Banking Act 1979

• (5) For the purposes of sections 28 and 29 above, where two or more persons are jointly entitled to a deposit and subsection (1) above does not apply, each of them shall be treated as having a separate deposit of an amount produced by dividing the amount of the deposit to which they are jointly entitled by the number of persons who are so entitled.

• (6) The Board may decline to make any payment under section 28 above in respect of a deposit until the person claiming to be entitled to it informs the Board of the capacity in which he is entitled to the deposit; and if it appears to the Board—

• (a) that the persons entitled to a deposit are so entitled as trustees, or

• (b) that subsection (4) above applies to a deposit, or

• (c) that two or more persons are jointly entitled to a deposit otherwise than as trustees,

the Board may decline to make any payment under that section in respect of the deposit until sufficient information has been disclosed to them to enable them to determine what payment (if any) should be made under that section and to whom.

• (7) In this section " jointly entitled " means—

• (a) in England and Wales and Northern Ireland, beneficially entitled as joint tenants, tenants in common or as coparceners; and

• (b) in Scotland, beneficially entitled as joint owners or owners in common.

Liability of insolvent institutions in respect of payments made by the Board

31

• (1) This section applies where—

• (a) an institution is insolvent; and

• (b) the Board have made, or are under a liability to make, a payment under section 28 above by virtue of the institution becoming insolvent;

and in the following provisions of this section a payment falling within paragraph (b) above is referred to as an " insolvency payment" and the person to whom such a payment has been or is to be made is referred to as " the depositor ".

• (2) Where this section applies—

• (a) the institution concerned shall become liable to the Board, as in respect of a contractual debt incurred immediately before the institution became insolvent, for an amount equal to the amount of the insolvency payment;

• (b) the liability of the institution to the depositor in respect of any deposit or deposits of his (in this section referred to as " the liability to the depositor ") shall be reduced by an amount equal to the insolvency payment made or to be made to him by the Board; and

• (c) the duty of the liquidator of the insolvent institution to make payments to the Board on account of the liability referred to in paragraph (a) above (in this section referred to as " the liability to the Board ") and to the depositor on account of the liability to him (after taking account of paragraph (b) above) shall be varied in accordance with subsection (3) below.

• (3) The variation referred to in subsection (2)(c) above is as follows: —

• (a) in the first instance the liquidator shall pay to the Board instead of to the depositor any amount which, apart from this section, would be payable on account of the liability to the depositor, except in so far as that liability • relates to a secured deposit or a deposit which had an original term to maturity of more than five years or a deposit which is not a sterling deposit; and

• (b) if at any time the total amount paid to the Board by virtue of paragraph (a) above and in respect of the liability to the Board equals the amount of the insolvency payment made to the depositor, the liquidator shall thereafter pay to the depositor instead of to the Board any amount which, apart from this section, would be payable to the Board in respect of the liability to the Board.

• (4) In the case of a deposit which, for the purposes of section 30 above, is held on trust for a person absolutely entitled to it as against the trustees or, as the case may be, for two or more persons so entitled jointly, any reference in the preceding provisions of this section to the liability to the depositor shall be construed as a reference to the liability of the institution concerned to the trustees.

• (5) The Board may by notice in writing served on the liquidator of an insolvent institution require him, at such time or times and at such place as may be specified in the notice.—

• (a) to furnish to the Board such information, and

• (b) to produce to the Board such books or papers specified in the notice,

as the Board may reasonably require to enable them to carry out their functions under this Part of this Act.

• (6) Where, as a result of an institution having become insolvent, any books or papers have come into the possession of the Official Receiver or, in Northern Ireland, the official assignee for company liquidations or in bankruptcy, he shall permit any person duly authorised by the Board to inspect the books or papers for the purpose of establishing—

• (a) the identity of those of the institution's depositors to whom the Board are liable to make a payment under section 28 above ; and

• (b) the amount of the protected deposit held by each of those depositors.

• (7) Rules may be made—

• (a) for England and Wales, under section 365 of the Companies Act 1948 and section 132 of the Bankruptcy Act 1914;

• (b) for Scotland, under section 365 of the Companies Act 1948 and section 32 of the Sheriff Courts (Scotland) Act 1971; and

• (c) for Northern Ireland, under section 317 of the Companies Act (Northern Ireland) 1960 and section 55 of the Judicature (Northern Ireland) Act 1978 ;

for the purpose of integrating the procedure provided for in this section into the general procedure on winding-up or bankruptcy.

Repayments in respect of contributions

Repayments in respect of contributions

32

• (1) Any moneys received by the Board under section 31 above shall not form part of the Fund but, for the remainder of the financial year of the Board in which they are received, shall be retained and, so far as appears to the Board appropriate, shall be invested in Treasury bills payable not more than ninety-one days from the date of issue; and any income arising from moneys so invested during the remainder of the year shall be credited to the Fund.

• (2) The Board shall prepare a scheme for the making of repayments to institutions out of moneys falling within subsection (1) above in respect of—

• (a) special contributions, and

• (b) so far as they are not attributable to an increase in the size of the Fund resulting from an order under subsection (2) of section 25 above, further contributions levied under that section,

which have been made in the financial year of the Board in which the moneys were received or in any previous such financial year.

• (3) A scheme under subsection (2) above—

• (a) shall provide for the making of repayments first in respect of special contributions and then, if those contributions can be repaid in full (taking into account any previous repayments under this section and under section 26(2) above), in respect of further contributions ;

• (b) may make provision for repayments in respect of contributions made by an institution which has ceased to be a contributory institution to be made to a contributory institution which, in the opinion of the Board, is its successor ; and

• (c) subject to paragraph (b) above, may exclude from the scheme further contributions levied from institutions which have ceased to be contributory institutions.

• (4) As soon as practicable after the end of the financial year of the Board in which any moneys are received by them as mentioned in subsection (1) above, the Board shall make out of those moneys the payments required by the scheme under subsection (2) above.

• (5) If in any financial year of the Board the payments made under subsection (4) above (in that and any previous years) in pursuance of a scheme or schemes under subsection (2) above are sufficient to provide for repayment in full of all the contributions to which the scheme or, as the case may be, the schemes related, any balance remaining of the moneys received by the Board as mentioned in subsection (1) above shall be credited to the Fund.

Tax treatment of contributions and repayments

33

In computing for the purposes of the Tax Acts the profits or gains arising from the trade carried on by a contributory institution.—

• (a) to the extent that it would not be deductible apart from this subsection, any sum expended by the institution in paying a contribution to the Fund may be deducted as an expense; and

• (b) any payment which is made to the institution by the Board under section 26(2) above or pursuant to a scheme under section 32(2) above shall be treated as a trading receipt.

PART III — Advertisements and Banking Names

Advertisements for deposits

Control of advertisements for deposits

34

• (1) After consultation with the Bank, the Treasury may by regulations made by statutory instrument regulate the issue, form and content of advertisements inviting the making of deposits.

• (2) Regulations under this section may make different provision with respect to different descriptions of advertisement and different descriptions of advertisers and, in particular,—

• (a) may prohibit the issue of advertisements of, or by persons of, particular descriptions ; and

• (b) may make provision for the exclusion from all or any of the provisions of the regulations of advertisements of particular descriptions or advertisements issued by persons of particular descriptions ; and

• (c) may make provision with respect to matters which must be, as well as to matters which may not be, included in advertisements.

• (3) Any person who issues an advertisement in contravention of regulations under this section shall be liable—

• (a) on summary conviction to a fine not exceeding the statutory maximum; and

• (b) on conviction on indictment to imprisonment for a term not exceeding two years or to a fine or to both.

• (4) In this section " advertisement" includes every form of advertising, whether in a publication, by the display of notices, signs, labels, showcards or goods, by distribution of samples, by means of circulars, catalogues, price lists or other documents, by an exhibition of photographic or cinematographic films, or of pictures or models, by way of sound broadcasting or television, or in any other manner; and references to the issue of an advertisement shall be construed accordingly.

• (5) For the purposes of this section—

• (a) an advertisement issued by any person by way of display or exhibition in a public place shall be treated as issued by him on every day on which he causes or permits it to be displayed or exhibited;

• (b) an advertisement which contains information which is intended or might reasonably be presumed to be intended to lead directly or indirectly to the making of deposits shall be treated as an advertisement inviting deposits;

• (c) an advertisement issued by any person on behalf of or to the order of another person shall be treated as an advertisement issued by that other person; and

• (d) an advertisement inviting deposits with a person specified in the advertisement shall be presumed, unless the contrary is proved, to have been issued by that person.

• (6) A statutory instrument containing regulations under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Specific prohibitions etc. directed at licensed institutions

35

• (1) Subject to subsections (3) and (4) below, if the Bank considers that an advertisement for deposits issued or proposed to be issued by a licensed institution is misleading, the Bank may give the institution concerned a direction under this section.

• (2) A direction under this section shall be in writing and may contain all or any of the following, namely,—

• (a) a prohibition on the issue Of advertisements of a specified kind;

• (b) a requirement that advertisements of a particular description shall be modified in a specified manner;

• (c) a prohibition on the issue of any advertisements which are, wholly or substantially, repetitions of an advertisement which has been issued and which is identified in the direction ; and

• (d) a requirement to take all practical steps to withdraw from display in any place any advertisements or any advertisements of a particular description specified in the direction.

• (3) Not less than seven days before giving a direction under this section, the Bank shall give the institution concerned notice in writing of its intention, specifying the reasons why it proposes to act

• (4) In any case where—

• (a) the Bank has given notice under subsection (3) above, and

• (b) within the period of seven days beginning on the date on which the notice was given, written representations are made to the Bank by or on behalf of the institution concerned,

the Bank shall take those representations into account in deciding whether or not to proceed to give the direction.

• (5) A direction under this section—

• (a) may be revoked or varied by a further direction under this section; and

• (b) may be revoked by the Bank by notice in writing given to the institution concerned.

• (6) Subsections (4) and (5) of section 34 above shall apply in relation to this section as they apply in relation to that.

• (7) Any person who fails to comply with a direction under this section shall be liable—

• (a) on summary conviction to a fine not exceeding the statutory maximum; and

• (b) on conviction on indictment to imprisonment for a term not exceeding two years or to a fine or to both.

Banking names and descriptions

Restriction on use of certain names and descriptions

36

• (1) Subject to the provisions of this section and section 37 below, no person carrying on a business of any description in the United Kingdom, other than—

• (a) the Bank,

• (b) the central bank of a member State other than the United Kingdom.

• (c) a recognised bank,

• (d) a trustee savings bank,

• (e) the Central Trustee Savings Bank Limited, and

• (f) the Post Office, in the exercise of its powers to provide banking services,

may use any name or in any other way so describe himself or hold himself out as to indicate, or reasonably be understood to indicate, that he is a bank or banker or is carrying on a banking business.

• (2) Nothing in this Part of this Act or in the preceding Parts of this Act affects the determination of any question whether a licensed institution or other person is a bank or banker for purposes other than those of this Act, and accordingly nothing in subsection (1) above shall prohibit a person who is not a recognised bank from using the expression " bank " or " banker " or a similar expression with reference to himself in any case where—

• (a) he wishes to comply with or take advantage of any relevant provision of law or custom ; and

• (b) it is necessary for him to use that expression in order to be able to assert that he is complying with or entitled to take advantage of that provision.

• (3) In subsection (2) above " relevant provision of law or custom " means any enactment, any instrument made under an enactment, any international agreement, any rule of law or any commercial usage or practice which confers any benefit on, or otherwise has effect only in relation to, a person by virtue of his being a bank or banker.

• (4) Without prejudice to any provision made by virtue of section 34 above, nothing in subsection (1) above shall prohibit a licensed institution which provides at least two of the services specified in paragraph 2(2) of Schedule 2 to this Act from using the expression " banking services " in relation to any of the services provided by it except—

• (a) where the use is in such immediate conjunction with the name of the institution that the expression might reasonably be thought to form part of its name ; or

• (b) where the expression appears on any notice or sign or in other writing which is for the time being so displayed as to be visible to persons frequenting any place or building to which the public has access.

• (5) Subsection (1) above does not prohibit the use by—

• (a) a savings bank specified in subsection (6) below, or

• (b) a municipal bank, or

• (c) a body of persons certified as a school bank by either a trustee savings bank or the National Savings Bank, or a recognised bank,

of a name or description if the name contains an indication, or when the description is used it is accompanied by a statement, that the bank or body concerned is a savings bank, a municipal bank or, as the case may be, a school bank.

• (6) The savings banks referred to in subsection (5)(a) above are—

• (a) the National Savings Bank ;

• (b) any penny savings bank ;

• (c) any savings bank established before 28th July 1863 under an Act passed in the fifty-ninth year of King George the Third intituled an Act for the Protection of Banks for Savings in Scotland, which has not since become a trustee savings bank ; and

• (d) the British Railways Savings Bank established under section 32 of the British Railways Act 1966.

• (7) Subsection (1) above does not prohibit the use by—

• (a) licensed institution which is a wholly owned subsidiary (within the meaning of section 150(4) of the Companies Act 1948) of a recognised bank, or

• (b) a company which has a wholly owned subsidiary (within the meaning of that section) which is a recognised bank,

of a name which includes the name of that recognised bank for the purpose of indicating the connection between the two companies.

• (8) Subsection (1) above does not prohibit the use by a licensed institution which has its principal place of business in a country or territory outside the United Kingdom of the name under which the institution carries on business in that country or territory if the name is used in immediate conjunction with the description "licensed deposit-taker" and, where the name appears in writing, if that description is at least as prominent as the name.

• (9) Subsection (1) above does not prohibit the use by a person who carries on business at a representative office of an overseas institution of a name under which the overseas institution carries on a deposit-taking business in a country or territory outside the United Kingdom if the name is used in immediate conjunction with the description " representative office " and, where the name appears in writing, if that description is at least as prominent as the name; and in this subsection " overseas institution" and " representative office " have the same meaning as in section 40 below.

• (10) Where on an application for—

• (a) registration of a name under the Registration of Business Names Act 1916, or

• (b) the first registration of a company, or the registration of a company by a new name, under the Companies Act 1948 or the Companies Act (Northern Ireland) 1960,

it appears to the registrar concerned that the use of the name by the person seeking to register it would contravene subsection (1) above, the registration shall not be made.

• (11) A person who contravenes subsection (1) above shall be liable on summary conviction to a fine not exceeding £1,000; and where the contravention involves a public display or exhibition of the offending name, description or other matter, there shall be a fresh contravention of the subsection on each day on which that person causes or permits the display or exhibition to continue.

Transitory exceptions from section 36(1)

37

• (1) If on the appointed day an institution is carrying on a deposit-taking business in the United Kingdom, nothing in section 36(1) above shall apply to the institution at any time when, by virtue of section 2(4) above, it is not prohibited by section 1(1) above from accepting a deposit.

• (2) For a period of twelve months beginning on the appointed day, nothing in section 36(1) above shall apply to a person who on that day is carrying on in the United Kingdom a business other than a deposit-taking business.

• (3) Notwithstanding anything in section 36 above, if an institution ceases (otherwise than on becoming a recognised bank) to be entitled to the benefit of subsection (1) above, the institution shall be entitled—

• (a) to continue to use any existing registered business or company name for a period of twelve months, and

• (b) to continue to use any other description for a period of six months,

each period beginning on the date on which the institution ceased to benefit from subsection (1) above.

• (4) If, at any time when an institution or other person is entitled to use a registered business or company name by virtue only of the preceding provisions of this section, that name is changed so as to avoid any contravention of section 36(1) above, then—

• (a) throughout the period or, as the case may be, the remainder of the period of twelve months specified in subsection (2) or, as the case may be, subsection (3) above, and

• (b) for a further period of twelve months,

the institution or other person shall be entitled, in any context where it uses the new name, to include a reference to the name by which it was formerly known, together with some indication that that name is no longer in use.

• (5) Notwithstanding anything in section 36 above, if an institution ceases to be a recognised bank, the institution shall be entitled to continue to use any existing registered business or company name or any other description for a period of six months beginning on the date when it ceases to be a recognised bank.

Part IV — Miscellaneous and General

Amendments of Consumer Credit Act 1974

38

• (1) In section 74 of the Consumer Credit Act 1974 (certain agreements excluded from Part V of that Act) after subsection (3) (certain overdraft agreemnents excluded only where the Director General of Fair Trading makes a determination) there shall be inserted the following subsection:—

(3A) Notwithstanding anything in subsection (3)(b) above, in relation to a debtor-creditor agreement under which the creditor is the Bank of England or a bank within the meaning of the Bankers’ Book Evidence Act 1879, the Director shall make a determination that subsection (1)(b) above applies unless he considers that it would be against the public interest to do so

;

and in subsection (4) of that section (certain agreements in writing falling within subsection (1)(b) or (c) subject to regulations as to form and content) for “(1)(b) or (c)”, in each place where it occurs, there shall be substituted “ (1)(c) ”.

• (2) Nothing in sections 114 to 122 of the Consumer Credit Act 1974 (pledges) shall be taken to apply to bearer bonds and, accordingly, in paragraph (a) of subsection (3) of section 114 of that Act (exclusion of pledges of documents of title) after the word “title” there shall be inserted the words “ or of bearer bonds ”.

• (3) In section 185(2) of the Consumer Credit Act 1974 (which relates to dispensing notices given by one or two or more debtors to whom running-account credit is provided) at the end of the proviso there shall be added the following paragraph:—

(c) a dispensing notice which is operative in relation to an agreement shall be operative also in relation to any subsequent agreement which, in relation to the earlier agreement, is a modifying agreement

.

Fraudulent inducement to make a deposit

39

• (1) Any person who, on or after the appointed day, by any statement, promise or forecast which he knows to be misleading, false or deceptive, or by any dishonest concealment of material facts, or by the reckless making (dishonestly or otherwise) of any statement, promise or forecast which is misleading, false or deceptive, induces or attempts to induce another person—

• (a) to make a deposit with him or with any other person, or

• (b) to enter into or offer to enter into any agreement for that purpose,

shall be liable on conviction on indictment to imprisonment for a term not exceeding seven years or to a fine or both.

• (2) In subsection (1) above " deposit " does not include a loan made to an institution upon terms involving the issue of debentures or other securities but, subject to that, in its application to subsection (1) above, subsection (5) of section 1 of this Act shall have effect with the omission of paragraphs (b) to (e).

• (3) Nothing in this section shall be construed as empowering a court in Scotland, other than the High Court of Justiciary, to pass for any offence under this section a sentence of imprisonment for a term exceeding two years.

• (4) Subsections (1) to (3) above have effect in substitution for subsections (1) and (2) of section 1 of the Protection of Depositors Act 1963 or, in Northern Ireland, section 1 of the Protection of Depositors Act (Northern Ireland) 1964; and nothing in this Act shall affect any liability of any person under either of those sections in respect of anything done or omitted to be done before the appointed day.

Representative offices of overseas deposit-taking institutions

40

• (1) If, on or after the appointed day, a representative office is established in the United Kingdom by an overseas institution which does not carry on a deposit-taking business there, then, within the period of one month beginning with the date on which that office is established, the institution shall give notice in writing to the Bank of the establishment of the office.

• (2) If, before the appointed day, a representative office has been established in the United Kingdom by an overseas institution which does not carry on a deposit-taking business there, then, within the period of six months beginning with the appointed day, the institution shall give notice in writing to the Bank of the existence of the office.

• (3) Any reference in this section to an overseas institution is a reference to an institution which carries on a deposit-taking business in a country or territory outside the United Kingdom and which is either—

• (a) a body corporate formed under the law of such a country or territory, or

• (b) any other description of institution of which the principal place of business is in such a country or territory,

and in relation to such an institution any reference in this section to a representative office is a reference to premises from which the deposit-taking business of the institution or any other activity of the institution which falls within paragraph 2(2) of Schedule 2 to this Act is promoted or assisted in any way.

• (4) Where the Bank has received notice from an institution under subsection (1) or subsection (2) above, the Bank may by notice in writing given to the institution require it to furnish to the Bank, within the period of one month beginning with the date on which the notice is given,—

• (a) in the case of an institution which is required in connection with the establishment of a representative office in Great Britain after the appointed day to deliver certain documents to the Registrar of Companies under section 407(1) of the Companies Act 1948. copies of those documents; and

• (b) in the case of an institution which is not so obliged, or which has a representative office established before the appointed day, the like information as would be contained in the documents which the institution would be required to deliver as mentioned in paragraph (a) above if it were a company to which the said section 407(1) applied and had established a place of business within Great Britain immediately before the notice was given to it under this subsection.

• (5) If at any time an overseas institution which has been required to furnish information or documents under subsection (4) above—

• (a) is required to deliver a return to the Registrar of Companies under section 409 of the Companies Act 1948 containing particulars of an alteration in the matters referred to in that section (alterations of memorandum, directors, persons authorised to accept service etc.), or

• (b) is required, in connection with ceasing to have a representative office in Great Britain, to give notice to the Registrar under subsection (2) of section 413 of that Act of the fact that it has ceased to have a place of business in either part of Great Britain,

the institution shall deliver a copy of the return, or, as the case may be, shall also give notice, to the Bank; and if at any time such an institution would be required to deliver such a return or give such a notice as is mentioned in paragraph (a) or paragraph (b) above if it were a company to which the said section or subsection applied and its representative office were a place of business, it shall make such a return or give such a notice to the Bank.

• (6) Subsections (4) and (5) above shall apply in the case of a representative office established in Northern Ireland—

• (a) with the substitution for the references in those subsections to Great Britain of references to Northern Ireland, and

• (b) with the substitution for the references in those subsections to subsection (1) of section 407, section 409 and subsection (2) of section 413 of the Companies Act 1948 of references to, respectively, sections 356, 358 and 362 of the Companies Act (Northern Ireland) 1960.

• (7) An institution which fails to comply with any provision of this section shall be liable on summary conviction to a fine not exceeding £1,000.

Offences

41

• (1) Where an offence under this Act committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, any director, manager, secretary or other similar officer of the body corporate, or any person who was purporting to act in any such capacity, he, as well as the body corporate, shall be guilty of that offence and be liable to be proceeded against and punished accordingly.

• (2) Where the affairs of a body corporate are managed by its members, subsection (1) above shall apply in relation to the acts and defaults of a member in connection with his functions of management as if he were a director of the body corporate.

• (3) In any proceedings for an offence under this Act it shall be a defence for the person charged to prove that he took all reasonable precautions and exercised all due diligence to avoid the commission of such an offence by himself or any person under his control.

• (4) Without prejudice to subsection (3) above, in any proceedings for an offence under section 34 or section 36 above committed by the publication of an advertisement it shall be a defence for the person charged to prove that he is a person whose business is to publish or arrange for the publication of advertisements and that he received the advertisement for publication in the ordinary course of business and did not know and had no reason to suspect that its publication would amount to such an offence.

• (5) No proceedings for an offence under this Act shall be instituted—

• (a) in England and Wales, except by or with the consent of the Director of Public Prosecutions or the Bank; or

• (b) in Northern Ireland, except by or with the consent of the Director of Public Prosecutions for Northern Ireland or the Bank.

• (6) Summary proceedings for any offence under this Act may, without prejudice to any jurisdiction exercisable apart from this subsection, be taken against an institution, including an unincorporated institution, at any place at which it has a place of business, and against an individual at any place at which he is for the time being.

Offences committed by unincorporated institutions

42

• (1) Proceedings for an offence alleged to have been committed under this Act by an unincorporated institution shall be brought in the name of that institution (and not in that of any of its members) and, for the purposes of any such proceedings, any rules of court relating to the service of documents shall have effect as if the institution were a corporation.

• (2) A fine imposed on an unincorporated institution on its conviction of an offence under this Act shall be paid out of the funds of the institution.

• (3) Section 33 of the Criminal Justice Act 1925 and Schedule 2 to the Magistrates' Courts Act 1952 (procedure on charge of offence against a corporation) shall have effect in a case in which an unincorporated institution is charged in England or Wales with an offence under this Act in like manner as they have effect in the case of a corporation so charged.

• (4) In relation to any proceedings on indictment in Scotland for an offence alleged to have been committed under this Act by an unincorporated institution, section 74 of the Criminal Procedure (Scotland) Act 1975 (proceedings on indictment against bodies corporate) shall have effect as if the institution were a body corporate.

• (5) Section 18 of the Criminal Justice Act (Northern Ireland) 1945 and Schedule 5 to the Magistrates' Courts Act (Northern Ireland) 1964 (procedure on charge of offence against a corporation) shall have effect in a case in which an unincorporated institution is charged in Northern Ireland with an offence under this Act in like manner as they have effect in the case of a corporation so charged.

• (6) Where a partnership is guilty of an offence under this Act, every partner, other than a partner who is proved to have been ignorant of or to have attempted to prevent the commission of the offence, shall also be guilty of that offence and be liable to be proceeded against and punished accordingly.

• (7) Where any other unincorporated institution is guilty of an offence under this Act, every officer of the institution who is bound to fulfil any duty whereof the offence is a breach, or if mere is no such officer then every member of the committee or other similar governing body, other than a member who is proved to have been ignorant of or to have attempted to prevent the commission of the offence, shall also be guilty of that offence and be liable to be proceeded against and punished accordingly.

Exclusion of certain provisions relating to rehabilitation of offenders

43

• (1) Section 4(2) of the Rehabilitation of Offenders Act 1974 (questions relating to previous convictions which have become spent) shall not apply in relation to any question put to any person with respect to the previous convictions, offences, conduct or circumstances of an individual if—

• (a) the question is put by or on behalf of the Bank and the individual is a director, controller or manager of an institution which is recognised or licensed or which has made an application for recognition or a licence which has not been disposed of; or

• (b) the question is put by or on behalf of a recognised or licensed institution or an institution which has made an application for recognition or a licence which has not yet been disposed of and the individual is, or is seeking to become, a director, controller or manager of the institution.

• (2) Section 4(3)(b) of the Rehabilitation of Offenders Act 1974 (spent convictions not to be ground for dismissal etc. from offices, professions, occupations or employment) shall not—

• (a) prevent the Bank from refusing to grant a licence to an institution or from revoking a licence held by an institution on the ground that, by reason of a previous conviction, an individual is not a fit and proper person to be a director, controller or manager of title institution ; or

• (b) apply in relation to the dismissal or exclusion of an individual from being a director, controller or manager of an institution which is recognised or licensed or which has made an application for recognition or a licence which has not yet been disposed of.

• (3) For the purposes of subsections (1) and (2) above, an application by an institution is not disposed of until the decision of the Bank on the application is communicated to the institution.

• (4) In section 7(2) of the Rehabilitation of Offenders Act 1974 (exclusion of certain proceedings from the effect of rehabilitation set out in section 4(1) of that Act) at the end of paragraph (f) there shall be added the words

or, (g) in any proceedings arising out of any such decision of the Bank of England as is referred to in section 11(1) of the Banking Act 1979, including proceedings on appeal to any court

.

• (5) In the application of subsections (1) and (2) above to Northern Ireland, for the references to sections 4(2) and 4(3)(b) of the Rehabilitation of Offenders Act 1974 there shall be substituted references to Articles 5(2) and 5 (3)(b) of the Rehabilitation of Offenders (Northern Ireland) Order 1978, respectively.

• (6) In Article 8(2) of the Rehabilitation of Offenders (Northern Ireland) Order 1978 (exclusion of certain proceedings from the effect of rehabilitation set out in Article 5(1) of that Order) at the end of sub-paragraph (e) there shall be added the words

or, (f) in any proceedings arising out of any such decision of the Bank of England as is referred to in section 11(1) of the Banking Act 1979, including proceedings on appeal to any court.

.

Evidence

44

In any proceedings, a certificate purporting to be signed by the Chief Cashier or a Deputy Chief Cashier of the Bank and certifying—

• (a) that a particular institution is or is not recognised or licensed or was or was not recognised or licensed at a particular time, or

• (b) the date on which recognition or a licence was granted to a particular institution, or

• (c) the date on which an institution ceased to be recognised or to hold a licence, or a licence of a particular description, or

• (d) the nature of the licence held by a particular institution at any time and, in the case of a conditional or transitional licence, the date of its expiry,

shall be admissible in evidence and, in Scotland, shall be sufficient evidence of the facts stated in the certificate.

Service of notices

45

• (1) This section has effect in relation to any notice, directions or other document required or authorised by or under this Act to be given to or served on any person other than the Bank.

• (2) Any such document may be given to or served on the person in question—

• (a) by delivering it to him; or

• (b) by leaving it at his proper address ; or

• (c) by sending it by post to him at that address.

• (3) Any such document may,—

• (a) in the case of a body corporate, be given to or served on the secretary or clerk of that body ; and

• (b) in the case of any other description of institution, be given to or served on a controller of the institution.

• (4) For the purposes of this section and section 7 of the Interpretation Act 1978 (service of documents by post) in its application to this section, the proper address of any person to or on whom a document is to be given or served shall be his last known address, except that—

• (a) in the case of a body corporate or its secretary or clerk, it shall be the address of the registered or principal office of that body in the United Kingdom; and

• (b) in the case of any other description of institution or a person having the control or management of its business, it shall be that of the principal office of the institution in the United Kingdom.

• (5) If the person to or on whom any document mentioned in subsection (1) above is to be given or served has specified an address within the United Kingdom, other than his proper address within the meaning of subsection (4) above, as the one at which he or someone on his behalf will accept documents of the same description as that document, that address shall also be treated for the purposes of this section and section 7 of the Interpretation Act 1978 as his proper address.

Repeal of certain enactments relating to banks and banking

46

The following enactments are hereby repealed: —

• (a) section 21 of the Bank Charter Act 1844 and section 13 of the Bank Notes (Scotland) Act 1845 (which require banks to make a return to the Commissioners of Inland Revenue of the names of their principals and places of business);

• (b) in section 4(2) of the Limited Partnerships Act 1907 (which provides that a partnership registered under that Act may not have more than a certain number of partners), the words " in the case of a partnership carrying on the business of banking, of more than ten persons, and, in the case of any other partnership " ;

• (c) in section 155 of the Companies Act 1948 and section 149 of the Companies Act (Northern Ireland) 1960 (which lay down requirements as to the signature of the balance sheet of a registered company), subsection (2) (which lays down special requirements for banking companies);

• (d) section 429 of the said Act of 1948 and section 377 of the said Act of 1960 (which, subject to certain exceptions, prohibit the formation otherwise than as a registered company of a company, association or partnership of more than ten persons for the purpose of carrying on the business of banking);

• (e) section 430 of the said Act of 1948 and section 378 of the said Act of 1960 (which require banking companies proposing to become registered with limited liability to give notice to all persons having an account with them);

• (f) section 431 of the said Act of 1948 and section 379 of the said Act of 1960 (which exclude liabilities in respect of notes issued by a bank in the United Kingdom from the principle of limited liability); and

• (g) in subsection (1) of section 433 of the said Act of 1948 and section 381 of the said Act of 1960 (which require certain companies to post up in their business premises a bi-annual statement of their financial position), the words " a limited banking company or ".

Defence of contributory negligence

47

In any circumstances in which proof of absence of negligence on the part of a banker would be a defence in proceedings by reason of section 4 of the Cheques Act 1957, a defence of contributory negligence shall also be available to the banker notwithstanding the provisions of section 11(1) of the Torts (Interference with Goods) Act 1977.

Municipal banks

48

• (1) References in this Act to a municipal bank are to a company within the meaning of the Companies Act 1948 which—

• (a) carries on a deposit-taking business,

• (b) is connected with a local authority as mentioned in subsection (2) below, and

• (c) has its deposits guaranteed by that local authority in accordance with subsection (5) below.

• (2) The connection referred to in paragraph (b) of subsection (1) above between a company and a local authority is that—

• (a) the company's articles of association provide that the shares in the company are to be held only by members of the local authority ; and

• (b) substantially all the funds lent by the company are lent to the local authority.

• (3) Where on 9th November 1978 a company, or its predecessor,—

• (a) was carrying on a deposit-taking business, and

• (b) was connected with a local authority as mentioned in subsection (2) above,

that local authority or its successor may for the purposes of this Act resolve to guarantee deposits with the company.

• (4) A resolution passed by a local authority under subsection (3) above may not be rescinded.

• (5) Where a local authority has passed a resolution under subsection (3) above, that local authority and any local authority which is its successor shall be liable, if the company concerned defaults in payment, to make good to a depositor the principal and interest owing in respect of any deposit with the company, whether made before or after the passing of the resolution.

• (6) For the purposes of this section—

• (a) one company is the predecessor of another if that other succeeds to its obligations in respect of its deposit-taking business; and

• (b) one local authority is the successor of another if, as a result of, or in connection with, an order under Part IV of the Local Government Act 1972 or Part II of the Local Government (Scotland) Act 1973 (change of local government area), it becomes connected as mentioned in subsection (2) above with a company formerly so connected with that other local authority.

• (7) In the Scotland Act 1978, at the end of Part III of Schedule 10 (matters dealt with by certain enactments to be included, to the extent specified, in the groups of devolved matters) there shall be added the following entry—

The Banking Act 1979 section 48(3) to (6).	Included.

Meaning of " director ", " controller " and " manager "

49

• (1) Except in section 41 above, in this Act the expressions " director ", " controller " and " manager ", in relation to an institution, shall be construed in accordance with the provisions of this section.

• (2) " Director ", in relation to an institution, includes—

• (a) any person who occupies the position of a director, by whatever name called ; and

• (b) in the case of an institution established in a country or territory outside the United Kingdom, any person, including a member of a managing board, who occupies a position appearing to the Bank to be analogous to that of a director of a company registered under the Companies Act 1948;

and in the case of a partnership the expression " director ", where it is used in subsections (4) and (5) below, includes a partner.

• (3) " Controller ", in relation to an institution, means—

• (a) a managing director of the institution or of another institution of which it is a subsidiary or, in the case of an institution which is a partnership, a partner;

• (b) a chief executive of the institution or of another institution of which it is a subsidiary;

• (c) a person in accordance with whose directions or instructions the directors of the institution or of another institution of which it is a subsidiary (or any of them) are accustomed to act; and

• (d) a person who, either alone or with any associate or associates, is entitled to exercise, or control the exercise of, fifteen per cent, or more of the voting power at any general meeting of the institution or of another institution of which it is a subsidiary.

• (4) " Manager ", in relation to an institution, means a person (other than the chief executive) employed by the institution who, under the immediate authority of a director or chief executive of the institution—

• (a) exercises managerial functions; or

• (b) is responsible for maintaining accounts or other records of the institution.

• (5) In this section " chief executive ". in relation to an institution, means a person who is employed by the institution and who either alone or jointly with one or more other persons, is or will be responsible under the immediate authority of the directors for the conduct of the business of the institution.

• (6) Without prejudice to subsection (5) above, in relation to an institution whose principal place of business is in a country or territory outside the United Kingdom, the expression " chief executive" also includes a person who is employed by the institution and who, either alone or jointly with one or more other persons, is or will be responsible for the conduct of its deposit-taking business in the United Kingdom.

• (7) In this section "associate", in relation to any person, means—

• (a) the wife or husband or son or daughter of that person;

• (b) any company of which that person is a director ;

• (c) any person who is an employee or partner of that person; and

• (d) if that person is a company—

• (i) any director of that company;

• (ii) any subsidiary of that company ; and

• (iii) any director or employee of any such subsidiary ;

and for the purposes of this section " son " includes step-son and " daughter " includes step-daughter.

Interpretation

50

• (1) In this Act—

• " the appointed day ", and similar expressions, shall be construed in accordance with section 52(4) below;

• " the Bank " means the Bank of England ;

• " conditional licence " shall be construed in accordance with section 10 of this Act;

• " contributory institution " has the meaning assigned to it by section 23 of this Act;

• " debenture " has the same meaning as in the Companies Act 1948;

• " deposit " and " deposit-taking business " shall be construed in accordance with section 1 of this Act;

• " enactment " includes an enactment of the Parliament of Northern Ireland and a Measure of the Northern Ireland Assembly;

• " full licence " means a licence granted under section 3(2) of this Act;

• " institution ", except in the expression " unincorporated institution ", means a body corporate or a partnership or any other association of two or more persons formed under the law of another member State and, accordingly, except in the expression " licensed institution ", includes a recognised bank ;

• " licence " means a full licence, a conditional licence or a transitional licence and " licensed institution " shall be construed accordingly;

• " local authority " means— in England and Wales, a local authority within the meaning of the Local Government Act 1972, the Common Council of the City of London or the Council of the Isles of Stilly ; in Scotland, a local authority within the meaning of the Local Government (Scotland) Act 1973; and in Northern Ireland, a district council within the meaning of the Local Government Act (Northern Ireland) 1972;

• " municipal bank " shall be construed in accordance with section 48 above;

• " penny savings bank " has the same meaning as in section 16 of the National Savings Bank Act 1971;

• " recognition " means recognition as a bank for the purposes of this Act and any reference to a recognised bank or institution shall be construed accordingly ;

• " statutory maximum ", in relation to a fine on summary conviction, means— in England and Wales and Northern Ireland, the prescribed sum, within the meaning of section 28 of the Criminal Law Act 1977 (at the passing of this Act £1,000); and in Scotland, the prescribed sum, within the meaning of section 289B of the Criminal Procedure (Scotland) Act 1975 (at the passing of this Act £1,000); and for the purposes of the application of this definition in Northern Ireland the provisions of the Criminal Law Act 1977 which relate to the sum mentioned in paragraph (a) above shall extend to Northern Ireland;

• " subsidiary " shall be construed in accordance with section 154 of the Companies Act 1948 or section 148 of the Companies Act (Northern Ireland) 1960 ;

• " transitional licence " means a licence granted under paragraph 1 of Schedule 3 to this Act;

• " trustee savings bank " has the meaning assigned to it by section 3 of the Trustee Savings Banks Act 1969 ; and " unincorporated institution " means a partnership or any other association of two or more persons which is not a body corporate.

• (2) Any reference in this Act to any provision of Northern Ireland legislation, within the meaning of section 24 of the Interpretation Act 1978, includes a reference to any subsequent provision of that legislation which, with or without modification, re-enacts the provision referred to in this Act.

Consequential amendments and repeals

51

• (1) The amendments in Part I of Schedule 6 to this Act being amendments consequential on the provisions of this Act, shall have effect, subject to the savings in Part II of that Schedule.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Short title, commencement and extent

52

• (1) This Act may be cited as the Banking Act 1979.

• (2) This Act extends to Northern Ireland.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) Any reference in any provision of this Act to “the appointed day” shall be construed as a reference to the day appointed for the purposes of that provision; and any reference in this Act to the day appointed for the purposes of any provision of this Act—

• (a) shall be construed as a reference to the day appointed under this section for the coming into operation of that provison; and

• (b) where different days are appointed for different purposes of that provision, shall be construed, unless an order under this section otherwise provides, as a reference to the first day so appointed.

SCHEDULES 1—5

1

The central bank of each member State other than the United Kingdom.

2

The National Savings Bank.

3

The Post Office.

4

A trustee savings bank or penny savings bank.

5

A municipal bank.

6

A building society within the meaning of the Building Societies Art 1962 or the Building Societies Act (Northern Ireland) 1967.

7

A society which is registered within the meaning of the Friendly Societies Act 1974 or is registered or deemed to be registered under the Friendly Societies Act (Northern Ireland) 1970.

8

Any institution or unincorporated institution which is for the time being authorised, by virtue of section 3 of the Insurance Companies Act 1974 or Article 7 of the Insurance Companies (Northern Ireland) Order 1976, to carry on insurance business of a class relevant for the purposes of Part I of that Act or, as the case may be, Part II of that Order.

9

A member of The Stock Exchange in the course of business as a stockbroker or stockjobber.

10

A loan society whose rules are certified, deposited and enrolled in accordance with the Loan Societies Act 1840.

11

A credit union within the meaning of the Industrial and Provident Societies Act (Northern Ireland) 1969 or the Credit Unions Art 1979.

12

A body of persons certified as a school bank by a trustee savings bank, the National Savings Bank or a recognised bank.

13

A local authority.

14

Any other body which by virtue of any enactment has power to issue a precept to a local authority in England or Wales, or a requisition to a local authority in Scotland.

SCHEDULE 2

PART I — Recognised Banks

1

• (1) Subject to sub-paragraph (2) below, the institution enjoys, and has for a reasonable period of time enjoyed, a high reputation and standing in the financial community.

• (2) In the case of—

• (a) an institution which is not yet carrying on a deposit-taking business, or

• (b) an institution which has not carried on such a business long enough to have earned the reputation and standing referred to in sub-paragraph (1) above,

the criteria in sub-paragraph (1) above may be taken to be fulfilled if control of the institution lies with one or more bodies of appropriate standing.

• (3) In sub-paragraph (2) above the expression "body of appropriate standing " means a recognised bank or an institution which enjoys, and has for a reasonable period of time enjoyed, a high reputation and standing in the financial community.

• (4) Section 534 of the Income and Corporation Taxes Act 1970 (meaning of " control" in certain contexts) shall apply for the purposes of sub-paragraph (2) above as it applies for purposes of provisions of the Taxes Acts which apply that section.

2

• (1) The institution provides in the United Kingdom or, in the case of an institution which is not yet carrying on a deposit-taking business in the United Kingdom, will provide there either a wide range of banking services or a highly specialised banking service.

• (2) For the purposes of this Part of this Schedule, an institution shall not be regarded as providing a wide range of banking services at any time unless, subject to sub-paragraph (3) below, it provides at that time all of the following services, namely,—

• (a) current or deposit account facilities in sterling or foreign currency for members of the public or for bodies corporate or the acceptance of funds in sterling or foreign currency in the wholesale money markets ;

• (b) finance in the form of overdraft or loan facilities in sterling or foreign currency for members of the public or for bodies corporate or the lending of funds in sterling or foreign currency in the wholesale money markets ;

• (c) foreign exchange services for domestic and foreign customers;

• (d) finance through the medium of bills of exchange and promissory notes together with finance for foreign trade and documentation in connection with foreign trade; and

• (e) financial advice for members of the public and for bodies corporate or investment management services and facilities for arranging the purchase and sale of securities in sterling or foreign currency.

• (3) Any question whether an institution is to be regarded for the purposes of this Schedule as providing at any time either a wide range of banking services or a highly specialised banking service shall be determined by the Bank and, for the purpose of that determination, the Bank may—

• (a) with regard to the provision of a wide range of banking services, disregard the fact that the institution does not or will not provide one or two of the services specified in paragraphs (c) to (e) of sub-paragraph (2) above; and

• (b) have regard to the nature and scope of a particular service provided or to be provided by an institution in determining whether the institution is to be regarded as providing or as going to provide that service for the purposes of this paragraph.

3

The business of the institution is or, in the case of an institution which is not yet carrying on a deposit-taking business, will be carried on with integrity and prudence and with those professional skills which are consistent with the range and scale of the institution's activities.

4

At least two individuals effectively direct the business of the institution.

5

• (1) Without prejudice to paragraph 6 below but subject to sub-paragraph (2) below, the institution will at the time recognition is granted to it have net assets which amount to not less than—

• (a) £5 million, if it is an institution which provides or will provide a wide range of banking services ; and

• (b) £250,000, if it provides or will provide a highly specialised banking service.

• (2) Sub-paragraph (1) above does not apply to an institution which, on the day appointed for the purposes of subsection (4) of section 2 of this Act, was carrying on a deposit-taking business in the United Kingdom if—

• (a) the grant of recognition referred to in that sub-paragraph is made pursuant to an application made at any time during the period referred to in paragraph (a) of that subsection ; and

• (b) the institution has carried on such a business continuously throughout the period beginning on 9th November 1978 and ending on the date of its application for recognition.

• (3) In sub-paragraph (1) above " net assets ", in relation to a body corporate, means paid-up capital and reserves.

• (4) After consultation with the Bank, the Treasury may by order vary either or both of the sums specified in sub-paragraph (1) above.

• (5) The power to make an order under sub-paragraph (4) above shall be exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

6

• (1) The institution maintains or, in the case of an institution which is not yet carrying on a deposit-taking business, will maintain net assets which, together with other financial resources available to the institution of such a nature and amount as are considered appropriate by the Bank, are of an amount which is commensurate with the scale of the institution's operations.

• (2) In sub-paragraph (1) above " net assets ". in relation to a body corporate, means paid-up capital and reserves.

PART II — Licensed Institutions

7

Every person who is a director, controller or manager of the institution is a fit and proper person to hold that position.

8

At least two individuals effectively direct the business of the institution.

9

• (1) Without prejudice to paragraph 10(1)(a) below but subject to sub-paragraph (2) below, the institution will at the time the licence is granted to it have net assets which amount to not less than £250,000 or such larger sum as the Treasury, after consultation with the Bank, may by order specify.

• (2) This paragraph does not apply to an institution which on 9th November 1978 was carrying on a deposit-taking business in the United Kingdom.

• (3) In sub-paragraph (1) above " net assets ". in relation to a body corporate, means paid-up capital and reserves.

• (4) The power to make an order under sub-paragraph (1) above shall be exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

10

• (1) The institution conducts or, in the case of an institution which is not yet carrying on a deposit-taking business, will conduct its business in a prudent manner and, in particular.—

• (a) maintains or, as the case may require, will maintain net assets of such amount as, together with other financial resources available to it of such a nature and amount as are considered appropriate by the Bank, is sufficient to safeguard the interests of its depositors, having regard to the factors specified in sub-paragraph (2) below; and

• (b) maintains or, as the case may require, will maintain adequate liquidity having regard to the relationship between its liquid assets and its liabilities and also to the times at which its liabilities fall due and its assets mature ; and

• (c) makes or, as the case may require, will make adequate provision for bad and doubtful debts and obligations of a contingent nature.

• (2) The factors referred to in sub-paragraph (1)(a) above are—

• (a) the scale and nature of the liabilities of the institution and the sources and amounts of deposits accepted by it; and

• (b) the nature of its assets and the degree of risk attached to them.

• (3) In sub-paragraph (1)(a) above "net assets" in relation to a body corporate, means paid-up capital and reserves.

SCHEDULE 3

PART I — Transitional Licences

1

• (1) A transitional licence to carry on a deposit-taking business may be granted to an institution by the Bank—

• (a) on an application in that behalf by the institution concerned ; or

• (b) on an application by that institution for recognition or a full licence.

• (2) The Bank shall not grant a transitional licence to an institution unless—

• (a) the institution was on the appointed day carrying on a deposit-taking business in the United Kingdom ; and

• (b) the Bank is satisfied that the criteria in paragraphs 7 and 8 of Schedule 2 above are fulfilled; and

• (c) it appears to the Bank that, although at the time of the application the remainder of the criteria for the grant of a full licence are not fulfilled, all those criteria will be fulfilled within a reasonable time.

2

Section 5 of this Act shall apply in relation to an application for a transitional licence as it applies in relation to an application for a full licence.

3

• (1) The authority conferred by a transitional licence may be made conditional upon the institution to which it is granted complying with conditions imposed by the Bank and set out in the licence.

• (2) Where a transitional licence is granted subject to conditions by virtue of sub-paragraph (1) above, subsections (2) and (3) of section 10 of this Act shall apply in relation to the conditions of the licence as they apply in relation to the conditions of a conditional licence.

4

• (1) Subject to sub-paragraphs (2) and (3) below, a transitional licence held by an institution shall expire at the end of the period of two years beginning on the date on which the licence was granted or, if the institution is granted more than one transitional licence, beginning on the date on which the first of those licences was granted.

• (2) A transitional licence may be so granted as to expire at a time earlier than it would expire in accordance with sub-paragraph (1) above.

• (3) A transitional licence—

• (a) may be surrendered by notice in writing given by the institution concerned to the Bank ; or

• (b) may be revoked in accordance with the provisions of Part I of this Act.

5

• (1) In the case of an institution holding a transitional licence which is granted subject to conditions, a failure to comply with any of those conditions shall be treated for the purposes of this Act as a failure by the institution to comply with such an obligation as is referred to in section 6(1)(h) of this Act.

• (2) It shall be a ground for revoking a transitional licence held by an institution that the Bank proposes to grant a full licence to the institution with effect from the time of the revocation of the transitional licence.

• (3) The power of the Bank to revoke a licence by virtue of subparagraph (2) above shall be exercisable by notice in writing given to the institution concerned.

6

• (1) In their application to an institution which is the holder of a transitional licence, section 7 of this Act and Schedule 4 below shall have effect as if for paragraph (b) of subsection (1) of that section there were substituted the following paragraph: —

(b) revoke the transitional licence held by the institution and grant it a transitional licence subject to conditions or, as the case may require, subject to conditions different from those in the licence which is revoked

.

• (2) In a case where a notice under subsection (3)(a) or subsection (4) of section 7 of this Act is given to an institution which is the holder of a transitional licence, Part I or, as the case may require, Part II of Schedule 4 below shall have effect as if any reference therein to a conditional licence were a reference to a transitional licence.

7

• (1) In its application to an institution to which a transitional licence has been granted, section 11 of this Act shall have effect as if at the end of paragraph (6) of subsection (1) there were added the words " to grant it a transitional licence on an application for a full licence or, on an application for a transitional licence, to grant such a licence subject to conditions, or ".

• (2) If an institution is granted a transitional licence subject to conditions, then, on an appeal under section 11 of this Act against the decision to grant the transitional licence, the appellant institution may challenge any of the conditions of that licence, whether or not it also challenges the decision itself.

PART II — Transitional Grant of Recognition

8

The provisions of this Part of this Schedule apply to an institution which—

• (a) on 9th November 1978 was, and at the time of its application for recognition continues to be, either a company within the meaning of the Companies Act 1948 or any other body corporate having its place of central management and control in the United Kingdom ; and

• (b) does not, apart from this Part of this Schedule, qualify for the grant of recognition.

9

Notwithstanding anything in section 3(3) of this Act, the Bank may grant recognition to an institution to which this Part of this Schedule applies (whether or not it would otherwise qualify for the grant of a licence) if the Bank is satisfied—

• (a) that the institution carries on, and has since 9th November 1978 continuously carried on, a deposit-taking business but that the whole, or substantially the whole of that business is and has been carried on outside the United Kingdom; and

• (b) that, with the exception of the criteria in paragraph 2 of Schedule 2 to this Act, the criteria in Part I of that Schedule are fulfilled with respect to the institution; and

• (c) that the criteria in paragraph 2 of Schedule 2 to this Act would be fulfilled with respect to the institution if the reference in sub-paragraph (1) of that paragraph to the provision of a wide range of banking services were not limited to the provision of that range of services within the United Kingdom.

SCHEDULE 4

PART I — Procedure Where Notice of Intention to Act is Given

1

• (1) Where the Bank has given to an institution notice of intention to act, then, before taking any action under the principal section, the Bank shall take into account any representations made by or on behalf of the institution concerned within the period of fourteen days beginning with the date on which the notice was given.

• (2) After taking account of representations in accordance with sub-paragraph (1) above, the Bank shall decide whether—

• (a) to proceed with the proposal in the notice of intention to act; or

• (b) to take no further action ; or

• (c) to take some other course of action open to it under sub-paragraph (3) or sub-paragraph (4) below.

• (3) If the proposal in the notice of intention to act was for action under paragraph (a) of subsection (1) of the principal section, the Bank may decide to take action under paragraph (b) of that subsection or, in the case of a recognised bank, to take action under subsection (2) of that section.

• (4) If the proposal in the notice of intention to act was for action under paragraph (b) of subsection (1) of the principal section and the institution concerned is a recognised bank, the Bank may decide to take action under subsection (2) of the principal section.

• (5) Where the Bank gives notice of intention to act under paragraph (b) of subsection (1) of the principal section and, after taking account of representations in accordance with sub-paragraph (1) above, decides to take action under that paragraph but to grant a conditional licence subject to conditions which are different from those stated in the notice of intention to act, the Bank shall be treated for the purposes of this Act as having decided to proceed with the proposal in the notice.

2

• (1) The Bank shall give the institution concerned notice in writing of its decision under paragraph 1 above within the period of twenty-eight days beginning with the date on which the notice of intention to act was given and, except where the decision is to take no further action, the Bank shall set out in the notice under this paragraph the reasons for its decision.

• (2) Where the Bank gives notice under this paragraph of its decision to take action under paragraph (a) of subsection (1) of the principal section, the notice shall have the effect of revoking the recognition or licence of the institution concerned but shall not come into force until—

• (a) the expiry of the period within which an appeal against that decision may be brought under section 11 of this Act; or