TREASURY DEPOSIT RECEIPTS BILL

Order read for resumption of motion -[10th February, 1960]:

"That the Bill be now read a Second time". - [Mr Low Por Tuck].

4.16 p.m.

The Parliamentary Secretary to the Minister for Finance (Mr Low Por Tuck): Mr Speaker, Sir, the aims of the Bill are, firstly, to enable private investors, commercial banks, insurance companies, investment trusts, statutory bodies and other similar financial institutions to invest their surplus funds in Treasury deposit receipts at attractive rates of interest for periods of two to five years and, secondly, the Bill will also give the Government authority to make productive use of funds so deposited for development purposes. Some of our financial institutions in Singapore, especially foreign incorporated institutions, hold a fairly high proportion of their assets overseas. For example, banking statistics for the quarter ending September, 1959, show that the net overseas assets of commercial banks in Singapore was $410.5 million, or nearly 25 per cent of the total assets of $1,693 million. These financial institutions have, in the past, been able to claim that they hold such a high proportion of their assets overseas by necessity, that there are insufficient opportunities locally to invest their surplus funds in short or medium term liquid and safe or gilt-edged securities.

As stated earlier, it is the intention of the Treasury that a variety of such securities should be available to investors, whether they are looking for short term, medium or long-term investments. Treasury deposit receipts should meet these investment criteria and enable institutions to divert their surplus funds invested overseas for depositing locally in such receipts. By so doing, they are killing two birds with one stone. These receipts earn interest for the depositors and at least as an interim measure until longer-term monies are obtained, they also make available funds for the economic development of the State.

Sir, I beg to move.

Question proposed.

Mr Rajah: There are two points, Mr Speaker, Sir, which strike me on this Bill.

The first point, Sir, is that the Bill enables the Minister to fix the rates of interest and as you, Mr Speaker, know, once the Minister fixes the rates of interest, then this House is committed to the payment of those rates of interest under the Constitution and nobody can query their payment. In the particular circumstances of this Bill, could the Minister say whether it would be desirable to consult the House before he fixes the rates of interest or whether the nature of the transaction is such that it would be undesirable to consult the House on the fixing of the rates of interest?

The second point is under clause 8 (1) of the Bill, which reads:

"A Treasury Deposit shall be repaid on maturity to the holder of the Treasury Deposit Receipt...".

And clause 8 (2) reads:

"No Treasury Deposit shall be repaid except upon the surrender of the Treasury Deposit Receipt relating to such deposit to the Treasury for cancellation." What would happen to such a receipt if it were lost? Supposing the holder of a receipt makes a statutory declaration that he has lost it, would it be possible for him to get payment? Or if the receipt is lost for good, does it mean to say that the holder of that receipt will not get payment from Government even though the Government is satisfied that there has been a genuine loss?

Mr Speaker: I think probably those two points could, with convenience, be dealt with in Committee. The hon. Member knows that having spoken once on the Second Reading he cannot speak again. It would probably be better if the Minister would answer those points in Committee.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole Assembly.

Assembly immediately resolved itself into a Committee on the Bill-[Mr Low Por Tuck].

Bill considered in Committee.

[Mr Speaker in the Chair]

4.20 p.m.

Clauses 1 and 2 ordered to stand part of the Bill.

Clause 3-

Mr Low Por Tuck: Mr Speaker, Sir, I beg to move,

In page 2, line 4, to leave out "one hundred" and insert "fifty".

This amendment will enable investors to deposit funds in a smaller and therefore convenient unit of $50,000 rather than the original sum of $100,000, which would be too large a sum.

Amendment agreed to.

Further amendment made:

In page 2, line 5, to leave out "one hundred" and insert "fifty".-[Mr Low Por Tuck].

Clause 3, as amended, ordered to stand part of the Bill.

Clauses 4 to 6 inclusive ordered to stand part of the Bill.

Clause 7-

Question proposed, "That clause 7stand part of the Bill."

Mr Rajah: Under both the Constitution, Mr Speaker, Sir, and clause 9 of this Bill, any interest payment is a charge on the Consolidated Fund and, as you know, once an amount is charged to the Consolidated Fund, the Assembly will not be able to raise any queries on it. Therefore, any rate of interest fixed by the Minister as a charge on the Fund would have to be payable. In those circumstances, I was wondering whether the Minister would consider that the House be consulted before he fixes the rates of interest, or whether the nature of the transaction is such that it would he undesirable to consult the House.

The Minister for National Development (Mr Ong Eng Guan): Mr Speaker, I think there is a difference between the normal loans from the public, which are in the nature of fixed bonds redeemable at so many years, and Treasury deposits. The idea of Treasury deposits is to cash in on surplus cash, which is available for short periods - it might be six months, nine months or one year. For that reason, it is not possible, technically, to ask the House to approve the rates of interest. The Minister must have the opportunity to seize the right moment to cash in on those surplus funds at the cheapest rate of interest.

Question put, and agreed to.

Clause 7 ordered to stand part of the Bill.

Clause 8-

Question proposed, "That clause 8 stand part of the Bill."

Mr Rajah: At first sight of this clause, Sir, it would appear that anybody who has lost his Treasury deposit receipt could not be given payment so that if that receipt was, shall we say, for two years and if at the end of 12 months he had lost it and could not find it and on maturity he went to the Treasury, the Treasury official would ask, "Where is your receipt?" And he would say, "I have lost it." The Treasury official would say, "I am very sorry, but under clause 8 of the Bill, I cannot pay you." Is there any remedy for that?

Mr Ong Eng Guan: Mr Speaker, if the Member for Farrer Park loses $100 in cash, I am sure the Treasury would not make any payment to him. The idea or Treasury deposits is that they should be transferable under clause 6 by endorsement and delivery. In other words, they would be more or less in the nature of currency notes.

Question put, and agreed to.

Clause 8 ordered to stand part of the Bill.

Clauses 9 to 11 inclusive ordered to stand part of the Bill.

Bill reported with amendments: read the Third time and passed.