it shall be lawful, notwithstanding the provisions of any other written law, for the Authority to serve a notice in writing upon any other bank with which the defaulting bank has a credit balance, whether in current or deposit account, directing that bank to transfer to the Authority such amount as is specified in the notice as being equivalent to the amount of the deficiency in the minimum cash balances of the defaulting bank required under subsection (1) of this section and the other bank shall immediately comply with the requirements of that notice.

(6) No action shall lie against, and no liability shall attach to, any bank that complies with the requirements of a notice referred to in subsection (5) of this section for any loss or damage suffered by the defaulting bank as a result of the other bank taking action in compliance with the requirements of that notice.

(7) The Authority may, in addition to any action taken under subsections (4) and (5) of this section, impose on any bank that fails to maintain sufficient minimum cash balances required under subsection (1) of this section a penalty interest charge of not more than one-tenth of one per cent per day of the amount of the deficiency for every day during which the deficiency continues.

(8) Any bank that fails or refuses to pay a penalty interest charge under subsection (7) of this section shall be guilty of an offence under this Act.

Minimum asset requirement.

36.—(1) The Authority may require banks to maintain a minimum amount or amounts of assets specified in subsection (2) of this section to be held by banks in Singapore expressed as a percentage or percentages which such assets shall bear to the sight, savings account, time and other liabilities of each bank either jointly or separately.

(2) For the purposes of subsection (1) of this section, the specified assets are—

• (a) the assets specified in paragraphs (a) to (f) of subsection (6) of section 34 of this Act;

• (b) loans or advances made to persons in Singapore;

• (c) securities issued by the Government, or by any public authority established by any law, and any other securities issued in Singapore and approved for the purposes of this section by the Authority; and

• (d) other assets in Singapore which may be approved by the Authority for the purposes of this section.

(3) Any bank which fails to comply with any of the requirements of the Authority under the provisions of subsection (1) of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five thousand dollars and in the case of a continuing offence to a further fine of one thousand dollars for every day during which the offence continues after conviction.

Part VII. Powers of Control over Banks

Regulation of interest rates of banks.

37.—(1) The Authority may from time to time determine and announce the rates of interest payable to or by banks, the rates of discount chargeable by banks, or the rates of commission and other charges payable to banks.

(2) The provisions of subsection (1) of this section do not apply to transactions between banks in Singapore.

Recommendations to banks concerning credits and investments.

38.—(1) The Authority may, in respect of loans and advances or investments of banks, make recommendations to the banks in respect of the following:—

• (a) the purposes for which they may or may not be granted or made;

• (b) the maximum maturities or, in the case of loans and advances, the type and minimum amount of security which shall be required and, in the case of letters of credit, the minimum or margin deposit; or

• (c) the limits for any particular category of loans, advances or investments or for the total amount outstanding in respect of such loans, advances or investments.

(2) Any recommendation made under subsection (1) of this section shall apply uniformly to all banks engaging in the transactions covered by the recommendation.

(3) Where the Authority has made a recommendation under subsection (1) of this section and the banks have accepted it without objections, or have failed to notify the Authority of their objections or have failed to forward their representations to it within the time specified in subsection (4) of this section, it may issue a direction in writing to each bank on any of the matters referred to in subsection (1) of this section requiring that effect be given to the recommendation within a reasonable time, and the banks shall comply with that direction.

(4) Where the Authority has made a recommendation and the banks have, or any bank has, notified the Authority within fourteen days of the receipt of the recommendation that the banks, or any bank, objects to the recommendation, it shall call upon the banks or bank, as the case may be, to make representations in writing within one month of the notification concerning those objections.

(5) Upon receipt of such representations the Authority shall consider them and may—

• (a) reject the representations; or

• (b) amend or modify the recommendation in accordance with the representations, or otherwise,

and in either event, it shall thereupon issue a direction in writing to the banks or bank, as the case may be, requiring that effect be given to the original recommendation or to the recommendation as subsequently amended or modified by the Authority within a reasonable time, and the banks or any bank, as the case may be, shall comply with that direction.

(6) The provisions of this section do not apply to the Development Bank of Singapore, Limited.

Inspection of banks.

39. The Authority shall, from time to time, inspect under conditions of secrecy, the books, accounts and transactions of each bank and of any branch, agency or office outside Singapore opened by a bank incorporated in Singapore.

Special investigation of banks.

40.—(1) The Authority may at any time make an investigation, under conditions of secrecy, of the books, accounts and transactions of any bank, if it has reason to believe that any bank is carrying on its business in a manner likely to be detrimental to the interest of its depositors and other creditors, or has insufficient assets to cover its liabilities to the public, or is contravening the provisions of this Act.

(2) The Authority may appoint an auditor, other than the auditor appointed by the bank or the Authority under section 53 of this Act, to exercise the powers of the Authority under section 39 of this Act and subsection (1) of this section.

Production of bank’s books, accounts and documents.

41.—(1) For the purposes of an inspection or investigation under section 39 or 40 of this Act, the bank under inspection or investigation shall afford the Authority access to and shall produce its books, accounts and documents and shall give such information and facilities as may be required to conduct the investigation:

Provided that those books, accounts and documents shall not be required to be produced at such times or at such places as would interfere with the proper conduct of the normal daily business of that bank.

(2) If any book, account or document or information is not produced in accordance with subsection (1) of this section, it shall be presumed subject to satisfactory evidence being furnished by the bank justifying such a refusal to produce that book, account or document or information, that the bank concerned has been carrying on business in contravention of the terms of its licence with effect from that day and shall be liable on conviction to a fine not exceeding five thousand dollars and in the case of a continuing offence to a further fine of one thousand dollars for every day during which the offence continues after conviction.

Banking secrecy.

42.—(1) Except as provided in sections 40 and 41 of this Act, nothing in this Act authorizes the Authority to inquire specifically into the affairs of any individual customer of any bank and any incidental information relating to the affairs of an individual customer obtained by the Authority in the course of an inspection or investigation made by it under the provisions of this Act shall be secret between the Authority and that bank:

Provided that nothing in this section shall be deemed to limit any powers conferred upon the High Court or a Judge thereof by Part IV of the Evidence Act or to prohibit obedience to an order made under that Part.

(2) No official of any bank and no person who by reason of his capacity or office has by any means access to the records of the bank registers or any correspondence or material with regard to the account of any individual customer of that bank shall give, divulge or reveal any information whatsoever regarding the moneys or other relevant particulars of the account of that customer to—

• (a) any person who, or any bank, corporation or body of persons which, is not resident in Singapore; or

• (b) any foreign government or organization, unless—

  • (i) the customer or his personal representatives gives or give his or their permission so to do;

  • (ii) the customer is declared bankrupt; or

  • (iii) the information is required to assess the creditworthiness of the customer in connection with or relating to a bona fide commercial transaction or a prospective commercial transaction.

(3) For the purposes of paragraph (a) of subsection (2) of this section a bank, corporation or body of persons shall be regarded as not residing in Singapore if the control and management of the business thereof is exercised outside Singapore.

(4) Any person who contravenes the provisions of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine of ten thousand dollars or to imprisonment for a term not exceeding three years or to both such fine and imprisonment.

Information of insolvency, etc.

43. Any bank which considers that it is, or is likely to become, unable to meet its obligations, or is insolvent, or is about to suspend payments, shall forthwith inform the Authority of that fact.

44.—(1) Where—

Action by Authority if bank is unable to meet obligations, etc., or is conducting business to the detriment of depositors.

• (a) a bank informs the Authority that it is likely to become unable to meet its obligations, or that it is insolvent, or about to suspend payments;

• (b) a bank becomes unable to meet its obligations, or is insolvent, or suspends payments;

• (c) after an inspection or investigation is made under section 39 or 40 of this Act, the Authority is of the opinion that the bank—

  • (i) is carrying on its business in a manner likely to be detrimental to the interest of its depositors or its creditors;

  • (ii) is insolvent or is likely to become unable to meet its obligations or is about to suspend payment;

  • (iii) has contravened or failed to comply with any of the provisions of this Act; or

  • (iv) has contravened or failed to comply with any condition attached to its licence; or

• (d) the Authority considers it in the public interest to do so,

the Authority may exercise such one or more of the powers specified in subsection (2) of this section as appears to it to be necessary.

(2) Subject to subsection (1) of this section, the Authority may—

• (a) require the bank concerned forthwith to take any action or to do or not to do any act or thing whatsoever in relation to its business as the Authority may consider necessary;

• (b) appoint a person to advise that bank in the proper conduct of its business; or

• (c) assume control of and carry on the business of that bank or direct some other person to assume control of and carry on the business of that bank.

(3) The Authority may, upon representation made to it or on its own motion, modify or cancel any action taken by it under subsection (2) of this section, and in so modifying or cancelling any action may impose such conditions as it thinks fit, subject to which the modification or cancellation shall have effect.

Powers of Authority.

45. Where the Authority has taken action under subsection (2) of section 44 of this Act, it may, without prejudice to the powers conferred by paragraph (b) of subsection (1) of section 16 of this Act, exercise one or more of the following powers, that is to say:—

• (a) confirm, vary or reverse any requirement, appointment or direction made by it;

• (b) make such order as it may think fit in relation to the affairs of the bank and exercise any power which it may exercise under subsection (2) of section 44 of this Act;

• (c) present a petition to the High Court for the winding up of the bank by the High Court.

Duration of control.

46.—(1) Where the Authority has assumed control of the business of a bank in pursuance of section 44 of this Act it shall 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 it is satisfied that the reasons for which it assumed control of the business have ceased to exist, or that it is no longer necessary for the protection of the depositors of the bank that it should remain in control of the business.

(2) Where the Authority has assumed control of the business of a bank in pursuance of section 44 of this Act or ceased to control the business of a bank in pursuance of this section, it shall notify that fact in the Gazette.

Bank under control of Authority to co-operate with Authority.

47.—(1) Where the Authority has assumed control of the business of a bank in pursuance of section 44 of this Act the bank shall submit its business to the control of the Authority and shall provide the Authority with such facilities as it may require to carry on the business of that bank.

(2) Any bank which fails to comply with subsection (1) of this section or with any requirement of the Authority thereunder shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five thousand dollars and in the case of a continuing offence to a further fine of one thousand dollars for every day during which the offence continues after conviction.

Remuneration and expenses of Authority and others in certain cases.

48.—(1) The Authority may at any time (whether or not the appointment of such person has terminated) fix the remuneration and expenses to be paid by a bank to any person appointed by the Authority under subsection (2) of section 44 or section 45 of this Act to advise the bank in the proper conduct of its business.

(2) Where, under paragraph (c) of subsection (2) of section 44 or paragraph (b) of section 45 of this Act, the Authority has assumed control of the business of a bank or some other person has assumed control of the business of a bank pursuant to a direction or order of the Authority, the Authority may, at any time, whether or not it or that other person has ceased to be in control of the business of the bank, fix the remuneration and expenses to be paid by the bank to the Authority and to any person employed or authorized by it under section 3 of this Act to assist it in the control of and the carrying on of the business of the bank, or to that other person, as the case may be.

Moratorium.

49.—(1) The Authority may, if it considers it to be in the interests of the depositors of a bank make an order prohibiting that bank from carrying on banking business or from doing or performing any act or function connected with banking business or any aspect thereof that may be specified in the order.

(2) The Authority may, if it considers it to be in the interests of the depositors of a bank, apply to the High Court for an order staying the commencement or continuance of any proceedings by or against the bank in regard to any business of the bank. Such an order shall be valid for a period not exceeding six months.

(3) So long as an order under subsection (1) of this section remains in force the licence granted to that bank under this Act shall be suspended.

Part VIII. Numbered Accounts

Banks may with the approval of the Authority open numbered accounts.

50.—(1) For the purposes of this Part, the expression “numbered accounts” means accounts opened with banks in Singapore that are identifiable only by a number or code word or by such other means as the Authority may determine.

(2) No bank in Singapore shall open numbered accounts for its customers except with the prior approval in writing of the Authority which may attach such limitations, conditions, qualifications and exceptions thereto as it thinks fit.

(3) Any bank which contravenes the provisions of subsection (2) of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding ten thousand dollars.

Types of numbered accounts.

51.—(1) Numbered accounts facilities offered by banks to their customers may extend to current accounts, deposit accounts, securities deposit accounts and safes, but shall not extend to credit facilities.

(2) The owners of the numbered accounts shall only be known to such senior officers of the bank as the bank may decide.

Secrecy of numbered accounts.

52.—(1) The officials of any bank operating numbered accounts on behalf of its customers or any person who by reason of his capacity or office has by any means access to the records of the bank, registers, correspondence or any other material with regard to numbered accounts shall keep absolute secrecy thereof in the interests of the bank’s customers.

(2) The officials of any bank and other persons mentioned in subsection (1) of this section shall not give, divulge or reveal any information whatsoever regarding the name or identity of the owner of a numbered account to any individual, corporation, bank, public administration, judicial or military authorities unless—

• (a) the owner of the numbered account or his personal representatives gives or give his or their permission so to do;

• (b) the owner is declared bankrupt;

• (c) a suit arises between the bank and the owner relating to a banking transaction; or

• (d) the owner is required so to do by order of a Judge of the Supreme Court made for special cause for the purposes of any civil or criminal proceedings.

(3) Part IV of the Evidence Act does not apply to numbered accounts.

(4) Any person who contravenes the provisions of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine of ten thousand dollars or to imprisonment for a term not exceeding three years or to both such fine and imprisonment.

Part IX. Miscellaneous

Auditing.

53.—(1) Notwithstanding the provisions of the Companies Act, every bank shall appoint annually an auditor approved by the Authority.

(2) The Authority may appoint an auditor—

• (a) if the bank fails to appoint an auditor; or

• (b) if it considers it desirable that another auditor should act with the auditor appointed under subsection (1) of this section,

and may, at any time, fix the remuneration to be paid by the bank to that auditor.

(3) The duties of an auditor appointed under subsections (1) and (2) of this section shall be—

• (a) to carry out, for the year in respect of which he is appointed, an audit of the accounts of the bank; and

• (b) to make a report in accordance with section 174 of the Companies Act—

  • (i) in the case of a bank incorporated in Singapore—upon the annual balance-sheets and profit and loss accounts that are referred to in subsections (1) and (3) of section 21 of this Act; and

  • (ii) in the case of a bank incorporated outside Singapore—upon the annual balance-sheet and profit and loss account that are referred to in subsection (3) of section 21 of this Act.

(4) The auditor’s report shall be attached to the balance-sheet and the profit and loss account and a copy thereof shall be sent to the Authority.

Clearing House and settlement of balances between banks.

54. In order to facilitate the clearing of cheques and other credit instruments for banks carrying on business in Singapore, the Authority shall, in conjunction with banks operating in Singapore, by regulations, establish a Clearing House.

Declaration of holidays.

55.—(1) The Authority may, at any time by notice in the Gazette, declare any day or days to be a bank holiday or holidays.

(2) No bank shall do any business with the public on any day declared a bank holiday under the provisions of subsection (1) of this section.

(3) A bank holiday declared under the provisions of subsection (1) of this section shall not necessarily be a public holiday and nothing in this section shall be deemed to affect the provisions of any written law which may from time to time be in force in Singapore relating to public holidays.

(4) Any reference to a bank holiday in any written law which may from time to time be in force in Singapore shall include any day declared to be a bank holiday under the provisions of this section and any day which is a public holiday within the meaning of any written law which may be in force in Singapore relating to public holidays.

Priority of deposit liabilities.

56. Where a bank becomes unable to meet its obligations or becomes insolvent or suspends payment, the assets of that bank in Singapore shall be available to meet all deposit liabilities of the bank in Singapore; and such deposit liabilities shall have priority over all other liabilities of the bank.

Execution of instruments under seal.

57. Notwithstanding anything contained in the articles of association or regulations of any bank incorporated in Singapore with respect to the execution of instruments under its seal, but without prejudice to anything in such articles or regulations not inconsistent herewith, the seal of the bank shall not be affixed to any instrument except in the presence of a director of the bank and of one other person being either a director or an officer of the bank duly authorized in that behalf, and the director and that other person as aforesaid shall sign every instrument to which the seal of the company is so affixed in their presence.

Disqualification of directors and employees of banks.

58. Notwithstanding the provisions of any other written law, any person—

• (a) who is or becomes bankrupt, suspends payments or compounds with his creditors; or

• (b) who is or has been convicted in any country of an offence involving dishonesty or fraud and has not received a free pardon for the offence for which he was convicted; or

• (c) who has been a director of, or directly concerned in the management of, a bank licensed under this Act or which was licensed under the Banking Ordinance, 1958, (repealed by this Act) which is being or has been wound up by a court or the licence of which has been revoked,

shall not, without the consent in writing of the Authority, act or continue to act as the director, manager, secretary or other officer in any bank.

Offences by directors or managers.

59.—(1) Any person being a director, managing director or manager of a bank who—

• (a) fails to take all reasonable steps to secure compliance by a bank with the provisions of this Act or any other written law applicable to banks in Singapore; or

• (b) fails to take all reasonable steps to secure the accuracy and correctness of any statement submitted under this Act or of any other written law applicable to banks in Singapore,

shall be guilty of an offence under this Act and shall, in respect of each offence, be liable on conviction to imprisonment for a term not exceeding two years or to a fine not exceeding three thousand dollars or to both such imprisonment and fine.

(2) In any proceedings against a person under subsection (1) of this section it shall be a defence to prove that he had reasonable grounds for believing that another person was charged with the duty of securing compliance with the requirements of those laws or with the duty of ensuring that those statements were accurate and that that person was competent and in a position to discharge that duty.

(3) A person shall not be sentenced to imprisonment for any offence under subsection (1) of this section unless, in the opinion of the court, he committed the offence wilfully.

Offences by directors, employees and agents.

60. Any director, manager, trustee, auditor, employee or agent of any bank who—

• (a) wilfully makes or causes to be made, a false entry in any book of record or in any report, slip, document or statement of the business, affairs, transactions, conditions, assets or accounts of that bank;

• (b) wilfully omits to make an entry in any book of record or in any report, slip, document or statement of the business, affairs, transactions, conditions, assets or accounts of that bank, or wilfully causes any such entry to be omitted; or

• (c) wilfully alters, abstracts, conceals or destroys an entry in any book of record or in any report, slip, document or statement of the business, affairs, transactions, conditions, assets or accounts of that bank, or wilfully causes any such entry to be altered, abstracted, concealed or destroyed,

shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding ten thousand dollars or to imprisonment for a term not exceeding three years or to both such fine and imprisonment.

Indemnity.

61. No liability is incurred by—

• (a) any public officer;

• (b) any person authorized or employed by the Authority under section 3 of this Act;

• (c) any person appointed under paragraph (b) of subsection (2) of section 44 of this Act to advise a bank in the proper conduct of its business;

• (d) any person who has assumed control of the business of a bank pursuant to a direction or order of the Authority under paragraph (c) of subsection (2) of section 44 or paragraph (b) of section 45 of this Act; or

• (e) any person appointed under subsection (2) of section 40 of this Act,

as a result of anything done by him bona fide in the exercise of any power, or the performance of any function or duty, conferred or imposed by or under this Act.

Power to compound.

62. The Authority may, without instituting proceedings against any person for any offence under this Act, or any regulations made thereunder, which is punishable only by a fine or a default penalty, demand and receive the amount of the fine or default penalty or such reduced amount as it thinks fit from that person, whereupon—

• (a) if the person pays that amount to the Authority within fourteen days after the demand, no proceedings shall be taken against him in relation to the offence; or

• (b) if the person does not so pay the amount so demanded, the Authority may cause proceedings to be instituted in relation to the offence.

Publication of list of banks.

63. The Authority shall cause to be published in the Gazette in the month of April in each year a list of all banks to which licences have been issued under this Act and if any licence is issued, revoked or surrendered during the interval between the publication of two such lists, notice thereof shall also be caused to be published in the Gazette.

General penalty.

64. Any bank which contravenes or fails to comply with any provisions of this Act for which no penalty is expressly provided shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding fifty thousand dollars.

Offences triable in District Court.

65. Notwithstanding the provisions of any other written law, offences under this Act may be tried in a District Court, which shall have the power to impose the maximum penalty prescribed for any offence under this Act.

Consent of Attorney-General.

66. No prosecution in respect of any offence under this Act shall be instituted except with the consent of the Attorney-General.

Recovery of fees, expenses, etc.

67. There shall be recoverable as a civil debt due to the Authority from the bank concerned—

• (a) the amount of any fees payable under sections 8 and 13 of this Act;

• (b) any remuneration and expenses payable by the bank to any person appointed under paragraph (b) of subsection (2) of section 44 of this Act; and

• (c) any remuneration and expenses payable by the bank to the Authority or to any person employed or authorized by the Authority under section 3 of this Act to assist it in the control of and the carrying on of the business of the bank or to any other person who has assumed control of the business of the bank pursuant to a direction or order of the Authority under paragraph (c) of subsection (2) of section 44 or paragraph (b) of section 45 of this Act or to any person appointed under subsection (2) of section 40 of this Act.

Operation of Act not to affect the Companies Act.

68. Nothing in this Act affects the operation of the Companies Act, and any bank that is liable to be incorporated under that Act continues to be so liable as if this Act had not been passed but in case of conflict between that Act and this Act the provisions of this Act prevail unless otherwise provided in this Act.

Exemption.

69. This Act does not apply to the Post Office Savings Bank established under the Post Office Savings Bank Act or to any co-operative society registered under the Co-operative Societies Act or to any business of pawnbroking carried on by a person licensed under the Pawnbrokers Act or to finance companies licensed under the Finance Companies Act.

Regulations.

70. The Authority may make such regulations from time to time as it may deem necessary for carrying into effect the provisions of this Act.

Saving.

71. All regulations, instructions, orders and decisions made under or in accordance with the Banking Ordinance, 1958, as amended and extended by the Banking (Amendment and Extension) Act, 1965, remain valid and binding and shall be deemed to have been made under the provisions of this Act until they are amended or repealed.

Part X. Transitional

Transitional licensing provisions.

72.—(1) Notwithstanding the provisions of sections 4 and 9 of this Act, any bank specified in the Fourth Schedule⁵ to this Act which on 1st January 1970 was carrying on banking business in Singapore shall, upon the date of the coming into operation of this Act, be granted a licence under this Act, 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 that date.

(2) Any bank which is granted a licence under the provisions of this section shall comply with the provisions of section 9 of this Act within a period of two years from the date of the coming into operation of this Act.

(3) If any bank licensed under the provisions of this section fails to comply with the provisions of section 9 of this Act in accordance with subsection (2) of this section, the licence granted to it under this section shall become null and void except insofar as may be necessary for the purpose of winding up its banking business.

(4) The Authority may, in any particular case, extend the period provided by subsection (2) of this section and the period of validity of the licence concerned.

{The four Schedules are omitted from this volume.}

Part I. Preliminary

Short title.

1. This Act may be cited as the Finance Companies Act.

Interpretation.

2. In this Act, unless the context otherwise requires—

“auditor” means any person approved by the Authority as a finance company auditor for the purposes of this Act;

“the Authority” means the Monetary Authority of Singapore established under section 3 of the Monetary Authority of Singapore Act²;

“company” means a company incorporated or registered under the Companies Act or pursuant to any corresponding previous written law;

“deposit” means a loan of money at interest or repayable at a premium but does not include a loan to a company or other body corporate upon terms involving the issue of debentures or other securities;

“depositor” means a person entitled, or prospectively entitled, to repayment of a deposit whether made by him or not;

“director” includes any person occupying the position of director of a finance company by whatever name called and includes a person in accordance with whose directions or instructions the directors of a finance company are accustomed to act and an alternate or substitute director;

“finance company” means any company licensed under this Act to carry on financing business, and all branches and offices in Singapore of such a company shall be deemed to be one finance company for the purposes of this Act;

“financing business” means the business of—

• (a) borrowing money from the public, by acceptance of deposits and issuing certificates or other documents acknowledging or evidencing indebtedness to the public and undertaking to repay the money on call or after an agreed maturity period; and

• (b) lending money to the public or to a company deemed to be related to the finance company by virtue of section 6 of the Companies Act (in this Act referred to as the “related company”) on the basis that the public or the related company undertakes to repay the money, whether within an agreed period of time or not, or by instalments,

and includes the business of financing hire-purchase transactions arising out of hire-purchase agreements, as defined in the Hire-Purchase Act, where the money used, or to be used, for such business is borrowed from the public;

“public company” means a company incorporated in Singapore other than a private company.

Part II. Licensing of Finance Companies

Licensing of finance companies.

3. (1) No financing business shall be transacted in Singapore except by a public company that is in possession of a valid licence granted by the Authority authorising it to conduct financing business in accordance with the provisions of this Act.

(2) Any person who contravenes the provisions of subsection (1) of this section shall be guilty of an offence under this Act and shall be liable on conviction 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.

Use of words “finance company”.

4. No person or body of persons, whether incorporated or not, other than a finance company licensed under this Act shall, without the consent of the Authority, use the words “finance company” or any of its derivatives in any language, or any other words indicating that it transacts financing business, in the name, description or title under which such person or body of persons is transacting business in Singapore or make or continue to make any representations to such effect in any bill-head, letter paper, notice, advertisement or in any other manner whatsoever:

Provided that nothing in this section shall prohibit an association of finance companies formed for the protection of common interests from using the words “finance company” or any of its derivatives in any language as part of its name or description of its activities.

Examination of persons suspected of transacting financing business.

5. (1) Whenever the Authority has reason to believe that a person is conducting financing business without a licence, it may call for the books, accounts and records of such person in order to ascertain whether or not such person has violated or is violating any provisions of this Act, and any person wilfully refusing to submit such books, accounts and records shall be guilty of an offence under this Act and shall be liable on conviction to imprisonment for a term not exceeding one year or to a fine not exceeding one thousand dollars or to both such imprisonment and fine.

(2) Upon the conviction of any person under subsection (1) of this section a District Court shall have power to order the production of any books, accounts and records to the Authority and any person failing to comply with such order shall be guilty of an offence under this Act and shall be liable on conviction to imprisonment for a term not exceeding one year or to a fine not exceeding one thousand dollars or to both such imprisonment and fine and, in the case of a continuing offence, to a fine not exceeding one hundred dollars for each day during which the offence continues.

Application for licence.

6. (1) As from the date of the coming into operation of this Act, any public company proposing to conduct financing business in Singapore shall, before commencing any such business, apply in writing to the Authority for a licence under this Act.

(2) In considering any application by a public company for a licence the Authority may require to be satisfied as to—

• (a) the financial condition of the company;

• (b) the character of the management of the company;

• (c) the adequacy of the capital structure and earning prospects of the company;

• (d) the objects of the company as disclosed in its memorandum of association;

• (e) the convenience and needs of the community to be served; and

• (f) whether the public interest will be served by the granting of a licence.

(3) The Authority may grant a licence with or without conditions, or refuse to grant a licence.

(4) The Authority may at any time vary or revoke any existing conditions of a licence or impose additional conditions.

(5) Where a licence is granted subject to conditions the finance company shall comply with those conditions and any finance company that fails to comply with any conditions of its licence shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five thousand dollars.

Minimum capital requirements of a finance company.

7. Subject to the provisions of this Act, no finance company shall be granted or shall hold a licence unless its capital, issued and paid up in cash, and unimpaired by losses or otherwise, is not less than five hundred thousand dollars.

Restriction on opening of branches of a finance company.

8. (1) No finance company shall open any new branch, agency or office, whether inside or outside Singapore, without submitting an application in writing to the Authority.

(2) In considering such application, the Authority may require to be satisfied by an inspection under section 26 of this Act or otherwise, as to—

• (a) the financial condition of the company;

• (b) the general character of the management of the company;

• (c) the adequacy of the capital structure and earning prospects of the company;

• (d) the convenience and needs of the community to be served; and

• (e) whether the public interest will be served by the opening or, as the case may be, change of location of the place of business.

(3) Upon being so satisfied as to the matters referred to in subsection (2) of this section, the Authority may—

• (a) grant the application; or

• (b) without assigning any reason therefor, refuse to grant the application,

and its decision there on shall be final.

(4) Any finance company that fails to comply with subsection (1) of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five hundred dollars for every day during which the default continues.

Mergers, etc., of a finance company.

9. (1) No finance company carrying on business in Singapore shall be merged or consolidated with or acquire a majority interest in any other finance company without the prior approval of the Authority.

(2) In considering such an application, the Authority shall have power to call for such information as it may require.

(3) The Authority may—

• (a) approve the application; or

• (b) refuse the application.

Amendment of constitution of a finance company.

10. (1) Every finance company that intends to alter its memorandum of association or articles of association shall, before proposing any resolution in this regard, furnish to the Authority for its approval particulars in writing (verified by a statutory declaration made by the secretary of the finance company) of the proposed alteration.

(2) The Authority may thereupon—

• (a) approve the proposed alteration without modification;

• (b) approve the proposed alteration with modification; or

• (c) refuse to approve the proposed alteration.

(3) If the Authority approves the proposed alteration with modification, the finance company shall adopt the proposed alteration as so modified or not proceed with the proposed alteration and if the Authority refuses to approve the proposed alteration it may request the finance company to withdraw the proposed alteration and the finance company shall comply with the Authority’s request.

(4) Any finance company which fails to comply with the requirements of subsection (1) of this section or with any request by the Authority made under subsection (3) of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding three hundred dollars for every day during which the default continues.

Revocation of licence.

11. (1) The Authority—

• (a) shall, by order, revoke the licence of a finance company if the company ceases to carry on the business for which it has been licensed in Singapore or goes into liquidation or is wound up or otherwise dissolved;

• (b) may, in its discretion, by order, revoke the licence of a finance company if, in its opinion, the finance company—

  • (i) is carrying on its business in a manner likely to be detrimental to the interests of its depositors;

  • (ii) has insufficient assets to cover its liabilities to its depositors;

  • (iii) carries on business while its paid-up capital (unimpaired by losses or otherwise) is less than five hundred thousand dollars; or

  • (iv) is contravening or has contravened the provisions of this Act; and

• (c) may, also in its discretion, by order, revoke the licence of a finance company—

  • (i) if the finance company or any person who is in a managerial or executive position in that finance company has been convicted of any offence under this Act; or

  • (ii) if it considers it in the public interest to do so:

Provided that before revoking any licence, the Authority shall give the finance company notice in writing of its intention to do so, specifying a date, not less than twenty-one days after the date of the notice, upon which such revocation will take effect and calling upon the finance company to show cause to the Authority why such licence should not be revoked.

(2) Where the Authority has revoked a licence under the provisions of subsection (1) of this section, it shall forthwith inform the finance company by notice in writing of such revocation.

Publication of list of finance companies.

12. The Authority shall cause to be published in the Gazette in the month of April in each year a list of all finance companies to which licences have been issued under this Act and if any licence is issued or revoked during the interval between the publication of two such lists, notice thereof shall also be caused to be published in the Gazette.

Part III. Reserve Funds, Dividends, Balance Sheets and Information

Maintenance of reserve fund by finance companies.

13. Every finance company shall—

• (a) maintain a reserve fund;

• (b) if the paid-up capital of the finance company is not less than two million dollars, transfer to such reserve fund out of the net profits of each year after due provision has been made for taxation—

  • (i) so long as the amount of the reserve fund is less than fifty per cent of the paid-up capital, a sum equal to not less than thirty per cent of the net profits;

  • (ii) so long as the amount of the reserve fund is not less than fifty per cent but less than one hundred per cent of the paid-up capital, a sum equal to not less than fifteen per cent of the net profits;

  • (iii) so long as the amount of the reserve fund is not less than one hundred per cent of the paid-up capital, a sum equal to not less than five per cent of the net profits; and

• (c) if the paid-up capital of the finance company is less than two million dollars, transfer to such reserve fund out of the net profits of each year after due provision has been made for taxation—

  • (i) so long as the amount of the reserve fund is less than fifty per cent of the paid-up capital, a sum equal to not less than fifty per cent of the net profits;

  • (ii) so long as the amount of the reserve fund is not less than fifty per cent but less than one hundred per cent of the paid-up capital, a sum equal to not less than twenty-five per cent of the net profits;

  • (iii) so long as the amount of the reserve fund is not less than one hundred per cent of the paid-up capital, a sum equal to not less than ten per cent of the net profits.

Restriction on payment of dividends by finance companies.

14. No finance company shall pay any dividend on its shares until all its capitalized expenditure (including preliminary expenses, organisation expenses, share selling commission, brokerage, amount of losses incurred and any item of expenditure not represented by tangible assets) has been completely written off.

Exhibition of balance-sheet by finance companies.

15. Every finance company shall exhibit throughout the year, in a conspicuous position in every office and branch of that finance company, a copy of its last audited balance-sheet together with the full and correct names of all persons who are directors of the finance company, as soon as such balance-sheet is audited. A copy of such balance-sheet shall be published in at least each of four local daily newspapers, printed in the Malay, Tamil, Chinese and English languages not later than six months after the end of each financial year.

In this section, the expression “financial year” shall have the same meaning as is assigned to that expression in section 4 of the Companies Act, except that for the word “corporation” therein there shall be substituted the words “finance company”.

Information and statistics to be furnished by finance companies.

16. (1) Every finance company shall furnish to the Authority at such time and in such manner as the Authority may prescribe, all such information and data as it may reasonably require for the proper discharge of the Authority’s functions under the provisions of this Act.

(2) Nothing in this Act shall authorise the Authority to enquire specifically into the affairs of an individual depositor of a finance company and any information relating to the affairs of such individual depositor obtained by it in the course of an inspection or investigation made under this Act shall be secret between it and that finance company:

Provided that nothing in this section shall be deemed to limit any powers conferred upon the High Court or a Judge by Part IV of the Evidence Act or to prohibit obedience to an order made under that Part or any such law.

(3) Every finance company that fails or neglects to furnish any information required by the Authority under subsection (1) of this section and within the time specified by the Authority shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding one thousand dollars for every day during which the default continues.

Part IV. Regulation of Business

Acknowledgment of indebtedness.

17. Where a finance company has accepted money from any person as a deposit the company shall within two months after the acceptance of the money issue to that person a document which acknowledges or evidences or constitutes an acknowledgment of the indebtedness of the company in respect of that deposit.

Demand deposits, dealings in foreign exchange, etc., by finance companies.

18. (1) No finance company shall—

• (a) accept any deposit which is repayable on demand by cheque, draft or order drawn by a depositor on the finance company;

• (b) deal in gold or foreign exchange of whatever kind;

• (c) grant unsecured advances, unsecured loans or unsecured credit facilities which in the aggregate and outstanding at any one time exceed ten per cent of the paid-up share capital and published reserves of the finance company and which as regards—

  • (i) any individual director whether borrowing on his own account or jointly with another director;

  • (ii) a firm in which it or any of its directors has an interest as a partner, manager or agent, or any individual or firm of whom or of which any of its directors is a guarantor;

  • (iii) a corporation that is deemed to be related to the finance company as described in section 6 of the Companies Act; or

  • (iv) any other person or body of persons whether incorporated or not,

• exceed at any time the sum of five thousand dollars; or

• (d) grant or permit to be outstanding to any customer any advances, loans or credit facilities, or give financial guarantees or incur any other liabilities on his behalf to an aggregate amount of such advances, loans or credit facilities, guarantees or liabilities in excess of sixty per cent of the paid-up share capital and published reserves of the finance company:

  Provided that, with the approval of the Authority, the percentage referred to in this paragraph may be increased to one hundred per cent of the paid-up share capital and published reserves of the finance company.

(2) In paragraph (c) of subsection (1) of this section, the expressions “unsecured advances”, “unsecured loans” or “unsecured credit facilities” mean advances, loans or credit facilities made without security or, in respect of any advance, loan or credit facility made with security, any part thereof which at any time exceeds the market value of the assets constituting that security, or where the Authority is satisfied that there is no established market value, on the basis of a valuation approved by the Authority.

(3) In paragraph (c) of subsection (1) of this section, the word “directors” includes the wife, husband, father, mother, son or daughter of a director.

(4) All the directors of a finance company shall be liable jointly and severally to indemnify a finance company against any loss arising from the making of any unsecured advance, loan or credit facility under subparagraph (i), (ii) or (iii) of paragraph (c) of subsection (1) of this section.

Dealing by a finance company in its own shares, etc.

19. (1) Except as is otherwise expressly provided by this Act, no finance company shall give, whether directly or indirectly and whether by means of a loan guarantee or the provision of security or otherwise, any financial assistance for the purpose of or in connection with a purchase or subscription made or to be made by any person of, or for, any shares in the finance company or, where such company is a subsidiary, in its holding company, or in any way purchase, deal in or lend money on its own shares.

(2) Nothing in subsection (1) of this section shall prohibit—

• (a) the provision by a finance company, in accordance with any scheme for the time being in force, of money for the purchase of or subscription for fully-paid shares in the finance company or its holding company, being a purchase or subscription by trustees of or for shares to be held by or for the benefit of employees of such company, including any director holding a salaried employment or office in such company; or

• (b) the giving of financial assistance by a finance company to persons, other than directors, bona fide in the employment of that company or of a subsidiary of that company with a view to enabling those persons to purchase fully-paid shares in the finance company to be held by themselves by way of beneficial ownership.

(3) If there is any contravention of this section, the finance company and every officer of such company who is in default shall be guilty of an offence under this Act and shall be liable on conviction to imprisonment for a term not exceeding one year or to a fine not exceeding two thousand dollars.

(4) Nothing in this section shall operate to prevent the finance company from recovering the amount of any loan made in contravention of this section or any amount for which it becomes liable on account of any financial assistance given in contravention of the provisions of this section.

Restrictions on trade by finance companies.

20. (1) No finance company shall engage, whether on its own account or on a commission basis, and whether alone or with others, in the wholesale or retail trade, including the import or export trade, except for the purpose of carrying on its financing business.

(2) Except as provided in this Act a finance company shall not carry on any kind of business other than financing business.

Restrictions on investments by finance companies.

21. (1) No finance company shall acquire or hold any part of the share capital of, or otherwise have a direct interest in, any financial, commercial, agricultural, industrial or other undertaking exceeding in the aggregate twenty-five per cent of the paid-up share capital and published reserves of that finance company except such shareholding as the finance company may acquire in the course of realising debts due to it, which shareholding shall, however, be disposed of at the earliest suitable moment.

(2) Notwithstanding the provisions of subsection (1) of this section, the percentage holding or interest referred to in that subsection may upon the application of a finance company to the Authority, and with the consent of the Authority, be increased to not more than fifty per cent of the paid-up share capital and published reserves of that finance company.

Restrictions on holding immovable property by finance companies.

22. (1) No finance company shall purchase or acquire any immovable property, or any right, title or interest therein exceeding in the aggregate at any one time twenty-five per cent of the finance company’s paid-up share capital and published reserves, except as may be reasonably necessary for the purpose of conducting its business or of housing or providing amenities for its staff, but this shall not prevent a finance company—

• (a) from letting part of any building which is used for the purpose of conducting its business; or

• (b) from securing a debt on any immovable property and in the event of default in payment of such debt, from holding that immovable property for realisation by sale or auction at the earliest suitable moment.

(2) This section shall not apply to such property as may from time to time be approved by the Authority.

(3) The Registrar of Titles in issuing any certificate of title or registering any assurance in the Registry of Titles and Deeds or any purchaser shall be exonerated from enquiring as to any matter or fact relating to the title of a finance company to, or to the power of a finance company in dealing with, any immovable property, or any right, title and interest therein, which has been purchased or acquired in contravention of the prohibition contained in this section and shall be protected from the effect of notice of any such matter or fact.

Liquidation of prohibited transactions by finance companies.

23. Any company which, before the date of the coming into operation of this Act, had entered into any transaction prohibited by the provisions of sections 18, 19, 20, 21 and 22 of this Act shall, if it is licensed under this Act, within six months of that date, submit a statement of those transactions to the Authority and shall, furthermore, within the said time, or such further time as the Authority may specify, liquidate those transactions or failing liquidation of those transactions be subject to the restrictions specified in sections 18, 19, 20, 21 and 22 of this Act and be bound accordingly to dispose of any movable or immovable property, or any right, title or interest therein as may have been acquired as a result of those prohibited transactions.

Orders by the Authority.

24. (1) The Authority may, by order, prescribe—

• (a) the maximum rates of interest that finance companies shall pay on different types or classes of deposits;

• (b) the maximum amount or amounts, expressed as a percentage or percentages, of total assets that finance companies may hold in one or more types or classes of loans, or advances;

• (c) the minimum down payments and maximum maturity periods for different types or classes of loans, or advances granted by finance companies;

• (d) the maximum rates of interest or commission and other charges and the methods of computing such interest or commission and other charges that finance companies may impose on different types or classes of loans, or advances granted by them;

• (e) the maximum amount of loans or advances which finance companies may grant to any person or class of persons; and

• (f) the reserves to be maintained with the Authority.

(2) Any order made under subsection (1) of this section shall apply uniformly to all finance companies, or to any class or classes of finance companies, and shall, together with its effective date, be published in the Gazette.

Part V. Minimum Liquid Assets

Minimum holdings of liquid assets by finance companies.

25. (1) Every finance company shall maintain a minimum holding of liquid assets, as defined in subsection (4) of this section, but a period of six months after the date of the coming into operation of this Act shall be allowed for compliance with this requirement.

(2) The minimum amount of liquid assets to be maintained by finance companies shall be determined from time to time by the Authority and shall be expressed as a percentage of the liabilities of each finance company on account of deposits.

(3) The Authority shall prescribe the method of computing the amount of liquid assets to be held by finance companies.

(4) For the purposes of this section “liquid assets” means all or any of the following:

• (a) notes and coins that are legal tender in Singapore;

• (b) net balances at banks in Singapore;

• (c) net money at call in Singapore;

• (d) Singapore Treasury bills;

• (e) other assets that the Authority may prescribe.

(5) Any finance company that fails to comply with any requirement of this section shall be liable, on being called upon to do so by the Authority (in addition to any other penalty that may be imposed under this Act) to pay a penalty interest charge of not less than one-fifteenth of one per cent of the amount of the deficiency for every day during which the default continues and shall not while the default continues accept any deposits or enter into new commitments without the approval of the Authority.

Part VI. Inspection of Finance Companies

Inspection and investigation of finance companies and production of books, etc.

26. (1) The Authority may, from time to time, inspect or cause to be inspected under conditions of secrecy, the books, accounts and transactions of any finance company and of any branch, agency or office outside Singapore opened by a finance company incorporated in Singapore.

(2) The Authority may at any time make an investigation, under conditions of secrecy, of the books, accounts and transactions of a finance company, if the Authority has reason to believe that such finance company is carrying on its business in a manner detrimental to the interests of its depositors and other creditors or has insufficient assets to cover its liabilities to the public, or is contravening the provisions of this Act.

(3) The Authority may appoint any auditor, other than the auditor appointed by the finance company under the provisions of section 172 of the Companies Act, to exercise the powers of the Authority under subsections (1) and (2) of this section.

(4) For the purpose of an inspection or investigation under this section, a finance company shall afford the Authority 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 would interfere with the proper conduct of the normal daily business of that finance company.

(5) If any book, account or document or information is not supplied in accordance with subsection (4) of this section, the finance company concerned shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding two thousand dollars and to a further fine of two hundred and fifty dollars in respect of every day during which the default continues after conviction.

Powers of the Authority to issue orders after an inspection.

27. (1) If the Authority finds upon an inspection under section 26 of this Act that the affairs of a finance company are being conducted in a manner likely to be detrimental to the interests of the depositors or prejudicial to the interests of the finance company, the Authority may by order require the finance company to take such corrective action as the Authority considers to be necessary or require the finance company to discontinue such practices or procedures.

(2) No order shall be issued under subsection (1) of this section unless the finance company has been given a reasonable opportunity to present its views to the Authority.

(3) The Authority may, upon representation being made to it, or on its own motion, modify or cancel any order issued under subsection (1) of this section, and, in so modifying or cancelling any order, may impose such conditions as it thinks fit.

Part VII. Submission of Accounts and Auditor’s Report

Directors to submit copy of profit and loss account and auditor to submit copy of his report to Authority.

28. (1) The directors of a finance company shall submit to the Authority a copy of the profit and loss account and balance-sheet made out pursuant to subsections (1) and (3) of section 169 of the Companies Act.

(2) Every auditor of a finance company shall submit to the Authority a copy of his report as to every balance-sheet and profit and loss account (including every consolidated balance-sheet and consolidated profit and loss account) that he is required under section 174 of the Companies Act to make to members of the finance company.

Part VIII. Miscellaneous

The Authority to administer the Act.

29. (1) The Authority shall be charged with the general administration of this Act and the exercise of the functions imposed on it by this Act.

(2) The Authority may authorise or appoint any person to assist it in the exercise of its functions and duties under this Act, either generally or in a particular case.

(3) The members of the Authority shall be deemed to be public servants within the meaning of the Penal Code.

Prohibition against transacting of financing business on public holidays.

30. No finance company shall transact any business with the public on any day that is a public holiday under the provisions of the Holidays Act, or on any day declared to be a bank holiday under any written law relating to banking.

Indemnity.

31. The Authority shall not 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 Authority by this Act.

Finance company unable to meet obligations to inform Authority.

32. Any finance company that considers that it is likely to become unable to meet its obligations or is about to suspend payments shall forthwith inform the Authority of such fact.

Moratorium.

33. (1) The Authority may, if it considers it to be in the interests of the depositors of a finance company, by order—

• (a) prohibit a finance company from carrying on its business; and

• (b) stay the commencement or continuance of any actions or proceedings against a finance company in regard to its business for a specified period of time on such terms and conditions as the Authority deems reasonable, and may from time to time extend the period up to a total period of moratorium of not more than six months.

(2) So long as an order under subsection (1) of this section remains in force, any licence granted to such finance company under this Act shall be suspended.

Memorandum and articles of association of a finance company.

34. (1) Every company that was not carrying on financing business in Singapore before the date of the coming into operation of this Act shall, before it is granted a licence by the Authority to carry on financing business under this Act, include in its memorandum of association or articles of association the restrictions, limitations and prohibitions contained in sections 18, 19, 20, 21 and 22 of this Act.

(2) Every company that—

• (a) has carried on financing business in Singapore before the date of the coming into operation of this Act; and

• (b) is licensed under this Act,

but whose memorandum of association or articles of association do not include all or any of the restrictions, limitations or prohibitions contained in sections 18, 19, 20, 21 and 22 of this Act, shall be deemed to have included in its memorandum of association or articles of association all or any of such restrictions, limitations or prohibitions as are not so included.

(3) To the extent that any such restriction, limitation or prohibition so deemed to have been included in those memorandum of association or articles of association under subsection (2) of this section, is inconsistent with any provision already included in the memorandum of association or articles of association that restriction, limitation or prohibition shall prevail over such provision.

Disqualification of directors of a finance company.

35. (1) Without prejudice to anything contained in the Companies Act, any person who is a director, manager or other officer concerned with the management of a finance company shall cease to hold office—

• (a) if he becomes bankrupt, suspends payments or compounds with his creditors; or

• (b) if he is convicted of an offence involving dishonesty or fraud.

(2) No person who has been a director of, or directly concerned in the management of, a finance company licensed under this Act which has been wound up by a court shall without the express authority of the Authority, act, or continue to act, as director of, or be directly concerned in, the management of any finance company.

(3) Any person acting in contravention of subsection (1) or (2) of this section shall be guilty of an offence under this Act and shall be liable on conviction 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.

Penalty for offences not otherwise provided for.

36. (1) Any finance company which, or person who, contravenes or fails to comply with any provisions of this Act or any order made under this Act for which no penalty is expressly provided shall be guilty of an offence under this Act and shall be liable on conviction 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.

(2) The Authority may, without instituting proceedings against any person for any offence under this Act, or any regulations made thereunder, which is punishable only by a fine or a default penalty, demand and receive the amount of such fine or default penalty or such reduced amount as he thinks fit from such person, whereupon—

• (a) if such person pays such amount to the Authority within fourteen days after the demand, no proceedings shall be taken against him in relation to the offence; and

• (b) if such person does not so pay the amount so demanded, the Authority may cause proceedings to be instituted in relation to the offence.

Offences by directors or managers.

37. (1) Any person who, being a director, managing director or manager of a finance company—

• (a) fails to comply, or to take all reasonable steps to secure compliance by the finance company, with the provisions of this Act or any order made under this Act or any other law relating to finance companies in force in Singapore; or

• (b) fails to ensure or to take all reasonable steps to ensure the accuracy and correctness of any statement or information submitted under this Act or of any other law relating to finance companies in force in Singapore,

shall be guilty of an offence under this Act and shall be liable on conviction by a District Court 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.

(2) In any proceedings against a person under subsection (1) of this section it shall be a defence to prove that he had reasonable grounds to believe and did believe that a competent and reliable person was charged with the duty of securing compliance with the provisions of this Act or any order made under this Act or any other written law relating to finance companies in Singapore or with the duty of securing that those statements were accurate and correct and that the person was in a position to discharge that duty.

(3) A person shall not be sentenced to imprisonment for any offence under subsection (1) of this section unless in the opinion of the court the offence was committed wilfully.

Holding out as finance company.

38. Where any public or private company or firm holds itself out to be a licensed finance company when it is not licensed under this Act, such company or firm shall be guilty of an offence under this Act and every director, manager or every officer of such company and the proprietor or every partner or officer of such firm shall, unless he proves that such holding out by the company or firm was made without his knowledge or consent, be guilty of an offence under this Act and shall be liable on conviction to imprisonment for a term not exceeding two years or to a fine not exceeding four thousand dollars or to both such imprisonment and fine.

Fiat of Attorney-General.

39. No prosecution in respect of any offence under this Act shall be instituted except by, or under the direction of, the Attorney-General acting upon a complaint made by the Authority.

Exemptions

40. (1) This Act shall not apply to—

• (a) any bank licensed under the Banking Act;

• (b) the Post Office Savings Bank established under the Post Office Savings Bank Act;

• (c) any co-operative society registered under the Co-operative Societies Act; or

• (d) any business of pawnbroking carried on by a person licensed under the Pawnbrokers Act.

(2) Notwithstanding any provisions in this Act, the Authority may exempt any finance company from any or all of the provisions of this Act.

Winding up provisions.

41. (1) Without prejudice to the provisions of the Companies Act—

• (a) a company (whether or not it is being wound up voluntarily) may be wound up under an order of the Court on the petition of the Authority; and

• (b) the Court may order the winding up of a company if—

  • (i) the company has held a licence under this Act and that licence has expired or has been revoked; or

  • (ii) the company has carried on financing business in Singapore in contravention of the provisions of this Act.

(2) In the winding up of a company that has been carrying on financing business, the depositors shall be deemed to be holders of debentures issued to them by the company and secured by a floating charge over all the property and undertaking of the company.

Redemption of securities held by finance company.

42. (1) As soon as practicable after the making of an order for the winding up of a finance company, the liquidator of the company shall publish in the Gazette a notice requiring every debtor of the finance company to redeem any property he has deposited with the company as security for any loan that he has obtained from the finance company, and shall also send by registered post such notice to every debtor whose security is held by the finance company and whose name is mentioned in the statement of affairs made out under section 234 of the Companies Act.

(2) The notice shall specify the latest date up to which any security may be redeemed, which date shall not be less than three months from the date of the notice.

(3) After the latest date for redeeming any security held by the finance company specified in the notice, the liquidator may proceed to realise any security held by the finance company forthwith, notwithstanding any agreement setting out any other period of redemption previously entered into between the finance company and the debtor.

Operation of Act not to affect the Companies Act.

43. Nothing in this Act shall affect the operation of the Companies Act, and any company that is liable to be incorporated under that Act shall continue to be so liable as if this Act had not been passed but in case of conflict between that Act and this Act the provisions of this Act shall prevail unless otherwise provided in this Act.

Regulations.

44. (1) The Authority may, from time to time, make such regulations for, or in respect of, every purpose which is deemed by it necessary for carrying out the provisions of this Act and for the prescribing of any matter which is authorised or required under this Act to be so prescribed.

(2) Without prejudice to the generality of subsection (1) of this section, the Authority may by such regulations—

• (a) prescribe fees to be charged under this Act; and

• (b) regulate advertisements of finance companies.

Part IX. Transitional

Transitional licensing provisions.

45. (1) Notwithstanding the provisions of section 7 of this Act, any company which on 5th December 1967 was carrying on financing business in Singapore may, within one month after the date of the coming into operation of this Act, apply for a licence and shall be granted a licence by the Authority which shall be valid up to and including 30th June 1968.

(2) Thereafter, such licence may be renewed for such further period, or periods, as the Authority may decide and be subject to such conditions as it may impose.

(3) A private company which has been granted a licence under subsection (1) of this section shall not be entitled to claim to be an exempt private company under the Companies Act.

Firms that have been carrying on financing business.

46. (1) Notwithstanding section 7 of this Act, any firm that had been carrying on financing business in Singapore before 5th December 1967 may apply for and may be granted a licence if such firm incorporates itself as a public company within three months of the date of the coming into operation of this Act.

(2) A licence granted under subsection (1) of this section may be valid for such period as the Authority may decide and be subject to such conditions as the Authority may impose.

Pawnbrokers

Persons to be deemed pawnbrokers.

3. (1) Any person who—

• (a) receives or takes of or from any person whomsoever any goods or chattels by way of security for the repayment of any sum or sums of money, not exceeding one thousand dollars advanced, thereon; or

• (b) purchases or receives or takes in goods or chattels and pays or advances or lends thereon any sum or sums of money, not exceeding one thousand dollars, with or under an agreement or understanding expressed or implied or to be from the nature and character of the dealing reasonably inferred that those goods or chattels may be afterwards redeemed or repurchased on any terms,

shall be deemed to be a person carrying on the business of taking goods and chattels in pawn, and every such transaction, article, payment, advance and loan shall be deemed a pawning, pledge or loan respectively within this Act.

(2) Nothing in this Act shall extend to any loan of money exceeding one hundred dollars and secured by a pawn or pledge, if the rate of interest does not exceed ten per cent per annum and if no further or other profit or advantage is taken or agreed for on the loan, or shall extend to prevent a pawnbroker under this Act from taking in pawn goods or chattels exceeding in value the sum of one thousand dollars or lending thereon a sum exceeding that amount.

Application of the Act to executors, etc., of pawnbrokers.

4. The provisions of this Act relating to pawnbrokers shall extend to and include the executors or administrators of deceased pawnbrokers, except that an executor or administrator shall not be answerable for any penalty or forfeiture personally or out of his own estate, unless the same is incurred by his own act or neglect.

Act done by servant to be deemed the act of the pawnbroker.

5. (1) For the purposes of this Act anything done or omitted to be done by the servant or agent of a pawnbroker, in the course of or in relation to the business of the pawnbroker, shall be deemed to be done or omitted, as the case may be, by the pawnbroker.

(2) Anything by this Act authorized to be done by a pawnbroker may be done by his servant or agent.

Extension of rights, etc., of pawners to their assigns, executors, etc.

6. The rights, powers and benefits by this Act reserved to and conferred on pawners shall extend to, and be deemed to be reserved to, and conferred on, the assignees of pawners, and to and on the executors or administrators of deceased pawners; but any person representing himself to a pawnbroker to be the assign, executor or administrator of a pawner shall, if required by the pawnbroker, produce to the pawnbroker the assignment, probate, letters of administration or other instrument under which he claims.

Licences

Appointment of Registrar and Assistant Registrars.

7. (1) The Minister may appoint a Registrar of Pawnbrokers and such number of Assistant Registrars of Pawnbrokers and other officers as he may consider necessary or expedient for the purposes of this Act.

(2) An Assistant Registrar shall have and may exercise all the powers conferred on the Registrar by this Act subject to such limitations as the Registrar sees fit to impose.

Issue of licences by the Board.

8. (1) Every pawnbroker shall annually take out from the Registrar a licence for carrying on his business for which there shall be charged and paid before the issue of the licence such fee as the Minister may prescribe. Application for such a licence shall be made in accordance with such rules as may be made under the provisions of section 45 of this Act.

(2) Licences shall be subject to such conditions, if any, as may be imposed by the Registrar in addition to those prescribed in section 9 of this Act.

(3) A separate licence shall be taken out and paid for by a pawnbroker for each pawnbroker’s shop kept by him.

(4) Every licence shall be dated on the day on which it is issued and shall determine on the thirty-first day of December.

(5) Any person who acts as a pawnbroker without having in force a valid licence issued by the Registrar shall be guilty of an offence and shall be liable on conviction to a fine not exceeding two thousand dollars and in the case of a second or subsequent conviction shall in addition be liable to imprisonment for a term not exceeding six months.

Conditions subject to which licences may be issued.

9. (1) No licence shall be issued by the Registrar to a pawnbroker in respect of any premises unless the Registrar is satisfied—

• (a) that the applicant is of good character and is a fit and proper person to carry on the business of pawnbroking;

• (b) that the premises to be licensed are structurally adapted for use as a pawnbroker’s shop and are in all other respects suitable for that purpose;

• (c) that the premises will not be used for the conduct or transaction of any business other than that of pawnbroking; and

• (d) that the applicant has deposited with the Accountant-General a sum of five thousand dollars as security for the proper conduct of his business under the licence.

(2) The Registrar may in his discretion refuse to issue or renew a license in respect of any applicant or any premises without assigning any reason therefor.

Power of Registrar to cancel licence.

9A. (1) The Registrar may cancel a licence and forfeit the whole or such part of the money deposited with the Accountant-General under paragraph (d) of subsection (1) of section 9 of this Act as the Registrar may think fit if he is satisfied that—

• (a) the licensed pawnbroker’s shop is being conducted in an improper or unsatisfactory manner; or

• (b) the licensee has been convicted of an offence under this Act; or

• (c) the licensee has failed to comply with any of the conditions upon which the licence was issued; or

• (d) since the issue of the licence, the licensee or the premises has ceased to comply with any of the requirements set out in subsection (1) of section 9 of this Act.

(2) The Registrar shall, before cancelling a licence and forfeiting any money under the provisions of subsection (1) of this section, give the licensee concerned notice in writing of his intention to do so specifying a date, not less than fourteen days after the date of the notice, upon which such cancellation and forfeiture shall be made and calling upon the licensee to show cause to the Registrar why his licence should not be cancelled and why his money should not be forfeited.

(3) The Registrar, on receiving any representation from a licensee, may, instead of cancelling a licence and forfeiting any money under the provisions of subsection (1) of this section, impose a penalty not exceeding five thousand dollars on the licensee and may recover the penalty from any cash deposit or other form of security given by the licensee to the Registrar.

(4) Any cancellation of a licence shall not affect the duties and liabilities of the licensee as a pawnbroker under this Act.

Appeal to the Minister.

9B. Any person aggrieved by the refusal of the Registrar to issue or renew a licence or the decision of the Registrar to cancel a licence and forfeit any money belonging to the licensee or to impose a penalty may, within ten days of the written notification to him of the refusal, cancellation, forfeiture or imposition of the penalty, appeal in writing to the Minister whose decision thereon shall be final and conclusive.

Pawnshop to keep open after expiration of licence for redemption of articles.

10. Upon the expiration or sooner determination of any licence the pawnbroker shall keep open the licensed premises daily from 8 a.m. to 6 p.m. for the redemption of articles pawned with him; and, for all purposes of this Act, except the receiving of articles in pawn, shall continue to exercise the rights and privileges and be subject to the duties and liabilities of a licensed pawnbroker until the whole of the articles held by him in pawn have been redeemed or the latest period of redemption for any of such articles has expired.

General Obligations of Pawnbroker

11. (1) Every pawnbroker shall—

• Description of articles pawned, etc., to be entered in a book.

• (a) keep and use in his business such books and documents as are prescribed, and shall enter therein in a clear and legible hand, in such style of character, language or dialect as the Minister directs, the particulars required by rules, and shall make all inquiries necessary for that purpose;

• Signboards.

• (b) keep always exhibited at or over the outer door of his shop a signboard of such size and in such position as the Registrar directs having printed thereon, in the English, Malay, Chinese and Tamil languages, the words “Pawnbroker’s Shop”; and

• Copy of rates to be exposed.

• (c) keep exposed in some convenient place in the shop, so as to be near to and visible to all comers, a legible copy of the rates of profit he may lawfully take under this Act, and also the same information in the English, Malay, Chinese and Tamil languages as is by rules required to be printed on pawn tickets.

(2) Every pawnbroker shall make such monthly returns as may be prescribed by rules made under the provisions of section 45 of this Act.

Penalty.

(3) Any pawnbroker who fails in any respect to comply with this section shall be guilty of an offence under this Act.

Pawning, Redemption and Sale

Pawnbroker to grant a pawn ticket.

12. A pawnbroker shall on taking a pledge in pawn give to the pawner a pawn ticket, and shall not take a pledge in pawn unless the pawner takes the pawn ticket.

Profit and charges allowed to pawnbroker.

13. (1) A pawnbroker may take profit on a loan on a pledge at a rate not exceeding that specified in Schedule B.²

(2) A pawnbroker may demand and take the charges specified in the said Schedule.

(3) A pawnbroker shall not in respect of a loan on a pledge take any profit or demand or take any charge or sum whatever other than those specified in the Schedule.

(4) A pawnbroker shall, if required at the time of redemption, give a receipt for the amount of loan and profit paid to him.

(5) The Minister may by order amend the rate of profits and charges specified in Schedule B to this Act.

(6) All orders made under subsection (5) of this section shall be published in the Gazette and shall be presented to Parliament as soon as may be after publication and if a resolution is passed pursuant to a motion notice whereof has been given for a sitting day not later than the first available sitting day of Parliament next after the expiry of three months from the date when orders are so presented annulling the orders or any part thereof as from a specified date, the orders or that part thereof as the case may be shall thereupon become void as from that date but without prejudice to the validity of anything previously done thereunder or to the making of new orders.

Period of redemption of pledge.

14. Every pledge shall be redeemable within six months from the day of pawning, exclusive of that day, or in the case of a pledge for a sum exceeding fifty dollars within such longer term as may have been specially agreed upon at the time of pawning.

Forfeiture of pledge for $50 and under if not redeemed.

15. A pledge pawned for fifty dollars or under, if not redeemed within the time allowed by this Act, shall at the end of the time of redemption become and be the pawnbroker’s absolute property.

Pledges exceeding $50 redeemable until sale.

16. A pledge pawned for any sum exceeding fifty dollars shall further continue redeemable until it is disposed of as in this Act provided, although the time of redemption has expired.

Sale by auction of pledge for a sum exceeding $50.

17. (1) A pledge pawned for any sum exceeding fifty dollars shall, when disposed of by the pawnbroker, be disposed of by sale by an auctioneer licensed in that behalf and not otherwise.

(2) The regulations contained in Schedule C shall be observed with reference to the sale.

(3) A pawnbroker may bid for and purchase at a sale by auction made under this Act a pledge pawned with him; and on such purchase he shall be deemed the absolute owner of the pledge purchased.

(4) The Minister may, by writing under his hand, license fit persons to conduct sales of forfeited pledges for such periods as in the licence are specified, and may revoke any such licence without assigning any reason.

Offences by auctioneer.

18. Any auctioneer who does anything in contravention of this Act relating to auctioneers, or fails to do anything which he is required by this Act to do, shall be guilty of an offence under this Act.

Right of holder of pawn ticket to inspect sale book.

19. At any time within four months after the auction at which a pledge pawned for above fifty dollars is sold, the holder of the pawn ticket may inspect the entry of the sale in the pawnbroker’s book and in the filled-up catalogue of the auction, authenticated by the signature of the auctioneer, or in either of them.

Obligation on pawnbroker to account for surplus within four months subject to set-off.

20. (1) Where a pledge pawned for above fifty dollars is sold, and appears from the pawnbroker’s book to have been sold for more than the amount of the loan and profit due at the time of sale, the pawnbroker shall on demand pay the surplus to the holder of the pawn ticket in case the demand is made within four months after the sale, the necessary costs and charges of the sale being first deducted.

(2) The pawnbroker shall send to the Registrar, on the first day of every calendar month, a list, written in the English language, showing the result of the sales of such pledges during the preceding calendar month, in Form 3 in Schedule A³ or in such other form as is prescribed, and the Registrar shall keep such list for three months in a place easily accessible to the public.

(3) If on the demand mentioned in subsection (1) it appears from the pawnbroker’s book that the sale of a pledge or pledges has resulted in a surplus and that, within four months before or after sale, the sale of another pledge or other pledges of the same person has resulted in a deficit, the pawnbroker may set off the deficit against the surplus, and shall be liable to pay the balance only after the set-off.

Offences as to a pledge for a sum exceeding $50.

21. Any pawnbroker who with respect to pledges for loans of above fifty dollars—

• (a) does not bona fide, according to the directions of this Act, sell a pledge pawned with him; or

• (b) enters in his book a pledge as sold for less than the sum for which it was sold, or fails duly to enter the same; or

• (c) refuses to permit any person entitled under this Act to inspection of an entry of sale in the pawnbroker’s book or of a filled-up catalogue of the auction, authenticated by the auctioneer’s signature, to inspect the same; or

• (d) fails without lawful excuse, the proof whereof shall lie on him, to produce such a catalogue on lawful demand; or

• (e) refuses to pay on demand the surplus to the person entitled to receive the same,

shall in every such case be guilty of an offence under this Act.

Delivery Up of Pledge

Right of holder of pawn ticket to redeem pledge.

22. The holder for the time being of a pawn ticket shall be presumed to be the person entitled to redeem the pledge, and, subject to this Act, the pawnbroker shall accordingly, on payment of the loan and profit, deliver the pledge to the person producing the pawn ticket, and he is hereby indemnified for so doing.

Production of pawn ticket on redemption.

23. A pawnbroker shall not, except as in this Act provided, be bound to deliver back a pledge unless the pawn ticket for it is delivered to him.

Liability of pawnbroker in case of fire or loss.

24. (1) Where a pledge is destroyed or damaged by or in consequence of fire or lost, the pawnbroker shall nevertheless be liable, on application within the period during which the pledge would have been redeemable, to pay the value of the pledge after deducting the amount of the loan and profit, such value to be assumed to be one quarter more than the amount of the loan.

(2) A pawnbroker shall be entitled to insure to the extent of the value so estimated.

Compensation for loss or depreciation of pledge.

25. (1) If a person entitled and offering to redeem a pledge shows, to the satisfaction of a Magistrate’s Court, that the pledge has become or has been rendered of less value than it was at the time of the pawning thereof by or through the default or neglect or wilful misbehaviour of the pawnbroker, the Court may, if it thinks fit, award a reasonable compensation to the owner of the pledge in respect of the damage, and the amount awarded shall be deducted from the amount payable to the pawnbroker or shall be paid by the pawnbroker, as the case may require, in such manner as the Court directs, provided that no suit shall thereafter be brought by the owner in any civil court in respect of the same matter.

(2) When a pawnbroker has been directed to pay a sum of money to the owner of a pledge under this section, the sum so directed to be paid shall be recoverable as a fine.

Protection of owner and of pawner not having pawn ticket.

26. (1) The following provisions shall have effect for the protection of owners of articles pawned and of pawners not having their pawn tickets to produce.

(2) Any person claiming to be the owner of a pledge but not holding the pawn ticket, or any person claiming to be entitled to hold a pawn ticket but alleging that the same has been lost, mislaid, destroyed or stolen or fraudulently obtained from him, may apply to the pawnbroker for a printed form of declaration, which the pawnbroker shall deliver to him.

(3) If the applicant delivers back to the pawnbroker the declaration duly made before a Magistrate or a notary public by the applicant and by a person identifying him, the applicant shall thereupon have as between him and the pawnbroker all the same rights and remedies as if he produced the pawn ticket:

Provided that such a declaration shall not be effectual for that purpose unless it is duly made and delivered back to the pawnbroker not later than on the third day after the day on which the form is delivered to the applicant by the pawnbroker.

(4) The pawnbroker is hereby indemnified for not delivering the pledge to any person until the expiration of the period aforesaid.

(5) The pawnbroker is hereby further indemnified for delivering the pledge or otherwise acting in conformity with the declaration, unless he has actual or constructive notice that the declaration is fraudulent or is false in any material particular.

(6) Declarations under this section may be in Form 1 or 2 of Schedule A,⁴ as the nature of the case requires.

(7) Every declaration under this section shall be deemed to be a declaration within the meaning of sections 199 and 200 of the Penal Code.

Delivery to owner of property unlawfully pawned.

27. (1) In each of the following cases:

• (a) if any person is convicted under this Act before a Magistrate’s Court of knowingly and designedly pawning with a pawnbroker anything being the property of another person, the pawner not being employed or authorized by the owner thereof to pawn the same;

• (b) if any person is convicted in any court of any offence against property which offence is defined or dealt with by any provision of sections 378 to 420 both inclusive of the Penal Code, and it appears to the Magistrate’s Court or other court that such property has been pawned with a pawnbroker; or

• (c) if in any proceedings before a Magistrate’s Court or other court it appears to the court that any goods and chattels brought before the court have been unlawfully pawned with a pawnbroker,

the court, on proof of the ownership of the goods and chattels, may, if it thinks fit, order the delivery thereof to the owner, either on payment to the pawnbroker of the amount of the loan or any part thereof, or without payment thereof or of any part thereof, as to the court, according to the conduct of the owner and the other circumstances of the case, seems just and fitting.

Liability of pawnbroker for taking stolen goods in pawn without due care.

(2) The court may also adjourn the proceedings for the attendance of the pawnbroker, and may summon the pawnbroker to attend at the adjourned hearing, and if, after hearing the pawnbroker, the court is of opinion that the pawnbroker has not exercised due care in taking in pawn any stolen property, the court may order the pawnbroker to pay a fine not exceeding two thousand dollars.

Summary order for delivery of pledge to person entitled.

28. Any pawnbroker who without reasonable excuse, the proof whereof shall lie on him, refuses or neglects to deliver a pledge to the person entitled to have delivery thereof under this Act shall be liable to a fine not exceeding five thousand dollars, and the court may, with or without imposing a fine, order the delivery of the pledge on payment of the amount of the loan and profit.

General Restrictions on Pawnbroker

Prohibition as to taking or purchasing of pledge in certain circumstances.

29. Any pawnbroker who—

• (a) takes an article in pawn from any person who appears to be intoxicated, or from a person apparently under the age of sixteen years;

• (b) purchases or takes in pawn or exchanges a pawn ticket issued by another pawnbroker;

• (c) employs any servant or other person under the age of sixteen years to take pledges in pawn;

• (d) under any pretence purchases, except at public auction, any pledge while in pawn or with him;

• (e) suffers any pledge while in pawn with him to be redeemed with a view to his purchasing it;

• (f) makes any contract or agreement with any person pawning or offering to pawn any article or with the owner thereof for the purchase, sale or disposition thereof within the time of redemption;

• (g) sells, pawns or otherwise disposes of any pledge pawned with him, except at such time and in such manner as are authorized by this Act;

• (h) makes an advance upon any article pledged with him otherwise than in money which is legal tender in Singapore; or

• (i) takes any goods or chattels in pawn from any person before 8 a.m. or after 8 p.m.,

shall be liable to a fine not exceeding five thousand dollars.

Unlawful Pawning and Taking in Pawn

Penalty for wrongfully pawning the property of another.

30. (1) Any person who knowingly and designedly pawns with a pawnbroker anything being the property of another person, the pawner not being employed or authorized by the owner thereof to pawn the same, shall be liable to a fine not exceeding two thousand dollars.

(2) In addition to any fine imposed under subsection (1), the court may order the accused to pay by way of compensation to the owner any sum not exceeding the full value of the pledge as ascertained by the court, such sum to be levied and taken in the same manner as a fine.

Proceedings where person offering article in pawn does not give a good account of himself;

31. (1) Any person who—

• (a) offers to a pawnbroker an article by way of pawn, being unable or refusing to give a satisfactory account of the means by which he became possessed of the article; or

  or gives false information;

• (b) wilfully gives false information to a pawnbroker as to whether an article offered by him in pawn to the pawnbroker is his own property or not, or as to his name and address or as to the name and address of the owner of the article; or

  or attempts without title to redeem a pledge.

• (c) not being entitled to redeem and not having any colour of title by law to redeem a pledge, attempts or endeavours to redeem the same,

shall be guilty of an offence under this Act.

(2) In every such case, and also in any case where, on an article being offered in pawn to a pawnbroker he reasonably suspects that it has been stolen or otherwise illegally or clandestinely obtained, the pawnbroker may seize and detain the person and the article, or either of them, and shall deliver the person and the article or either of them (as the case may be) as soon as may be into the custody of a police officer, who shall as soon as may be convey the person, if so detained, before a magistrate, to be dealt with according to law.

Person in possession of pawn ticket presumed to have been in possession of the article pawned.

32. Any person found in possession of a pawn ticket shall, until he satisfies the court to the contrary, be presumed to have been in possession of the pawned article to which the pawn ticket refers.

Duty of pawnbroker on offer of pledges or redemption under suspicious circumstances.

33. (1) If any person, under suspicious circumstances, offers any articles in pawn to a pawnbroker, or, without having any colour of title by law to redeem a pledge, attempts to redeem it, and the pawnbroker has reason to suspect such want of title, the pawnbroker shall inquire of the person how he came by the articles or the pawn ticket, as the case may be.

(2) If the person is not able or refuses to give a satisfactory account of himself or of the means by which he became possessed of the articles or pawn ticket, or wilfully gives any false information concerning the articles or pawn ticket, or as to his name or address, or as to the name or place of abode of the owner of the articles, or if there is any other reason to suspect that the articles or pawn ticket have been stolen or otherwise illegally or clandestinely obtained, the pawnbroker may seize and detain the person offering the articles or pawn ticket, and shall deliver him with the articles or pawn ticket into the custody of a police officer.

Prohibition as to taking in pawn linen, apparel, unfinished goods, etc., in certain cases.

34. Any pawnbroker who knowingly takes in pawn any linen or apparel or unfinished goods or materials entrusted to any person to wash, scour, iron, mend, manufacture, work up, finish or make up, shall be liable to a fine not exceeding two thousand dollars; and shall likewise restore the pledge to the owner thereof in the presence of the court or as the court directs.

Search warrant for linen, etc., unlawfully pawned.

35. (1) If the owner of any linen or apparel or unfinished goods or materials entrusted to any person as aforesaid and unlawfully pawned with a pawnbroker, or the owner of any other article unlawfully pawned with the pawnbroker, the last-mentioned owner having on oath satisfied a Magistrate’s Court that his goods have been unlawfully obtained, taken or withheld from him, makes out on oath before a Magistrate’s Court that there is a good cause to suspect that a pawnbroker has taken in pawn the linen, apparel, goods, materials or articles aforesaid without the privity or authority of the owner, and makes appear to the satisfaction of the Magistrate’s Court probable grounds for such suspicion, the Magistrate’s Court may issue a warrant for searching, within the hours of business, the shop of the pawnbroker.

(2) If the pawnbroker, on request by a police officer authorized by the warrant to make the search, refuses to open the shop or permit it to be searched, a police officer may break it open within the hours of business and search as he thinks fit therein for the linen, apparel, goods, materials or articles aforesaid, doing no wilful damage, and if any pawnbroker or other person oppose or hinders the search he shall be guilty of an offence under this Act.

(3) If on the search any linen, apparel, goods, materials or articles aforesaid is or are found and the property of the owner thereof is made out to the satisfaction of a Magistrate’s Court, the Court shall cause the same forthwith to be restored to the owner thereof.

Penalties and Police Regulations

General penalty.

36. Any pawnbroker or other person who is guilty of an offence under this Act, in respect whereof a specific forfeiture or penalty is not prescribed by this Act, or of any breach of this Act, shall be liable to a penalty not exceeding two thousand dollars.

Application of penalty.

37. Any penalty recovered under this Act, not directed to be otherwise applied, may be applied under the direction of the Magistrate’s Court in which it is recovered as follows:

• (a) where the complainant is the party aggrieved, a sum not exceeding one-half of the penalty may be paid to him;

• (b) where the complainant is not the party aggrieved, there shall be paid to him no part or such part only of the penalty as the Court thinks fit.

Penalty on common informer compounding information.

38. Any person who lays an information for an offence alleged to have been committed under this Act by which he was not personally aggrieved, and afterwards, directly or indirectly, receives, without the permission of the court, any sum of money or other reward for compounding, delaying or withdrawing the information, shall be guilty of an offence under this Act.

Detention of person offering forged pawn ticket, etc.

39. If any person utters, produces, shows or offers to a pawnbroker a pawn ticket which the pawnbroker reasonably suspects to have been counterfeited, forged or altered, the pawnbroker may seize and detain the person and the ticket or either of them, and shall deliver the person and the ticket or either of them, as the case may be, into the custody of a police officer.

Pawnbroker’s books subject to examination by police.

40. (1) The books required by this Act to be kept by a pawnbroker shall be produced by him for examination at any time during business hours on demand by any Justice of the Peace or by any police officer not under the rank of corporal, who are hereby severally authorized to enter at any time during business hours any pawnbroker’s shop without warrant to search for and examine the said books and to take extracts and copies therefrom.

(2) Any pawnbroker who fails to comply with this section shall be guilty of an offence under this Act.

Information to be given by police to pawnbrokers of lost and stolen property.

41. (1) Information as to property lost, stolen or otherwise fraudulently disposed of shall be given by the police, as soon as possible after such loss or fraud, to all pawnbrokers, with lists and descriptions of the same.

(2) If any property answering such lists and descriptions is in the possession of any pawnbroker or is thereafter offered to or shown to any pawnbroker he shall, without unnecessary delay, give information to that effect at the nearest police station or to any police officer, with the name, address and identity card number of the person in whose possession the property was seen, and in default thereof he shall be liable to a fine not exceeding two thousand dollars.

(3) The pawnbroker in such a case may also detain the person offering or showing the property until the arrival of the police.

Police officers may enter pawnshops, etc.

42. Any police officer not under the rank of corporal may enter any pawnbroker’s shop at any time during business hours, and may search without warrant the house, shop or premises of the pawnbroker for any articles that he may have reason to suspect to be therein and to have been dishonestly obtained or dishonestly placed there.

Police officers may arrest persons loitering about pawnshops under suspicious circumstances.

43. (1) Any police officer having reason to believe that a person in or loitering about a pawnbroker’s shop under suspicious circumstances has with him any article dishonestly obtained may detain that person and require him to produce any articles he may have with him.

(2) If any articles are produced which the police officer has reason to suspect to have been unlawfully obtained, he may take or cause to be taken the person and the articles to the nearest police station.

(3) If any person so required to produce such articles refuses to be searched, the police officer may take him or cause him to be taken before a Justice of the Peace, who if he sees fit may search the person or order him to be searched, and if any such articles are found may detain him with the articles so found to be dealt with according to law.

44. All offences under this Act or any rules made thereunder shall Jurisdiction. be tried before a Magistrate’s Court or District Court.

Rules

Rules

45. (1) The Minister may make rules prescribing—

• (a) the form of the books to be kept by pawnbrokers and the particulars to be entered therein;

• (b) the form of the note or pawn ticket to be issued by pawnbrokers and the particulars to be entered therein;

• (c) generally the manner and conditions in and under which the business of pawnbroking shall be conducted;

• (d) the fees to be paid for licences by pawnbrokers and by auctioneers under this Act, and the manner in which sales under this Act shall be held;

• (e) the procedure to be followed by applicants for licences as pawnbrokers and the procedure and proceedings of the Board;⁵

• (f) the form of the monthly returns to be made by pawnbrokers;

• (g) all matters stated or required in this Act to be prescribed; and

• (h) generally to give effect to the provisions of this Act.

(2) Any person contravening any rule made under this Act shall be liable to a fine not exceeding one thousand dollars.

{Schedules A and B are omitted from this volume.}

Schedule C regulations as to auction of pledges above fifty dollars

1. Auctions shall be held within the first seven days of each month at times and places approved by the Registrar. At least seven days’ notice in writing of all sales shall be given by the auctioneer to the Registrar, and to the public by means of an advertisement in a public newspaper and by notices, in the various vernacular languages and in English, to be posted in sufficient number and in conspicuous places to the satisfaction of the Registrar, stating—

• (a) the pawnbroker’s name and place of business;

• (b) the month in which the pledges were pawned; and

• (c) the place where the auction is to be held.

2. The advertisement shall be inserted on two several days in the same newspaper, and the second insertion shall be at least three clear days before the first day of sale.

3. Pawnbrokers shall send all forfeited pledges to a licensed auctioneer at least three days before the sale, duly ticketed and numbered, and they shall be fully exposed for sale to public view by the auctioneer for at least two days before the day of sale.

4. All sales shall be held in places quite open to the general public and large enough for the accommodation of intending purchasers.

5. The auctioneer shall publish in English catalogues of the pledges, stating—

• (a) the pawnbroker’s name and place of business;

• (b) the month in which each pledge was pawned; and

• (c) the number of each pledge as entered at the time of pawning in the pledge book.

6. The pledges of each pawnbroker in the catalogue shall be separate from any pledges of any other pawnbroker.

7. Where a pawnbroker bids at a sale, the auctioneer shall not take the bidding in any other form than that in which he takes the biddings of other persons at the same sale; and the auctioneer, on knocking down any article to a pawnbroker, shall forthwith declare audibly the name of the pawnbroker as purchaser.

8. The auctioneer shall, within fourteen days after the sale, deliver to the pawnbroker a copy of the catalogue or of so much thereof as relates to the pledges of that pawnbroker, filled up with the amounts for which the several pledges of that pawnbroker were sold and authenticated by the signature of the auctioneer.

9. The pawnbroker shall preserve a copy of every such catalogue for three years at least after the auction.

Part I. Preliminary

Short title and commencement.

1. (1) This Act may be cited as the Chit Funds Act, 1971, and shall come into operation on such date as the Minister may, by notification in the Gazette, appoint.

(2) The Minister may appoint different dates for the coming into operation of the different Parts or provisions of this Act.

Interpretation.

2. In this Act, unless the context otherwise requires—

“agreement” means the document which contains the terms and conditions agreed to and adopted by the subscribers and the chit fund company;

“chit fund” means a scheme or arrangement based wholly on the terms and conditions set out in section 24 of this Act or the regulations made thereunder or any scheme or arrangement that is deemed to be a chit fund under section 19 of this Act but does not include any scheme or arrangement which only partakes of the nature of a chit fund within the meaning of section 20 of this Act;

“chit fund amount” means the pool or the aggregate of the contributions payable on any specified day or in respect of any specified interval;

“chit fund business” means the business of carrying on chit funds;

“chit fund company” means a company which carries on chit fund business and holds a valid licence granted under section 7 of this Act. All branches and offices in Singapore of such company shall be deemed to be one chit fund company for the purposes of this Act;

“Commissioner” means the person appointed under section 3 of this Act to hold office of Commissioner of Chit Funds;

“contribution” means the sum of money payable periodically by each subscriber under the agreement;

“essential terms and conditions” means the terms and conditions specified in section 24 of this Act;

“interest” means that amount of money which the subscriber agrees to forego in order to purchase the chit fund amount;

“Minister” means the Minister charged with the responsibility for finance;

“prize” or “prize amount” means the difference between the chit fund amount and the interest;

“public company” means a company limited by shares incorporated in Singapore other than a private company;

“rebate” means the share of the interest payable to each subscriber;

“subscriber” includes any person who has agreed to participate in a chit fund or has signed the agreement in token thereof.

Part II. Appointment of Commissioner of Chit Funds

Commissioner of Chit Funds.

3. (1) For the purposes of this Act there shall be a Commissioner of Chit Funds who shall be appointed by the Minister.²

(2) The Commissioner shall be charged with the general administration of this Act and the exercise of the functions imposed upon him by this Act.

(3) The Commissioner may authorise or appoint any person to assist him in the exercise of his functions and duties under this Act, either generally or in any particular way.

(4) The Commissioner and any person authorised or appointed by him pursuant to subsection (3) of this section shall be deemed to be public servants within the meaning of the Penal Code.

Part III. Licensing of Chit Fund Companies

Licensing of Chit Funds.

4. (1) No chit fund business shall be transacted in Singapore except by a public company which is in possession of a valid licence granted under this Act by the Commissioner with the approval of the Minister authorising it to conduct chit fund business in accordance with the provisions of this Act.

(2) Any person who contravenes the provisions of subsection (1) of this section shall be guilty of an offence under this Act and shall be liable on conviction 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 and in the case of a continuing offence to a further fine of one thousand dollars for every day during which the offence continues after conviction.

Use of words “chit” and “chit fund”.

5. (1) No person or body of persons, whether incorporated or not, other than a chit fund company licensed under this Act shall, without the written consent of the Commissioner, use the word “chit” or the words “chit fund” or any of its or their derivatives in any language, or any other word indicating it transacts chit fund business, in the name, description or title under which such person or body of persons is transacting business in Singapore or make or continue to make any representation to such effect in any bill head, letter paper, notice, advertisement or in any other manner whatsoever.

(2) For the purposes of subsection (1) of this section the words “hwei”, “kutu” and “tontine” or any other word in any other language having the same meaning or being to the like intent shall be deemed to be derivatives of the word “chit”.

(3) Nothing in this section shall prohibit an association of chit fund companies formed for the protection of common interests from using the word “chit” or the words “chit fund” or any of its or their derivatives in any language as a part of its name or description of its activities.

(4) Any person who contravenes the provisions of subsection (1) of this section shall be guilty of an offence under this Act and shall be liable on conviction to imprisonment for a term not exceeding one year or to a fine not exceeding one thousand dollars or to both such imprisonment and fine and in the case of a continuing offence to a further fine not exceeding one hundred dollars for every day during which the offence continues after conviction.

Examination of persons suspected of transacting chit fund business.

6. Whenever the Commissioner has reason to believe that a person is transacting chit fund business without a licence, he shall have the power to examine the books, accounts and records of such person in order to ascertain whether or not such person has violated or is violating any provisions of this Act, and any refusal to submit such books, accounts and records shall be prima facie evidence of the fact of operation without a licence.

Application for licence.

7. (1) A public company which desires authority to carry on chit fund business in Singapore shall apply in writing to the Commissioner for a licence under this section and shall supply—

• (a) a copy of the memorandum of association and articles of association or other instrument under which the company is incorporated, duly verified by a statutory declaration made by a senior officer of the company;

• (b) a copy of the latest balance-sheet of the company; and

• (c) such other information as may be called for by the Commissioner.

(2) In considering any application by a public company for a licence the Commissioner may require to be satisfied as to—

• (a) the financial character of the company;

• (b) the character of the management of the company;

• (c) the adequacy of the capital structure of the company and earning prospects of the company;

• (d) the objects of the company as disclosed in its memorandum of association;

• (e) the convenience and needs of the community to be served;

• (f) whether the public interest will be served by granting of a licence.

(3) The Commissioner, with the approval of the Minister, may grant a licence with or without conditions, or refuse to grant a licence.

(4) The Commissioner may at any time vary or revoke any existing conditions of a licence or impose conditions or additional conditions thereto.

(5) Where a licence is subject to conditions the chit fund company shall comply with those conditions.

(6) Any chit fund company which fails to comply with any of the conditions of its licence shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five thousand dollars and, in the case of a continuing offence, to a further fine of one thousand dollars for every day during which the offence continues after conviction.

Licence fees.

8. (1) Every chit fund company in Singapore shall pay such annual licence fee as the Commissioner may by notification in the Gazette prescribe.

(2) The Commissioner may prescribe different licence fees in respect of different classes or categories of chit fund companies and such fees shall apply uniformly to such classes or categories.

(3) The manner of payment of the licence fee shall be as specified by the Commissioner.

Minimum capital requirements.

9. (1) Subject to the provisions of this Act, no chit fund company shall be granted or shall hold a licence unless its capital, issued and paid up in cash, and unimpaired by losses or otherwise, is not less than two hundred thousand dollars.

(2) The Commissioner may require such percentage of the issued and paid-up capital as may be prescribed in regulations made under this Act to be deposited in such manner as may be prescribed.

(3) No chit fund company incorporated in Singapore shall reduce its paid-up capital during the currency of its licence without the approval of the Commissioner.

Restriction of opening of branches of chit fund companies.

10. (1) No chit fund company shall open a new place of business or change the location of an existing place of business in Singapore without submitting a written application in respect thereof to the Commissioner.

(2) Upon receipt of an application under subsection (1) of this section, the Commissioner may—

• (a) give his approval; or

• (b) without assigning any reason therefor, refuse to give his approval, and his decision thereon shall be final.

(3) No chit fund company incorporated in Singapore shall open a new branch, agency or office in any place outside Singapore.

(4) Any chit fund company which contravenes the provisions of subsection (1) or (3) of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five hundred dollars and in the case of a continuing offence to a further fine of one hundred dollars for every day during which the offence continues after conviction.

Fees to be paid in respect of branches of chit fund companies.

11. (1) The Commissioner may from time to time by notification in the Gazette specify the annual licence fees which chit fund companies in Singapore shall pay for each of their branches.

(2) The manner of payment shall be as specified by the Commissioner.

Limitation on mergers, etc., of a chit fund company.

12. (1) No chit fund company incorporated in Singapore shall be merged or consolidated with or be taken over by another company or companies or their subsidiaries or related companies as described in section 6 of the Companies Act (whether such company is or companies are incorporated in Singapore or outside Singapore) nor shall such company or companies acquire an interest exceeding twenty per cent of the voting share capital of a chit fund company without application to, and approval by, the Commissioner.

(2) In considering such an application, the Commissioner shall have power to call for such information as he may require.

(3) The Commissioner may—

• (a) approve the application; or

• (b) refuse the application.

(4) Any chit fund company whose application has been refused by the Commissioner may within one month of being notified of the refusal by the Commissioner appeal against his refusal to the Minister whose decision thereon shall be final.

Amendment of constitution of a chit fund company.

13. (1) Every chit fund company in Singapore shall, prior to the making of any amendment or alteration in its memorandum of association or articles of association, or other instrument under which it is incorporated, furnish to the Commissioner for his approval particulars in writing (verified by a statutory declaration made by a senior officer of the chit fund company) of such proposed amendment or alteration.

(2) The Commissioner may thereupon—

• (a) approve the proposed alteration without modification;

• (b) approve the proposed alteration with modification; or

• (c) refuse to approve the proposed alteration.

(3) If the Commissioner approves the proposed alteration with modification, the chit fund company shall adopt the proposed alteration as so modified or not proceed with the proposed alteration and if the Commissioner refuses to approve the proposed alteration he may request the chit fund company to withdraw the proposed alteration and the chit fund company shall comply with the Commissioner’s request.

(4) Any chit fund company which fails to comply with the requirements of subsection (1) of this section or with any request by the Commissioner made under subsection (3) of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding three hundred dollars for every day during which the default continues.

Revocation of licence.

14. (1) The Commissioner may by order revoke a licence issued under this Act—

• (a) if he is satisfied that the chit fund company holding that licence—

  • (i) has ceased to transact chit fund business in Singapore or is carrying on any other business other than chit fund business;

  • (ii) proposes to make, or has made, any composition or arrangement with its creditors or has gone into liquidation or has been wound up, whether voluntary or involuntary, or otherwise dissolved;

  • (iii) is carrying on its business in a manner likely to be detrimental to the interests of the subscribers of its chit funds or has insufficient assets to cover its liabilities to its subscribers or the public;

  • (iv) is contravening the provisions of this Act or the regulations made thereunder; or

  • (v) has been convicted of any offence under this Act or the regulations made thereunder or if any of its officers holding a managerial or executive position has been convicted of any offence under this Act or the regulations made thereunder; or

• (b) if he considers it in the public interest to do so.

(2) The Commissioner shall, before revoking any licence under the provisions of subsection (1) of this section, give the chit fund company concerned notice in writing of his intention to do so, specifying a date, not less than twenty-one days after the date of the notice upon which such revocation shall take effect and calling upon the chit fund company to show cause to the Commissioner why such licence should not be revoked.

(3) When the Commissioner has revoked a licence under the provisions of subsection (1) of this section, he shall forthwith inform the chit fund company by notice in writing of such revocation.

(4) The chit fund company may, within fourteen days of the receipt of the notice referred to in subsection (3) of this section, or such extended period of time as the Minister may allow, appeal in writing against such revocation to the Minister whose decision thereon shall be final.

Effect of revocation of licence.

15. (1) Where an order of revocation becomes effective under section 14 of this Act—

• (a) notice of such revocation shall be published in the Gazette; and

• (b) the chit fund company shall, as from the date of such notice, cease to transact any chit fund business in Singapore except as may be approved by the Commissioner for the purpose of winding up its chit fund business.

(2) The provisions of paragraph (b) of subsection (1) of this section shall not prejudice the enforcement by any person of any right or claim against the chit fund company or by the chit fund company of any right or claim against any person.

Exhibition of licence.

16. (1) The licence issued under subsection (3) of section 7 of this Act, or a certified copy thereof, shall, so long as it remains valid, be exhibited in a conspicuous position at the principal place of business of the chit fund company and in the event of revocation under section 14 of this Act, the licence and all certified copies thereof shall be surrendered forthwith to the Commissioner.

Publication of list of companies.

17. The Commissioner shall cause to be published in the Gazette in the month of April in each year a list of all chit fund companies to which licences have been issued under this Act.

Part IV chit funds—general provisions

Prohibition of chit funds conducted in contravention of this Act.

18. Any person who promotes or conducts, or aids, assists, or takes any part in the promotion or conduct of any chit fund otherwise than in accordance with the provisions of this Act shall be guilty of an offence under this Act and shall be liable on conviction 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.

When scheme or arrangement deemed to be a chit fund.

19. Any scheme or arrangement which is based wholly on the essential terms and conditions set out in section 24 of this Act or has all the attributes and incidents of a chit fund within the scope and intent of that section shall, notwithstanding that it is called by any other name, be deemed to be a chit fund for the purposes of this Act.

A scheme or arrangement which is deemed only to partake of the nature of a chit fund prohibited.

20. (1) Every scheme or arrangement by whatever name called which is not based wholly on the essential terms and conditions set out in section 24 of this Act or which is based on terms and conditions inconsistent wholly or in part with those essential terms and conditions, shall for the purposes of this Act be deemed only to partake of the nature of a chit fund.

(2) Regulations made under this Act may describe or define what schemes or arrangements shall be deemed only to partake of the nature of a chit fund for the purposes of this section.

(3) Any person who promotes or conducts, or aids, assists, or takes any part in the promotion or conduct of any scheme or arrangement which only partakes of the nature of a chit fund within the meaning of this Act shall be guilty of an offence under this Act and shall be liable on conviction 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.

(4) No right or claim under any scheme or arrangement which only partakes of the nature of a chit fund within the meaning of this Act or regulations made thereunder shall, without prejudice to the provisions of subsection (1) of this section, be enforceable by action in any court.

Security.

21. The licensing of any company under this Act shall not be regarded as authorising the promotion or formation of any chit fund or the acceptance by that company of any instalment or interest from any subscriber until such security as is provided in regulations made under this Act in respect of that chit fund has been deposited by the chit fund company in accordance with those regulations.

Receipt of contributions.

22. A chit fund company may receive contributions due from intending subscribers at the time of the signing of the agreement pursuant to subsection (3) of section 24 of this Act but if within fourteen days after the expiration of one month of the signing of the agreement the chit fund does not commence, the contributions received shall be returned to the subscribers.

Part V. Reserve Fund, Dividends, Balance Sheet, Information and Regulation of Business

Maintenance of reserve funds.

44. (1) Every chit fund company shall maintain a reserve fund.

(2) At the end of each financial year the net profit of each chit fund company shall be determined after allowing for taxation, and after making provision for bad or doubtful debts.

(3) Such part of the net profits as is specified in this subsection shall be transferred to the reserve fund at the end of each financial year, as follows:

• (a) where the reserve fund is two hundred per centum or more of the paid-up capital, a sum of not less than five per centum of such net profits;

• (b) where the reserve fund is not less than one hundred per centum but less than two hundred per centum of the paid-up capital, a sum of not less than fifteen per centum of such net profits;

• (c) where the reserve fund is less than one hundred per centum of the paid-up capital, a sum of not less than thirty per centum of such net profits.

Bad and doubtful debts.

45. Every chit fund company shall, before the profit and loss account and balance sheet are made out, take steps to ensure that all bad debts have been written off and make adequate provision for doubtful debts.

Restriction on payment of dividends by chit fund companies.

46. No chit fund company shall pay any dividend on shares, until all its capitalized expenditure (including preliminary expenses, organisation expenses, share selling, commission, brokerage, amount of losses incurred and any item of expenditure not represented by tangible assets) has been completely written off.

Exhibition of audited balance-sheet.

47. Every chit fund company shall exhibit throughout the year in a conspicuous position in every office and branch of that chit fund company, a copy of its last audited balance-sheet and profit and loss account together with the full and correct names of all persons who are directors of the chit fund company, as soon as such balance-sheet is audited.

Information and statistics to be furnished by chit fund companies.

48. (1) Every chit fund company shall furnish to the Commissioner, at such time and in such manner as the Commissioner may prescribe, all such information and data as he may reasonably require for the proper discharge of his functions under the provisions of this Act.

(2) Every chit fund company that fails or neglects to furnish any information required by the Commissioner under subsection (1) of this section, and within the time specified by the Commissioner, shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding one thousand dollars for every day during which the default continues.

Part VI. Inspection of Chit Fund Companies

Inspection and investigation of chit fund companies and production of books, etc.

49. (1) The Commissioner may, from time to time, inspect or cause to be inspected under conditions of secrecy, the books, accounts and transactions of any chit fund company.

(2) The Minister may at any time direct the Commissioner to make an investigation, under conditions of secrecy, of the books, accounts and transactions of a chit fund company, if he has reason to believe that such chit fund company is carrying on its business in a manner detrimental to the interests of its subscribers and other creditors or has insufficient assets to cover its liabilities to the public, or is contravening the provisions of this Act or the regulations made thereunder.

(3) The Commissioner may appoint any auditor, other than the auditor appointed by the chit fund company under the provisions of section 172 of the Companies Act, to exercise the powers of the Commissioner under subsections (1) and (2) of this section.

(4) For the purpose of an inspection or investigation under this section, a chit fund company shall afford the Commissioner 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 that chit fund company.

(5) If any book, account or document or information is not supplied in accordance with subsection (4) of this section, the chit fund company concerned shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding two thousand dollars and to a further fine of two hundred and fifty dollars for every day during which the default continues after conviction.

Powers of the Commissioner to issue orders after an inspection.

50. (1) If the Commissioner finds upon an inspection under section 49 of this Act that the affairs of a chit fund company are being conducted in a manner likely to be detrimental to the interests of the subscribers or prejudicial to the interests of the chit fund company, the Commissioner may by order require the chit fund company to take such corrective action as the Commissioner considers to be necessary or require the chit fund company to discontinue such practices or procedures.

(2) No order shall be issued under subsection (1) of this section unless the chit fund company has been given a reasonable opportunity to present its views to the Commissioner.

(3) The Commissioner may, upon representation being made to him, or on his own motion, modify or cancel any order issued under subsection (1) of this section and, in so modifying or cancelling any order, may impose such conditions as he thinks fit.

Part VII. Miscellaneous Provisions

Recovery of fees, expenses, etc.

51. There shall be recoverable as a civil debt due to the Government from the chit fund company concerned the amount of any fees payable under this Act or any regulations made thereunder.

Exemption.

52. Notwithstanding any of the provisions of this Act, the Commissioner may, with the approval of the Minister, exempt any chit fund company from any or all of the provisions of this Act.

Winding up provisions.

53. (1) Without prejudice to the provisions of the Companies Act—

• (a) a chit fund company (whether or not it is being wound up voluntarily) may be wound up under an order of the court on the petition of the Minister; and

• (b) the court may order the winding up of a chit fund company if—

  • (i) that company has held a licence under this Act and that licence has expired or has been revoked;

  • (ii) that company has been declared insolvent;

  • (iii) that company has carried on chit fund business in Singapore in contravention of the provisions of this Act.

(2) In the winding up of a chit fund company that has been carrying on chit fund business, every subscriber who has not purchased a chit fund amount shall be entitled to recover his contribution in the manner set out in subsection (2) of section 40 of this Act.

Redemption of securities held by chit fund company.

54. (1) As soon as practicable after the making of an order for the winding up of a chit fund company, the liquidator of such company shall publish in the Gazette a notice requiring every debtor of the chit fund company to redeem any property he has deposited with the company as security for any loan that he has obtained from the chit fund company, and shall also send by registered post such notice to every debtor whose security is held by the chit fund company and whose name is mentioned in the statement of affairs made out under section 234 of the Companies Act.

(2) The notice shall specify the latest date up to which any security may be redeemed, which date shall not be less than three months from the date of the notice.

(3) After the latest date for redeeming any security held by the chit fund company specified in the notice, the liquidator may proceed to realise any security held by the chit fund company forthwith, notwithstanding any agreement setting out any other period of redemption previously entered into between the chit fund company and the debtor.

Operation of Act not to affect certain Acts.

55. (1) Nothing in this Act shall affect the operation of the Companies Act, and any company that is liable to be incorporated under that Act shall continue to be so liable as if this Act had not been passed but in case of conflict between that Act and this Act the provisions of this Act shall prevail, unless otherwise provided in this Act.

(2) Nothing in this Act shall, unless it is expressly provided to the contrary, affect the operation of any written law relating to moneylending, finance companies, banking or insurance or the liability of any chit fund company under any such law.

General penalty.

56. Any chit fund company which, or any person who being a director, officer, employee or agent of a chit fund company, contravenes or fails to comply with any of the provisions of this Act for which no penalty is expressly provided shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five thousand dollars.

Offences triable in District Court.

57. Notwithstanding the provisions of any other written law, offences under this Act or any regulations made thereunder may be tried in a District Court which shall have the power to impose the maximum penalty prescribed for any offence under this Act.

Consent of the Attorney-General.

58. No prosecution in respect of any offence under this Act or the regulations made thereunder shall be instituted except with the consent of the Attorney-General.

Offences by directors, managing directors or managers.

59. (1) Any person who, being a director, managing director or manager of a chit fund company—

• (a) fails to comply or take all reasonable steps to secure compliance by the chit fund company with the provisions of this Act or any other written law relating to chit fund companies in Singapore; or

• (b) fails to ensure or to take all reasonable steps to ensure the accuracy and correctness of any statement or information submitted under this Act or of any other written law relating to chit fund companies in force in Singapore,

shall be guilty of an offence under this Act and shall, in respect of each offence, be liable on conviction 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.

(2) In any proceedings against a person under subsection (1) of this section it shall be a defence to prove that he had reasonable grounds to believe and did in fact believe that a competent and reliable person was charged with the duty of securing compliance with the provisions of those laws or with the duty of ensuring that those statements were accurate and that that person was in a position to discharge that duty.

(3) A person shall not be sentenced to imprisonment for any offence under subsection (1) of this section unless, in the opinion of the court, he committed the offence wilfully.

Holding out as chit fund company.

60. Where any public or private company or firm holds itself out to be a licensed chit fund company when it is not licensed under this Act, such company or firm shall be guilty of an offence under this Act, and every director, manager or every officer of such company or the proprietor, partner or officer of such firm shall, unless he proves that such holding out by the company or firm was made without his knowledge or consent, be guilty of an offence under this Act and shall be liable on conviction to imprisonment for a term not exceeding two years or to a fine not exceeding four thousand dollars or to both such imprisonment and fine.

Regulations.

61. (1) The Commissioner may, with the approval of the Minister, from time to time make all such regulations for, or in respect of, every purpose which is deemed to him necessary for carrying out the provisions of this Act and for the prescribing of any matter which is authorised or required under this Act to be so prescribed.

(2) In particular and without prejudice to the generality of the powers conferred by subsection (1) of this section, the Commissioner may, with the approval of the Minister, by such regulations—

• (a) prescribe fees to be charged under this Act;

• (b) prescribe the procedure to be adopted in registering the agreement or any other document or filing any document;

• (c) prescribe the accounts or books to be kept and the forms to be used by the chit fund company in any case where express provision is not made by this Act; and for providing for the periodical inspection of such accounts or books by the Commissioner or by an officer authorised by the Commissioner;

• (d) prescribe the periods during which the several documents registered or filed in the office of the Commissioner shall be preserved, and the method of disposal of such documents at the end of those periods;

• (e) prescribe in the agreement the duration of a chit fund, the highest rebate to be offered, the latest date on which contributions are to be paid and the nature of the security to be given to the chit fund company by the purchaser of the prize and the amount of the commission that may be charged by a chit fund company;

• (f) prescribe the security to be given by the chit fund company for the discharge of its liabilities under the agreement and the place where such security shall be lodged;

• (g) prescribe the total value of chit funds to be conducted at any one time by a chit fund company in relation to the paid-up capital of that company;

• (h) prescribe additional essential terms and conditions or modify or amend existing terms and conditions under section 24 of this Act;

• (i) regulate advertisements of chit fund companies;

• (j) vary the security to be furnished by the chit fund company or the subscriber, as the case may be;

• (k) prescribe the rights, obligations, duties and liabilities of subscribers and the chit fund company.

(3) Every chit fund company which contravenes the regulations made pursuant to subsection (1) of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding two thousand dollars.

Part VIII. Transitional Provisions

Transitional licensing provisions.

62. (1) Notwithstanding the provisions of section 4 of this Act, any public or private company which on the 1st day of October, 1971, was carrying on chit fund business in Singapore may, within one month after the date of the coming into operation of this Act, apply for a licence and shall be granted a licence by the Commissioner which shall be valid up to and including the 30th day of June, 1972.

(2) Thereafter, such licence may be renewed for such further period, or periods, as the Commissioner may decide and be subject to such conditions as he may impose.

(3) A private company which has been granted a licence under subsection (1) of this section shall not be entitled to claim to be an exempt private company under the Companies Act.

Firms or associations that have been carrying on chit fund business.

63. (1) Notwithstanding section 4 of this Act, any firm, association or body of persons that has been carrying on chit fund business in Singapore before the 1st day of October, 1971, may apply for and may be granted a licence if such firm, association or body of persons, as the case may be, incorporates itself as a public company within three months of the date of the coming into operation of this Act.

(2) A licence granted under subsection (1) of this section shall be valid for such period as the Commissioner may decide and be subject to such conditions as the Commissioner may impose.

Part I. Preliminary

Short title and commencement

1. This Act may be cited as the Post Office Savings Bank of Short title Singapore Act, 1971, and shall come into operation on such date as the Minister may, by notification in the Gazette, appoint.

Interpretation.

2. In this Act, unless the context otherwise requires—

“Bank” means the Post Office Savings Bank of Singapore established under section 3 of this Act;

“Board” means the Board of Directors referred to in section 7 of this Act;

“Chairman” means the Chairman appointed by the Minister under section 8 of this Act;

“director” means a director appointed under subsection (1) of section 7 of this Act and includes the Chairman;

“General Manager” means the General Manager appointed under section 17 of this Act and includes any person appointed to act as General Manager;

“guardian” means the father of a minor, or if the father is dead, the mother, or if both parents are dead or absent from Singapore or are incapable of acting owing to disability or other cause and no guardian of the minor has been appointed by will or deed or under any other written law for the time being in force or by any competent court, any adult person with whom the minor is residing and by whom he is being maintained;

“minor” means a person who has not attained the age of eighteen years.

Part II. Establishment, Incorporation, Function, Powers and Constitution of the Bank

Establishment and incorporation of the Bank.

3. There is hereby established a body to be known as the “Post Office Savings Bank of Singapore” which shall be a body corporate with perpetual succession, and with power to sue and be sued in its corporate name and to perform such other acts as bodies corporate may by law perform, and to exercise such other powers as are conferred under or by virtue of this Act.

Objects of the Bank.

4. The principal objects of the Bank shall be—

• (a) to provide means for the deposit of savings and to encourage thrift;

• (b) to mobilise domestic savings for the purpose of public development; and

• (c) to take over the functions and duties of the Post Office Savings Bank established under the Post Office Savings Bank Act and to continue to carry on its business in Singapore and elsewhere.

Powers of the Bank.

5. For the purpose of carrying out the objects set out in section 4 of this Act, the Bank may—

• (a) receive deposits that are repayable either on demand or otherwise;

• (b) advance and lend money to, or give a guarantee for the benefit of, any person having an account with the Bank;

• (c) construct, manufacture, produce, purchase, take on hire or hire-purchase, install, maintain and repair anything required for the purposes of its business;

• (d) enter into and carry out agreements with any person (including the Government) for the carrying on by him, whether as agent or otherwise, of any of the activities which the Bank may carry on or for the carrying on jointly by him and the Bank of any of those activities;

• (e) acquire land which is required by it for, or in connection with, the exercise of its powers or as to which it can reasonably be foreseen that it will be so required;

• (f) dispose (whether absolutely or for a term of years) of any part of its undertaking or any property which in its opinion is not required by it for or in connection with the exercise of its powers, and in particular, to dispose of an interest in, or right over, any property which, subject to that interest or right, is retained by it;

• (g) for the purposes of its business subscribe for or acquire any of the securities of an incorporated company or other body corporate, procure its admission to membership of an incorporated company limited by guarantee and not having a share capital, promote the formation of an incorporated company or participate in the promotion of such a company or acquire in² an undertaking or part of an undertaking;

• (h) do anything for the purpose of advancing the skill of persons employed by it or that of persons who, though not so employed are engaging themselves, or have it in contemplation to engage themselves, in work of a kind in the case of which it has or may have a direct or indirect concern in the products thereof;

• (i) provide houses, hostels and other like accommodation for persons engaged in its business;

• (j) make loans to persons employed by it (including, in particular, loans to assist them to acquire housing accommodation), and guarantee loans made to persons so employed (including, in particular, loans made by building societies and other bodies for housing purposes);

• (k) promote recreational activities for, and activities conducive to the welfare of, persons who are, or have been, engaged in its business and the families of such persons and assist the promotion by others of such activities; and

• (l) do all such other things as are incidental or conducive to the attainment of its object.

Common seal.

6. (1) The Bank shall have a common seal and such seal may, from time to time, be broken, changed, altered and made anew as to the Bank seems fit,³ and, until a seal is provided under this section, a stamp bearing the inscription “Post Office Savings Bank of Singapore” may be used as the common seal.

(2) All deeds, documents and other instruments requiring the seal of the Bank shall be sealed with the common seal of the Bank by authority of the directors in the presence of the General Manager and of some other person duly authorised by the directors to act in that behalf and shall be signed by the General Manager and by such duly authorised person, and such signing shall be sufficient evidence that the common seal of the Bank has been duly and properly affixed and that the said seal is the lawful common seal of the Bank.

(3) The directors may by resolution or otherwise appoint an officer of the Bank or any other agent either generally or in a particular case to execute or sign on behalf of the Bank any agreement or other instrument not under seal in relation to any matter coming within the powers of the Bank.

(4) The provisions of section 12 of the Registration of Deeds Act shall not apply to any instrument purporting to have been executed under the provisions of subsection (2) of this section.

Board of Directors.

7. (1) The management of the Bank and of its properties and its business shall be vested in a Board of Directors consisting of not less than five and not more than eight directors who shall be appointed by the Minister.

(2) The directors shall hold office for a term not exceeding three years and shall be eligible for re-appointment.

(3) The Minister may at any time revoke the appointment of any director.

(4) Any director may, with the approval of the Minister, resign from his office.

Chairman.

8. (1) The Minister shall appoint one of the directors to be Chairman of the Board.

(2) The Minister may appoint any director to act as temporary Chairman during the temporary absence from Singapore, or during the temporary incapacity owing to illness or otherwise, of the Chairman.

Salaries, fees and allowances payable to directors.

9. There shall be paid to the Chairman and other directors, out of the funds of the Bank, such salaries, fees and allowances as the Minister may, from time to time, determine.

Vacation of office of director.

10. The office of director shall be vacated if the director—

• (a) becomes of unsound mind;

• (b) becomes a bankrupt or suspends payment to, or makes any arrangement or composition with, his creditors;

• (c) has been absent for more than three consecutive meetings of the directors without permission of the directors;

• (d) resigns from his office; or

• (e) is convicted of an offence involving dishonesty or fraud or moral turpitude.

Filling of vacancies in the office of director.

11. If any director dies or has his appointment revoked or otherwise vacates his office before the expiry of the term for which he has been appointed, another person may be appointed by the Minister for the unexpired period of the term of office of the director in whose place he is appointed.

Meetings of directors.

12. (1) The Chairman shall summon meetings as often as may be required but not less frequently than once in three months.

(2) At every meeting of the Board, a quorum shall consist of four directors, and decisions shall be adopted by a simple majority of the votes of the directors present and voting except in the case of an equality of votes the Chairman shall have a casting vote.⁴

(3) The Chairman, or in his absence such director as the directors present shall select, shall preside at meetings of the Board.

(4) Subject to the provisions of subsection (2) of this section, the Board shall not be precluded from holding any meeting or acting in any matter merely by reason of any vacancy in its membership.

(5) Subject to the provisions of this Act, the Board may make standing orders to regulate its own procedure, and in particular, the holding of meetings, the notice to be given of such meetings, the proceedings thereat, the keeping of minutes and the custody, production and inspection of such minutes.

Director’s interest in contract to be made known.

13. (1) A director who is directly or indirectly interested in a contract made, or proposed to be made, by the Bank shall disclose the nature of his interest at the first meeting of the Board at which he is present after the relevant facts have come to his knowledge.

(2) A disclosure under subsection (1) of this section shall be recorded in the minutes of the Board and, after the disclosure, the director—

• (a) shall not take part in any deliberation or decision of the Board with respect to that contract; and

• (b) shall be disregarded for the purpose of constituting a quorum of the Board for any such deliberation or decision.

(3) No act or proceeding of the Board shall be questioned on the ground that a director has contravened the provisions of this section.

Validity of acts of directors.

14. The acts of a director shall be valid notwithstanding any defect that may afterwards be discovered in his appointment or qualifications.

Secrecy.

15. (1) No director, officer, employee or agent of the Bank shall disclose to any person any information relating to the affairs of the Bank or of any person or customer of the Bank which he has acquired in the performance of his duties or the exercise of his functions:

Provided that nothing in this section shall be deemed to limit any power conferred upon the Supreme Court or a Judge thereof by the Evidence Act or to prohibit obedience to an order made under that Act or any such law.

(2) Any person who contravenes the provisions of subsection (1) of this section shall be guilty of an offence under this Act and shall be liable on conviction 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.

Directions by the Minister.

16. (1) The Minister may, after consultation with the Bank, give such general directions, not inconsistent with the provisions of this Act, as to the policy to be followed by the Bank in the exercise and performance of its powers, functions and duties under this Act as appear to the Minister to be necessary and the Bank shall, as soon as possible, give effect to any such direction.

(2) The Bank shall furnish the Minister with information with respect to its properties and activities in such manner and at such times as he may require.

Part III. Provisions Relating to Staff, Transfer of Employees, etc.

Appointment of General Manager.

17. (1) The Bank shall, with the approval of the Minister, appoint a General Manager on such terms and conditions as the Bank may think fit.

(2) The General Manager shall—

• (a) be the chief executive officer of the Bank;

• (b) be responsible to the Board for the proper administration and management of the Bank in accordance with the policy laid down by the Board; and

• (c) not be removed from office without the consent of the Minister.

(3) The Minister shall consult the Public Service Commission before granting his approval under subsection (1) of this section or before giving his consent under paragraph (c) of subsection (2) of this section.

(4) If the General Manager is temporarily absent from Singapore or temporarily incapacitated by reason of illness or for other reasons temporarily unable to perform his duties, another person may be appointed by the Bank to act in the place of the General Manager during any such period of absence from duty.

List of posts and appointment of employees.

18. (1) The Bank may from time to time approve a list of posts which it thinks necessary for the purposes of this Act and may add to or amend that list. The first such list of posts shall contain posts for all the persons transferred to the service of the Bank under section 19 of this Act.

(2) No person may be employed by the Bank unless he holds a post appearing in the list of posts for the time being in force.

(3) Subject to the provisions of this section—

• (a) appointments and promotions to all posts shall be made by the Bank; and

• (b) the termination of appointment, dismissal, and disciplinary control of the employees of the Bank shall be vested in the Bank.

(4) Notwithstanding the provisions of this section, the Bank may appoint persons temporarily to posts in the list of posts for the time being in force.

(5) The Bank may make rules, not inconsistent with the provisions of this Act or of any other written law, for the appointment, promotion, disciplinary control and terms and conditions of service of all persons employed by the Bank.

(6) Without prejudice to the generality of subsection (5) of this section, the Bank shall prescribe the rates of remuneration payable to persons employed by the Bank, and no person so employed shall be paid otherwise than in accordance with such rates.

Transfer of employees.

19. (1) Upon the date of the coming into operation of this Act, such persons as the Minister may decide who were employed by the Government immediately prior to the date of the coming into operation of this Act and were exercising any of the powers or were discharging any of the functions or duties vested in the Bank by this Act, shall be deemed to be transferred to the service of the Bank on terms not less favourable than those they enjoyed immediately prior to their transfer and such terms (which shall be determined by the Bank) shall take into account the salaries and conditions of service including accrued rights to leave, enjoyed by them while in the employment of the Government.

(2) Notwithstanding the provisions of subsection (1) of this section, the persons who are to be transferred to the service of the Bank, with the exception of persons holding such grades as the Minister may determine, shall as soon as practicable be given the option of remaining in the service of the Government.

Pension schemes, provident fund, etc.

20. (1) The Bank may, with the approval of the Minister, make rules for the establishment of a scheme or schemes for the payment of pensions, gratuities, provident fund or other superannuation benefits to such employees or classes of employees of the Bank as it may determine, or to their legal personal representatives or dependents, on the death or retirement of such employees from the service of the Bank or on their otherwise leaving the service of the Bank.

(2) The following provisions shall apply to any scheme established under subsection (1) of this section:

• (a) no assurance on the life of any contributor under any such scheme, and no moneys or other benefits payable under any such assurance, and no payment made under any such scheme to any person who has been employed by the Bank, shall be assignable or transferable, or liable to be garnished, attached, sequestered or levied upon for or in respect of any debt or claim whatsoever, other than a debt due to the Bank or to the Government;

• (b) no donation by the Bank or contribution by its officers made under any such scheme and no interest thereon shall be assignable or transferable or liable to be attached, sequestered or levied upon for or in respect of any debt or claim whatsoever other than a debt due to the Bank or to the Government;

• (c) no such donation, contribution or interest shall be subject to the debts of the contributor, nor shall such donation, contribution or interest pass to the Official Assignee on the bankruptcy of such contributor, but, if such contributor is adjudicated a bankrupt or is declared insolvent by a court, such donation, contribution or interest shall, subject to the provisions of this Act, be deemed to be subject to a trust in favour of the persons entitled thereto on the death of the contributor;

• (d) the bankruptcy of a contributor shall not affect the making of deductions from the salary of the contributor in accordance with any such scheme, but such deductions shall continue to be made notwithstanding the provisions of any written law, and the portion of salary so deducted shall not be deemed to form part of his after-acquired property;

• (e) subject to the provisions of any such scheme, all moneys paid or payable under any such scheme on the death of a contributor shall be deemed to be subject to a trust in favour of the persons entitled thereto under the will or intestacy of such deceased contributor, or under a nomination in such form as may be prescribed in such scheme, and shall not be deemed to form part of his estate or be subject to the payment of his debts but shall be deemed to be property passing on his death for the purposes of the Estate Duty Act;

• (f) any contributor may by a memorandum under his hand appoint a trustee or trustees of the moneys payable on his death out of any such scheme and may make provision for the appointment of a new trustee or new trustees of such moneys and for the investment thereof; such memorandum shall be in the form prescribed in such scheme and shall be deposited with the Bank;

• (g) if at the time of the death of any contributor or at any time afterwards, there is no trustee of such moneys or it is expedient to appoint a new trustee or new trustees, then and in any such case a trustee or trustees or a new trustee or trustees may be appointed by the Supreme Court or a Judge thereof; and

• (h) the receipt of a trustee or trustees duly appointed, or in default of any such appointment and of written notice thereof to the Bank, the receipt of the legal personal representative of a deceased contributor shall be a discharge to the Bank for any moneys payable on his death out of any such scheme.

(3) The Bank in making rules under subsection (1) of this section relating to any pension, provident fund or other superannuation benefits which affect any person transferred to the service of the Bank under section 19 of this Act shall in such rules provide for the payment to such persons or their dependants of benefits not less in value than the amount of any pension, provident fund, gratuity or allowance for which such persons would have been eligible under the Pensions Act, had they continued in the service of the Government and any such rule relating to length of service of persons shall provide for the recognition as service under the Bank by persons so transferred of service by them under the Government.

(4) Nothing in the rules to be made under subsection (1) of this section shall adversely affect the conditions that would have been applicable to persons transferred to the service of the Bank from their service with the Government as regards any pension, gratuity or allowance payable under the Pensions Act.

(5) Where any person in the service of the Bank, who does not come within the scope and effect of any pension or other schemes established under this section, retires or dies in the service of the Bank or is discharged from such service, the Bank may grant to him or to such other person or persons wholly or partly dependent on him, as the Bank may think fit, such allowance or gratuity as the Bank may determine.

No entitlement in respect of abolition or re-organisation of office.

21. Notwithstanding the provisions of the Pensions Act, no person who is transferred to the service of the Bank under section 19 of this Act shall be entitled to claim any benefit under this Act on the ground that he has been retired from the service of the Government on account of abolition or re-organisation of office.

Remuneration not to be related to profits.

22. No salary, fee, wage or other remuneration or allowance paid by the Bank to any director, officer, employee or agent shall be computed by reference to the profits of the Bank.

Public servants.

23. The directors and the officers and employees of the Bank of every description shall be deemed to be public servants within the meaning of the Penal Code.

Part IV. Provisions Relating to the Carrying On of the Business of the Bank

Transfer of the business, etc., of the Post Office Savings Bank.

24. Upon the date of the coming into operation of this Act, all movable properties, assets, privileges, debts, liabilities and obligations vested in or belonging to, and all other business transacted by, the Post Office Savings Bank established under the Post Office Savings Bank Act shall be transferred to and vest in the Bank without further assurance and its business shall be carried on by the Bank.

Deposits and repayment.

25. Deposits of money to be paid into the Bank shall be received and repaid under such conditions as may be prescribed by the Bank.

Security of Government.

26. The repayment of all moneys deposited in the Bank together with interest thereon is guaranteed by the Government and accordingly, if at any time the assets of the Bank shall be insufficient to pay the lawful claims of every depositor, such deficiency shall be charged and paid out of the Consolidated Fund and the Minister for Finance shall certify such deficiency to Parliament without delay.

Interest rates.

27. Interest on savings and time deposit accounts shall be payable at such rate or rates as may from time to time be prescribed by the Bank with the approval of the Minister.

Service charge.

28. The Bank may levy a charge for any service rendered to its customers.

Interest on loans.

29. The Bank may charge interest on loans given to persons having an account at the Bank at such rate or rates as may from time to time be prescribed by the Bank with the approval of the Minister.

Attachment of deposits.

30. No deposit in the Bank, and no interest on any such deposit, shall be attached, sequestered or levied upon for or in respect of any debt or claim whatsoever:

Provided that—

• (a) upon notice of a claim under a judgment of any court, it shall be lawful for the General Manager in his discretion to retain in the account a sum sufficient to answer such claim and to pay into the court on its order the amount of such claim or the total amount of the deposits and interest in the account if the claim be for a greater sum; and

• (b) a court shall only make an order under this section if it is satisfied that the judgment debtor has an account for his own sole benefit with the Bank.

Power to administer oath.

31. (1) For the purpose of obtaining proof of the death of a customer of the Bank or of ascertaining the proper person to receive moneys standing in the name of a minor, person of unsound mind or deceased person, the General Manager, or such other officer as the General Manager shall appoint for that purpose, may take evidence on oath or affirmation according to law.

(2) Any person who upon such oath or affirmation makes any statement that is false, and which he either knows or believes to be false, or does not know to be true, shall be deemed to be guilty of an offence under section 193 of the Penal Code.

Power to appoint attorney.

32. The Bank may, by instrument under its common seal, appoint a person (whether in Singapore or in a place outside Singapore) to be its attorney, and the person so appointed may, subject to the provisions of the instrument, do any act or execute any power or function which he is authorised by the instrument to do or execute.

Settlement of disputes.

33. (1) If a dispute arises between the Bank and—

• (a) any customer of the Bank;

• (b) a person who claims to be the legal personal representative or next of kin or creditor of a customer of the Bank, or the assignee of a customer who is bankrupt or insolvent; or

• (c) a person who claims to be entitled to money deposited in the Bank,

the matter shall be referred to an arbitrator to be appointed by the Minister, and whatever award, order or determination made by such arbitrator shall be binding and conclusive on all parties and shall be final to all intents and purposes without any appeal.

(2) Upon a reference under this section, an arbitrator may inspect any book belonging to the Bank, relating to the matter in dispute, and may administer an oath or affirmation to any witness appearing before him.

Part V. Financial Provisions

Bank’s financial year.

34. The financial year of the Bank shall begin on the 1st day of January and end on the 31st day of December of each year:

Provided that for the years 1971 and 1972 the financial year shall begin on the date of the establishment of the Bank and shall end on the 31st day of December, 1972.

Expenses.

35. All expenses incurred for carrying out the purposes of this Act shall be met from the funds of the Bank.

Estimates.

36. (1) The Bank shall in every year cause to be prepared and adopt annual estimates of income and expenditure of the Bank for the ensuing year.

(2) Supplementary estimates may be adopted by the Bank.

(3) A copy of all annual and supplementary estimates shall, upon their adoption by the Bank, be sent forthwith to the Minister who may approve or disallow any item or portion of any item shown in the estimates, and shall return the estimates as amended by him to the Bank and the Bank shall be bound thereby.

(4) The estimates as approved by the Minister shall be published in the Gazette.

General reserve fund.

37. The balance of the revenue of the Bank in any financial year after deducting the expenses incurred for carrying out the purposes of this Act and such sums as the Bank may think fit in respect of bad debts, depreciation of assets and other contingencies shall be applied for the creation of a general reserve fund or such other reserves or other capital fund as the Bank may deem appropriate.

Loans.

38. The Bank may, from time to time, for the purposes of this Act, raise loans from the Government or with the consent of the Minister, from any source either by the creation and issue of debentures, stocks or bonds, or otherwise, as the Minister may direct.

Investment of funds

39. (1) Subject to the provisions of this Act, moneys in the Bank shall, as far as practicable and except for such sums as may be assigned to be kept in hand for the general purposes of the Bank, be invested in such stocks, funds and securities or such other investments as the Minister for Finance may from time to time approve.

(2) Any sum of money that may from time to time be required for the repayment of deposits in the Bank or for the payment of interest thereon or expenses incurred in the execution of this Act, may be raised by the sale of the whole or a part of such securities:

Provided that any sum of money which may be required for the purposes aforesaid may, with the approval of the Minister for Finance, be advanced to the Bank by the Accountant-General out of the Consolidated Fund until they can be raised by the sale of such securities, and the Bank shall pay all interest due on such advances.

Accounts.

40. (1) The Bank shall cause proper accounts and other records in relation thereto to be kept, and an annual statement of accounts to be prepared in respect of each financial year.

(2) The annual statement of accounts of the Bank shall present a true and fair view of the financial position of the Bank and of the results, for the year to which it relates, and the operations of the Bank.

(3) All such accounts shall be submitted for audit not later than the 30th day of April in every year.

Audit.

41. (1) The Minister shall nominate in each year the Auditor-General or a company auditor (hereinafter in this Act referred to as “the Auditor”) to audit the accounts of the Bank.

(2) The Auditor shall be paid out of the revenue of the Bank such remuneration, expenses or fees as the Minister, after consultation with the Bank, shall direct.

(3) For the purpose of any audit of accounts under this Act, the Auditor may by notice in writing require the production before him of any book, deed, contract, account, voucher or other document which he may deem necessary, and may require any person holding or accountable for any such document to appear before him and make and sign a declaration with respect thereto and may require from any person such information or explanation as he deems necessary.

(4) Any person who, being required by the Auditor under subsection (3) of this section to produce any document or to appear before him and make and sign a declaration or to furnish information or explanation, fails without reasonable excuse to comply with such requisition, shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding two hundred dollars, and in the case of continuing failure to a fine not exceeding one hundred dollars for each day after the first day during which such failure continues.

Auditor’s report.

42. The Auditor shall, as soon as practicable and not later than three months after the accounts have been submitted for audit, send an annual report of his audit to the Bank. He shall also submit such periodical and special reports to the Minister and to the Bank as may appear to him to be necessary.

Annual statement of accounts.

43. (1) The Bank shall, within two months of the Auditor’s annual report, send to the Minister a statement of accounts and the balance-sheet in respect of the year for which the accounts were audited, signed by the Chairman and certified by the Auditor, together with a copy of the Auditor’s report of such annual accounts.

(2) The Minister shall cause a copy of the annual statement of accounts, balance-sheet and the Auditor’s annual report referred to in subsection (1) of this section to be presented to Parliament.

Annual report.

44. (1) The Bank shall, as soon as practicable after the end of each year, cause to be prepared and transmitted to the Minister a report dealing generally with the activities of the Bank during the preceding year and containing such information relating to the proceedings and policy of the Bank as the Minister may, from time to time, direct.

(2) The Minister shall cause a copy of every such report to be presented to Parliament.

Publication of annual report, etc.

45. The annual report, the annual statement of accounts and balance-sheet, together with the Auditor’s annual report, of the Bank shall be published in the Gazette.

Part VI. Miscellaneous

Exemption from stamp duty.

46. No power or letter of attorney or other such document given by a customer of the Bank authorising any person to make deposits in the Bank on behalf of the customer, or to sign any agreement or instrument required by the rules made under this Act to be signed on making such deposit, or to receive back any sum of money deposited in the Bank, or the interest arising therefrom, nor any bond, statutory declaration, or other instrument or document whatsoever required or authorised to be given, signed, made or produced in pursuance of this Act or the rules made thereunder, shall be subjected to or be charged with any stamp duty whatsoever.

Exemption.

47. The Bank shall be exempted from the provisions of the Banking Act and the Finance Companies Act.

Validity of acts and transactions of Bank.

48. The validity of an act or transaction of the Bank shall not be called in question in any court on the ground that any provision of this Act has not been complied with.

Power to make rules.

49. (1) The Bank may, with the approval of the Minister, make rules for the management and regulation of its business.

(2) In particular and without prejudice to the generality of the foregoing powers such rules may—

• (a) prescribe limits of deposits;

• (b) prescribe the modes of making deposits;

• (c) prescribe the modes of withdrawing deposits;

• (d) prescribe the amount of interest payable, and modes of calculating interest, on deposits;

• (e) prescribe the times at which deposit books shall be returned to the Bank by customers;

• (f) regulate deposits by minors, guardians, trustees, societies, bodies corporate, firms and bodies of persons acting collectively;

• (g) prescribe conditions for the withdrawal of moneys by minors, guardians, trustees, societies, bodies corporate, firms and bodies of persons acting collectively;

• (h) prescribe the modes of dealing with the accounts of deceased persons or of persons of unsound mind;

• (i) prescribe the conditions governing the sale of and repayment of gift vouchers;

• (j) prescribe the conditions upon which gift vouchers may be used for making deposits of money in the Bank;

• (k) prescribe the conditions governing the acceptance or rejection of gift vouchers for the purpose of making deposits in the Bank;

• (l) prescribe the conditions governing the operation of time deposit accounts;

• (m) prescribe the conditions upon which loans may be made to customers; and

• (n) prescribe the mode of calculating interest payable in respect of loans.