BANKING BILL

2.52 p.m.

The Minister for Finance (Dr Goh Keng Swee): Mr Speaker, Sir, I beg to introduce a Bill intituled "An Ordinance to provide for the licensing and regulation of the business of banking, and to amend certain provisions of the Companies Ordinance (Chapter 174 of the Revised Edition)."

Bill read the First time.

Second Reading

Mr Speaker: Second Reading, what day?

Dr Goh Keng Swee: Now, Sir.

Mr Speaker: Please proceed.

Dr Goh Keng Swee: Mr Speaker, I lay upon the Table a Certificate of Urgency signed by the Yang di-Pertuan Negara in respect of the Banking Bill.

Certificate of Urgency handed in.

Mr Speaker: The Certificate is in order. Are copies of the Bill available for the use of Members?

Dr Goh Keng Swee: Yes, Sir.

Copies of the Bill handed in to the Clerk and distributed to hon. Members.

Dr Goh Keng Swee: Mr Speaker, Sir, I have the Yang di-Pertuan Negara's recommendation that the Bill be proceeded with. I beg to move, "That the Bill be now read a Second time."

Hon. Members may recall that this Bill was first introduced to the Assembly at the June 1961 sitting, and since then the Bill has lapsed. The contents of the Bill before the House now are the same as those introduced in June last year, and except for minor changes in dates and in the bringing of the Schedule up to date, there has not been any material change. The main purpose of the Bill is to secure proper control over the activities of the banks in Singapore and to provide proper supervision to ensure a sound basis for banking business which is so important to the State.

The provisions of this Bill are modelled on the lines of the Banking Ordinance and the Central Bank Ordinance now in force in the Federation of Malaya. It is desirable that Singapore and the Federation should have parallel banking legislation as the banking system is common to both territories. The Banking Bill now before the House has been held in abeyance since June 1961, because of more urgent business that has occupied the House since the present Session began. It is now being re-introduced on a Certificate of Urgency. I am proceeding with this Bill throughout its three stages because of the recurrence of industrial disputes between certain local banks and their employees. These disputes have resulted in considerable inconvenience to the public and to the trading and business community in the inter-bank clearance of cheques, and ths has interfered with the efficiency of the banking business in the State. At the moment, the Malayan Banking Association operates a mutual inter-bank clearing house with three of the bigger banks serving as clearing hunks. There is provision in the Bill for the setting up of a Clearing House by the Government and, if this Clearing House is set up, on the coming into force of the Ordinance, the inconvenience that arises out of any industrial dispute will be restricted in its effect.

The Bill before the House is a fairly straightforward one and only a few words of explanation are necessary.

Part I makes the necessary definitions. Banking business is defined very broadly and is not intended to limit any legitimate banking business.

Part II is devoted to the licensing of banks. This Part provides that only banks holding licences from the Minister can carry on business in Singapore. Provision is made for conditions to be attached to licences and these conditions can be modified as and when necessary. The object of this section, is to ensure that banks which operate in the State have a sound financial structure and that their business integrity is not open to question. All new banks - whether local or foreign - have to obtain a licence. Existing banks which were incorporated before 1st January, 1962, will be given a licence. They will, however, have to satisfy certain capital requirements. In the case of new banks incorporated after 1st January, 1962, if its Head Office is in Singapore, its paid-up capital must be at least $2 million. If the Head Office is situated outside Singapore, its paid-up capital must be at least $5 million and it must hold at least $2 million in Singapore in respect of business in Singapore either in the form of immovable property or other approved assets. Existing banks incorporated before 1st January, 1962, will be given a period of grace of up to 10 years under Part VI to comply with the capital requirements.

Part III sets out the main duties of licensed banks. Most of the duties set out in this Part will not in any way cause well established banks to depart from their existing practices and policies. There is provision for a licensed bank to inform the Minister of any alteration in the Bank's constitution or of any proposed change in ownership. Every licensed bank is also required to maintain a reserve fund to be built up out of its profits in the manner prescribed n the Bill. The reserve fund will of course greatly increase the soundness of the bank. Licensed banks are also not allowed to pay dividends until its capitalised expenditure has been written off; nor can it grant unsecured loans exceeding $5,000 to any of its directors or any firm in which the directors are interested. Certain other requirements are also set out to ensure the financial soundness of the bank. Certain statistics are also required to be furnished to the Inspector of Banks for the protection of depositors and to assist in the control of banks. A bank that considers that it is unable to meet financial obligations is required to inform the Minister. Licensed banks are also required to appoint auditors to be approved by the Minister.

Part IV of the Bill deals with the powers of the Minister. In this Part the Bill differs from that of the Federation of Malaya Ordinance, where the Central Bank exercises the principal functions laid down in their Ordinance. Since we do not have a Central Bank, it is necessary to set up some other authority which can perform these functions. Provision is made for the Minister to establish a clearing house.

An Inspector of Banks is to be appointed to be the authority to undertake investigations of banks both on a routine basis and when the Minister has reason to believe that a licensed bank is carrying on its business in an unsatisfactory way. The Inspector may also, on the advice of the Minister, assume control or exercise supervision over the business of a licensed bank in certain circumstances to protect the interests of depositors and creditors. But these are reserve powers which will be used only when the need arises. The powers of the Minister, which can be delegated to the Inspector of Banks, does not extend, however, to authorising enquiries specifically into the affairs of any individual customer of a licensed bank.

Part V of the Bill makes general provisions such as barring certain individuals from taking part in the management of a licensed bank, for instance a bankrupt or persons convicted of an offence involving fraud. Other clauses state the penalty for offences and amendments to the Companies Ordinance.

Part VI makes provisions for the transitional period. I have already referred to the provision that existing banks incorporated before 1st January, 1962, will he granted a licence.

Clause 34 (2) allows a period of grace of up to 10 years for banks with less than $2 million paid-up capital or $2 million worth of assets in the State to adjust their assets to the amount required under this Bill. Banks with their Head Offices in Singapore will not he affected by this provision as none of them have a paid-up capital of less than $2 million. The position of branch banks with Head Offices abroad will have to he ascertained in due course.

I should mention here, Mr Speaker, Sir, that clause 34 of the Bill, which is modelled on section 32 of the Federation Banking Ordinance, differs from the Federation Ordinance in an important respect. Under section 32 (2) (c) of the Federation Banking Ordinance, banks which are principally owned by foreign governments will not be granted a licence in the Federation of Malaya. This part of the Federation of Banking Ordinance is omitted from the Bill now before the House.

These are the main provisions of the Bill. Hon. Members can see that there is nothing in the Bill that is meant to curtail legitimate banking business. To banks which have operated on sound banking principles, this Bill should not cause anxiety or trouble.

As regards staffing arrangements to administer the provisions of this Bill, I intend to appoint the Deputy Controller of Foreign Exchange to be the Inspector of Banks under clause 17. He will he assisted by an adequate number of subordinate staff. Two officers of the Exchange Control have been sent in the second half of last year to undergo a special training course kindly arranged by the Central Bank of the Federation of Malaya. Arrangements to set up the Government Clearing House are well under way and the Clearing House should he in operation in a few days' time.

Sir, I beg to move.

Question proposed.

3.09 p.m.

Mr David Marshall: Mr Speaker, Sir, I always view with repugnance any effort to rush through this House measures of an important character and it cannot be doubted that this measure is of an important character. However, I accept the Minister's reason for the Certificate of Urgency as valid. It is a significant commentary on the irresponsibility of the Malayan Banks Association in seeking to inconvenience members of the public by curtailing inter-bank clearances cheques when one of their members has an industrial dispute that today we should have to deal on the basis of urgency with this Bill instead of the normal procedure whereby I, for one, would have wished to see that an adequate opportunity be given both to the banks and to the commercial community to make representations.

There is one aspect of the Bill. Sir, which I do not quite follow. A radical distinction is made between those banks which are in existence now and those who seek fresh licences. Under the provisions of clause 3 (4), the Minister may grant licences with or without conditions, or refuse a licence. But under clause 34 (1), which over-rules the provisions of sub-clause 4, it says that the banks specified in the Third Schedule, which are the banks in existence now, shall be granted a licence subject to such conditions as are contained in any licence which is in existence. So that, Sir, we cannot impose more conditions than are in existence, nor can we impose any conditions in the licence if, in fact, there are no conditions in any existing licence or no conditions at all. I am sure there must he some valid reason for this distinction and particularly for the limitation of the Minister's powers to place conditions in respect of the issue of licenses to banks which are in existence and which are listed in the Schedule. I would appreciate an indication of the reasons which underlie the distinction between licences granted to new banks and licences granted to existing banks. I do not know, Sir, but I should imagine there are banks in existence today which have no conditions attached to any licence, and in so far as I read clause 34 (1), it precludes the Minister from imposing any conditions on the licence that he issues to those banks, tying his hands completely. I would ask whether, in fact, that is intentional or inadvertent, and if intentional the reason therefor. I would also appreciate an assurance that this Clearing House which the Government is setting up with such commendable speed will, in fact, be adequately organised for the purpose of meeting inter-bank cheque clearances to avoid the type of inconvenience which has been imposed upon the public by members of the Malayan Banks Association recently.

3.15 p.m.

Mr Ong Eng Guan (Hong Lim): Mr Speaker, Sir, a Bill of such a nature would, in my opinion, be a step in the right direction to protect the interests of depositors although I feel that it is not adequate enough. Sir, we have seen in this country too many mushroom bogus employment agencies, bogus insurance companies, and I feel that unless such a Bill is passed, we may also see in the near future, bogus banking companies.

Mr Speaker, Sir, in my opinion the Bill is not adequate because, although the Minister is given sufficient powers to investigate into the affairs of the banks, yet the depositors and the public at large do not know the results of such investigations until the situation has worsened so badly that the Minister or the Inspector has to take action.

I feel that the details given by the banks to the Minister as set out in the First Schedule should also be disclosed in the banking premises so that the depositors will know what happens to the banks.

Sir, although the bank in theory belongs to the directors, and also, to a lesser extent, to the shareholders who do not play a large part in its direction, the depositors have as much a stake in the bank as, and sometimes even more than, the directors.

Mr Speaker, Sir, another point to which I wish to draw the attention of the Minister is that he should be given powers so that he can direct the Inspector to go and test check the cash position and other details of the banks as set out in the First Schedule and not just rely on the balance sheets.

Mr Speaker. Sir, the ideal situation, of course, is to set up a Central Bank, but it is a practical impossibility because we are still in the stage of a semi-colony, but we hope with this Banking Bill we will have more sound banking practices and systems than has been the case in the past.

Mr A. P. Rajah (Farrer Park): Mr Speaker, Sir, I rise to oppose this Bill not because of the content of the Bill. The content of the Bill is praiseworthy. In fact, it was praiseworthy in June 1961 when the Government introduced it, and if there had been no intervening motives which have now induced the Government to introduce this Bill at this stage, the content would still be very praiseworthy. But what makes this Bill objectionable at the moment is the manner in which it is being presented to the House and the time at which it has been presented to this House - I repeat the phrase "the time" and I think the Minister for Finance understands very well what I mean by the phrase "the time at which he has presented this Bill". It is objectionable and unworthy of this Government.

Mr Speaker, Sir, Singapore is a trading island which has commercial facilities and the banks play a very important part in the commercial prosperity of this island. Now, as banks are employers, therefore there must be employees. The business of the Government, as I see it, is to foster the economic conditions of this country, and in the fostering of these economic conditions, it becomes necessary to foster the banking facilities available to this commercial community. In the absence of State banks and State commercial banks, the Minister has himself said, in answer to a question by the Member for Anson, that the private banks are in fact adequately meeting the needs of the commercial community. As the Minister concerned in these bathing facilities, he is satisfied that these banks are, in fact, providing an adequate service and he knows of no instance where they have fallen down on their obligations or failed the commercial community. Why then, I ask, are we being presented with the Banking Bill today, and why does the Minister ask that it be taken through all the stages at one sitting? The Minister introduced the Bill in 1961. He said that because he had other urgent business he had allowed the Bill to lapse. I do not accept the explanation for one moment. Mr Speaker.

He has other motives for introducing this Bill of which he has not told this House. On the aspects of the Government's motives in introducing this Bill, they should be ashamed. My colleague, the Member for Cairnhill, will be dealing more adequately with that aspect of the situation later on in this debate. Therefore, Mr Speaker, Sir, I do not wish to touch upon those motives which have led the Minister to introduce this Bill at this particular juncture. The motives indicate that the Minister for Finance is taking sides in disputes which do not concern him as the Minister for Finance.

The Member for Anson has said that in theory he disapproves of Bills being brought into this House and passed on Certificates of Urgency when the issues involved are vital to this country, and yet he has said that in this case he is going to excuse the Government. I wonder what has happened to the sense of justice of the Member for Anson in this particular instance? Has he got a phobia against the banks?

Mr Speaker, Sir, the Minister in his Second Reading said that the reasons for the Bill are the proper control and the proper supervision of banks. Now is he suggesting that any of the certified banks listed in the Third Schedule has contravened any of these reasons? Are the banks or any of the banks misbehaving so badly in their banking business - I mean. Mr Minister, not in their relationships over which the Minister has no Concern? Or should not -

Mr Speaker: Order. The Member for Farrer Park should address the Chair and not the Minister.

Mr Rajah: Sir, I was not addressing the Minister. I was addressing -

Mr Speaker: I think the Member for Farrer Park has forgotten that he used the words "Mr Minister" and looked at the Minister.

Mr Rajah: I apologise for that, Sir,It was inadvertent. I was not addressing Mr Minister. I was addressing you but I inadvertently happened to look in his direction.

Mr Speaker: The Member for Farrer Park, of course, cannot address the Speaker as Mr Minister.

Mr Rajah: I beg your pardon. I meant to say "Mr Speaker". Sir, I accept the position that this Bill is necessary. Of course, it is necessary. We all accept that position. It is necessary that there should he proper control over banks and that there should he proper supervision of banks. I agree with the Member for Hong Lim that these controls are necessary in order that in the future no bogus banks might come up. But the point I am trying to get across to Mr Minister is this. Mr Speaker. Sir, if he is moving this Bill on a Certificate of Urgency, then there is a suggestion that there are some banks which are misbehaving from a banking point of view. The Minister has made no such suggestion to the House. He has not given any reasons whatsoever as to why this Bill should he moved on a Certificate of Urgency through all three stages in this House. He has not mentioned one word about that. One reason he tried to give was this. He said the reason for the urgency was industrial strife in some local banks. Now if there is industrial strife - and there is industrial strife in the banks - surely the remedy is in the hands of the Minister for Labour, and not in rushing a Bill through all the three stages in this Assembly. He could refer all these disputes to the industrial Arbitration Court. This industrial strife will come to an end and the industrial disputes will be settled properly before the Industrial Arbitration Court.

Mr Speaker, Sir, I have always wondered why in all these bank disputes the Government has never sent the matters to the Industrial Court immediately. Insofar as the Bank of America was concerned, the strike was allowed to last for 19 days before the Government sent the matter up to the Industrial Arbitration Court. Was there not an urgency at that time? Why did the Government then not send up that dispute to the Industrial Arbitration Court as soon as it broke out? Why was this Bill not introduced at that stage? The Government has not given any good reason.

Mr Speaker, Sir, we are also informed by the Minister that when this Bill has been passed into law and when the clearing house has been established, what is now happening in Singapore will not happen. I venture to suggest to him that that will not be the position under this Bill. The mere establishment of a clearing house under this Bill - as it is set out in this Bill - is not going to prevent the Bankers Associations from getting together and doing exactly what they are now doing. All that the Bill does is that it sets up a clearing house. All this Bill dues is, instead of the three banks which are now acting as a clearing house, to set up one clearing house. That is the general effect of it. But if the banks get together after this Bill - and this I pose to the Minister in all seriousness - how does the Minister propose to control them? If they refuse to clear in the way that they are now clearing, is the clearing house going to help the situation? Not one bit.

Mr David Marshall: Have a State bank.

Mr Rajah: Ah, have a State bank, but a State bank, of course, is a matter of Federal interest and not of Singapore interest.

Dr Goh Keng Swee: What bank did you say?

Mr Rajah: That is what the Minister himself said.

An hon. Member: A State bank or a central bank.

Mr Rajah: So, Mr Speaker, Sit, the Minister's statements for putting forward this Bill at this particular juncture and the reasons which he says have induced him to go to the Yang di-Pertuan Negara for a Certificate of Urgency are not what he has told this House. There are things in his mind which he has not told this House about. I hope he will take this House into his confidence and tell us really what has induced him to move this Bill on a Certificate of Urgency.

Mr David Marshall: On a point of order, Sir,Is it permitted to say that a Member of the House is not, in fact, giving the reasons which he says he is giving without saying what the other reasons might be?

Mr Speaker: That certainly is not a point of order for me.

3.28 p.m.

Tun Lim Yew Hock (Cairnhill): Mr Speaker, Sir, in July 1960, at the time of the opening of the Second Session of this Assembly, the Prime Minister on moving a motion of thanks to the Yang di-Pertuan Negara for his gracious speech had this to say, and I quote from Hansard, Volume 13, No. 2 dated 3rd August, 1960, column 54:

`In the past year the momentum of the P.A.P. after its massive victory in the last elections was stupendous. There were exuberance and zeal which took a lot of tempering. Minor mistakes of haste, born out of impatience to put the world right, were committed. They were errors, not of the rashness or wisdom of the policy to be implemented, but of the intemperate haste which resulted in insufficient preparation and the carrying of the opinion of the people, which could have been done by prolonged consultation and public discussion.'

Sir, this referred to the haste with which the P.A.P. during its first year of office rushed Bills through on Certificates of Urgency. So I thought, after having listened to the speech of the Prime Minister in 1960, that the P.A.P. had learnt its lesson and would proceed cautiously. Instead of which we now have very important legislation being rushed through all its stages on a Certificate of Urgency.

The Minister for Finance in his speech on the Second Reading said that it is desirable that Singapore and the Federation should have parallel banking legislation if the banking system is common to both territories. But is this proposed legislation parallel? It is not. It contains three clauses which are new and which are not included in the banking legislation in the Federation of Malaya.

Then the Minister refers to the reasons why this Bill has to be taken through all its stages. He says that because of the recurrence of industrial disputes between certain banks and its employees, these disputes have resulted in considerable inconvenience to the public and to the trading and business community. Sir, the truth of all this is that the Bank Employees' Union is in the hands of the P.A.P., and they are playing party politics. I make the solemn charge in this House that, because the Union is a P.A.P. union, the Minister for Finance has said that unless an apology is given by the bank concerned to the union in the terms demanded by the union, he will introduce this Bill today and rush it through. I will make that allegation at any time before any Commission of Inquiry. He did say this - that unless the bank concerned did give an apology to the union in the terms demanded by the union, he would introduce this Bill today and rush through all its Readings.

The Government is fond of saying that anyone who makes an allegation in this House must face any Commission of Inquiry. I make this charge and I will face it. The whole trouble with the banks today. Sir, is because - and I will not touch at great length on it because I have a motion - this particular union, in the hands of the P.A.P., tries to show to the workers of Singapore that they are indeed brave men, that they are indeed fighting for the workers' rights, and that other unions led by other people, the Barisan Sosialis, are no good. And they place restrictions in the paths of unions that do not come under the control of the P.A.P. In this particular case where they have an Industrial Arbitration Court, the matter could be referred to the Court. It has been referred to the Court, and there is a strike.

Now, it is a question of face. I will not touch on the merits or demerits because I must say that I do not know fully the merits or demerits, but in a matter of this kind, Sir, surely the Minister for Labour could have called in both parties and given them a stiff talking to and said, "Shut up, don't behave like that. The economy of the country is greater than any political Party and anybody else. Go back, do your work. Shake hands and forget about it." They could have done it. Instead of this, the Minister for Finance is here introducing a Bill and rushing it through all its stages with the threat that unless apology is given to the P.A.P. Bank Employees' Union, this Bill will be proceeded with. That is the true reason. Of course, the Minister can deny it. But I make this solemn charge and I say that what they are trying to do is not right.

Sir, my colleague, the Member for Farrer Park, has said that we arc in support of the principles of the Bill. Why rush it through for the purpose? We are not here to help the P.A.P. run P.A.P. unions. It is because of that that we are against this move on the part of the Government to rush through this Bill. We will oppose the Second Reading now. But if the Minister will have it sent to a Select Committee, we will have no objection. In fact, we support the principle of the Bill, but we protest, and protest vigorously, against the reasons that impel the Minister to introduce it on a Certificate of Urgency.

3.35 p.m.

The Prime Minister (Mr Lee Kuan Yew): Sir, I had not intended to participate in this debate, but in view of the speeches which I have heard, one from the Member for Farrer Park and the other from the Member for Cairnhill, I think we should get our credentials right.

First, the Member for Cairnhill says he does not know what this is all about. I find that difficult to believe, because the Oversea-Chinese Banking Corporation, which is a holding company of Eastern Realty, was his former employer. Thus we get credential No. 1 in place. I am not suggesting, on the other hand, that the Member for Farrer Park is being paid by the O.C.B.C. to speak on their behalf, but I do suggest that from, time to time, in fact, it is well known that his firm of solicitors often act for the O.C.B.C. And I find it difficult to believe that two persons, so closely connected with -

Mr David Marshall: On a point of order. Sir. Mr Speaker, Sir, I have no brief here, but I do ask whether it is in order that insinuations of personal interest should be made in this manner.

Mr Speaker: If, in fact, there have been insinuations of that nature, the Prime Minister could be brought up before the Committee of Privileges on a question of privilege. As far as rules of order are concerned, all I can say is that possibly the Prime Minister is imputing improper motive and, therefore, under our Standing Orders he must not do it.

The Prime Minister: I am act suggesting improper motive, Sir. All I am suggesting is: two Members speaking are well informed. I am not suggesting for one moment that the Member for Farrer Park, because he is closely connected with the O.C.B.C., is, therefore, taking sides with the O.C.B.C. What I am suggesting is: I find it difficult to believe that two Members of the S.P.A., who are well connected with the bank socially from their past business association, do not know the circumstances under which this Bill has been brought about.

Mr Rajah: Is that what is bothering you?

The Prime Minister: No, it is not worrying me at all. In fact, if the Member for Farrer Park will notice, I was surprised why there should be any hesitation in saying point blank to the bank that the ultimate referee is the Government of the State of Singapore. If the banks are going to gang up on behalf of any single bank, be it the O.C.B.C. or any other bank, and stop clearing and stop the whole economic machine in the process of one industrial dispute with an individual bank, then I say, the State intervenes.

Mr Rajah: What is the Minister for Labour doing?

The Prime Minister: I say the State intervenes.

Mr David Marshall: Hear, hear!

The Prime Minister: I make no apologies for that.

Mr Rajah: What? For the Minister for Labour?

The Prime Minister: Or for the Minister for Finance. I say to the O.C.B.C., and I know them well, too -

Mr Rajah: Are you sure?

The Prime Minister: Yes, the Managing Director. Let me tell the Member for Farrer Park the kind of gentlemen we deal with. The Managing Director happens to be distantly connected with me through marriage. He told me once, when I was leading a delegation of postmen in a dispute with the Government then, that he always got his way. He was then a Member of the Executive Council, and he told me - I was then a very much younger man - that I should listen to him and settle. He said, "You know, I always win. When I was a young chap, I kept fighting fish, and my fighting fish beat everybody's fighting fish. They asked, How did you do that?' I said, Simple.' " And I say this publicly too - I think he is not feeling very well at the moment and he will not be feeling very well after ha reads this. To his fighting fish every day he added a drop of brandy. So the fish got soaked up with it. After seven drops of brandy had gone in, any other fish that entered into its bowl was out. And if it went into the other bowl, he poured half the water from his bowl into the other. Of course, all this is stored away somewhere in the recesses of one's mind.

When the Minister for Finance consulted me and said, "Look, the banks are ganging up. What shall we do?" I said, "What is all this about?" I had been away for some time, about a fortnight, and I did not understand the circumstances under which this had come about - the pig-headedness of this particular bank and the ganging up of the other banks to back this bank at the expense of the economy of Singapore. I say. "Well, if they do not want to do their duty, the Government steps in." We are not trying to help the Business Houses Employees' Union vis-a-vis the O.C.B.C. They can scrub it out. The O.C.B.C. is prepared to shut business. If they shut business, the bank employees will suffer too. They lose pay. The matter can be settled, but we will not let - 37 banks, is it?

Mr David Marshall: Thirty-five.

The Prime Minister: Thirty-five banks gang up for the sake of the O.C.B.C.'s pig-headedness and jar the economy of Singapore. I find no difficulty in saying this: the Member for Cairnhill and the Member for Farrer Park are well acquainted with the facts of the dispute. I am not interested in the merits of the dispute. But I say, if they gang up at the expense of the whole economy of Singapore, it is the duty of the Government to step in.

Mr David Marshall: Hear, hear!

The Minister for Health and Law (Mr K. M. Byrne): Mr Speaker, Sir, recently whenever there has been an industrial dispute in one bank, the Malayan Exchange Banks Association has taken concerted action to stop inter-banking clearing arrangements in all other banks in Singapore, even though they are not in any way involved in the dispute. In this way the Malayan Exchange Banks Association has inflicted unwarranted hardship on the public -

Mr David Marshall: Hear, hear!

Mr Byrne: - and has attempted to convert every isolated industrial dispute into a general dispute affecting all the banks. This sort of action has been repeated on a number of occasions recently. In this way the Association has held the public to ransom every time one of the associated banks is involved in an industrial dispute with its employees. There is as little justification for this sort of action as there will be for the Bank Employees' Union to call a general strike in all the associated banks of the Malayan Exchange Banks Association whenever disputes arise in one of the banks. Government could not be expected to condone such a state of affairs if action of this sort was taken by the union, which would have the effect of causing undue hardship to the public.

Employers always complain to the Ministry of Labour about the failure of trade unions to bring trade disputes to the Ministry of Labour. They always complain to the Ministry of Labour whenever unions engaged in sympathy strikes sought to extend the dispute in this way to firms or organisations which arc not in any way involved in a particular dispute. If this sort of industrial action on the part of the unions is to be condemned because of the prejudicial effects it has on the economy of the State, the action that has recently been taken by the Malayan Exchange Banks Association in refusing clearing facilities in the associated banks which are not in any way involved in the trade dispute, must equally be condemned. It is for this reason that a clearing house has been set up under clause 16 of this Bill. Clause 16 of this Bill is designed to prevent the Malayan Exchange Banks Association from resorting to such improper practices in the future. When this Bill becomes law, all inter-bank clearing arrangements will be put on a statutory footing and operated from a central clearing house under Government control. It is only by such arrangements that Government can put an end to the hardship which the Malayan Exchange Banks Association has improperly sought to impose on general public whenever one of its members has been involved in an industrial dispute.

I heard the Member for Farrer Park say to this House that if this clearing house is set up, what can we do about it? There is nothing to prevent the exchange banks from ganging up together. Mr Speaker, Sir, I would refer the Member for Farrer Park to clause 31 of this Bill which provides that:

`The Minister may make such regulations as may be required from time to time for carrying into effect the provisions of this Ordinance.'

Any such regulations made under those provisions would come under the provisions of clause 27. Any breach of any regulations made under clause 31 could be dealt with under the general penalty provisions of clause 27. May I read the general penalty provisions in clause 27 to the House, Mr Speaker, Sir?

`Any licensed bank which is guilty of an offence against this Ordinance for which no penalty is expressly provided shall, on conviction, be liable to a fine not exceeding five thousand dollars.'

Mr David Marshall: Make it fifty.

Mr Byrne: Mr Speaker, Sir, I have already seen a copy of these draft regulations. They will be known as the Banking Clearing House Regulations, 1962. They require each bank carrying on business in Singapore to open immediately with the Accountant-General a clearing account in the name of the Clearing House, and they require representatives of the bank to appear daily for the purpose of these clearances. These regulations will be promulgated when this Ordinance comes into force.

Mr Speaker, Sir, the Member for Farrer Park said just now that we were unduly interfering with the affairs of the banking community in Singapore by introducing this Bill in the Legislative Assembly. He asked, why should we not leave things alone?

Mr Rajah: On a point of elucidation.

Mr Byrne resumed his seat.

Mr Rajah: Mr Speaker, I did not say that we should leave things alone. All I said was that the Minister for Labour had the solution in his hand which he did not use. He still has it today.

Mr Byrne: Mr Speaker. Sir, I did hear the remark, "Why not leave things well alone?"

Mr Rajah: No, no, I do not believe in it.

Mr Byrne: Mr Speaker, Sir, in the Federation there are two Ordinances: Ordinance 61 of 1958 dealing with the Central Bank of Malaya, and Ordinance No. 62 of 1958 dealing with banking generally. Except for sections 16, 17 and 19, which are adapted from the Central Bank of Malaya Ordinance, all the other sections of this Banking Bill are taken from Ordinance No. 62 of 1958 of the Federation dealing with banking generally; with the exception of the powers given to the Minister under clause 16 to set up a clearing house, and under clause 17 to appoint an Inspector of Banks to inspect and investigate under conditions of secrecy the books, accounts and transactions of each licensed bank where he has reason to believe that the licensed bank is carrying on business in a manner detrimental to its depositors and other creditors, or has insufficient assets to cover its liabilities to the pub' lie, or has contravened the provisions of the Ordinance, or where his investigation is requested at the instance of shareholders or depositors. The rest of the other provisions of the Central Bank Ordinance of the Federation are omitted from this Bill.

Mr Speaker, Sir, in the Federation, in addition to these powers, the Central Bank of Malaya Ordinance also gives the Minister the following powers:

(1) To prescribe liquid assets which each licensed bank should hold.

(2) To make recommendations to licensed banks on the following matters:

(i) The policy to be followed by the banks when granting advances and extension of credit facilities;

(ii) Rates of interest payable to or by licensed banks;

(iii) The reserves to be held by each licensed bank;

(iv) The maximum amount or amounts of assets expressed as a percentage which the assets must bear to sight and time liabilities of the licensed bank.

(3) To direct or make recommendations to persons or classes of persons even if they are not licensed banks if they carry on the business of receiving money on deposit.

In addition to these powers, the Minister in the Federation also has the power, once he has made the recommendation, to issue directives in writing to each licensed bank, or class or classes of persons, to give effect to the recommendation within a reasonable time, subject to penalties for a breach of these directions. These powers have not been included in this Banking Bill. The only powers incorporated are the powers of setting up a clearing house, and to provide for the inspection of banks under conditions of secrecy.

Mr Speaker, Sir, it is quite clear that no powers have been included in this Bill to enable the Government to determine the credit policy of the banks as these are powers which are normally exercised by the Board of Directors of the Central Bank.

Mr Speaker, it has been suggested that this Bill has been introduced from a spirit of vindictiveness on the part of the Minister for Finance. Mr Speaker, Sir, for the information of Members of the House, this Bill has nothing to do with the dispute that is current now between the O.C.B.C. and the Bank Employees' Union.

Mr Rajah: Not the Bill. The timing.

Mr Byrne: Mr Speaker, Sir, let us go briefly into the facts of this dispute. An award was made in the dispute between the Singapore Bank Employees' Union and the Overseas Chinese Banking Corporation on the 22nd July, 1961, and covered two categories of employees, the clerks and the clerical assistants. The award covered salary scales, bonus, annual leave, casual leave, T.B. leave, maternity leave, period of probation, overtime, medical facilities. These are what are known as fringe benefits. A dispute arose between the Bank and the Union on the interpretation of certain provisions of the award referring to:

(1) The redesignation of all messengers as clerical assistants and

(2) On the method of conversion of clerks from their old salary to the scale awarded by the Court.

The Union was satisfied with the salary awarded and the method of conversion for clerical assistants. But the Union claimed that all existing messengers as in other Chinese banks should be regarded as belonging to a single transferable category. The Bank would not accept this contention and disputed the contention that all the messengers employed in the Bank belonged to a single transferable category. In other words, the Bank maintained that certain existing messengers were to he left out and were not to be converted to the scale of clerical assistants. Both these matters were put to the referee. The referee appointed by the Court was the President of the Court himself. The referee ruled that in regard to the messengers they belonged to a single transferable category, and in regard to the method of conversion of the clerks from their old scale to the new scale, he made certain rulings. The Bank read the referee's rulings on clerical conversion in one way and the Union in another. On the Union's reading of the referee's ruling, the clerks stood to gain, and on the Bank's interpretation the clerks stood to lose. The Bank then took the point that the referee had exceeded his jurisdiction as referee when he interpreted the award. This was ultra vires as the full Court alone had the jurisdiction to interpret any award. On the strength of this argument the Bank moved to the High Court in certiorari proceedings for an order to quash the referee's award on the grounds that the referee had no powers to interpret the award, and that it would be against natural justice for the President, who had acted as referee to be called upon later as President of the Court to interpret the award. Although the Bank disagreed with the referee's rulings on the redesignation of messengers as clerical assistants the Bank did offer payment to all messengers as clerical assistants in accordance with the award.

As there was no dispute in regard to the conversion of messengers to the new scale awarded by the Court for clerical assistants, the Union instructed its members to accept this payment. The payment was made in accordance with the ruling of the referee that all messengers employed by this Bank belonged to a single transferable category and should all be converted to the new scale for clerical assistants. In relation to the clerks, the Bank did make an offer to the Union to make payment in accordance with their reading of the award and their reading of the referee's ruling of the award. The Union refused to accept any payment for the clerks pending a complete clarification of all the conversion items in dispute. There were still differences between the Union and the Bank as to how the clerks should be converted from their old scale to the new scale. The clerks going on to the new scale had different conversion points on the new scale varying with their length of service. This offer by the Bank to the Union to make payments to the clerks and the refusal by the Union of the offer took place in September last year. Subsequently, without the knowledge of the Union, and against the Union's stated stand in the matter, the Bank made payment to a few individual members of the Union.

The Union also alleged that officers of the Bank had attempted improperly to induce other members of the Union to accept payment against the Union's wishes. This was discovered by the Union recently. The Union asked the Bank for an apology on the grounds that unilateral arrangements between an employer and individual members of the Union had been made secretly, completely bypassing the Union, and this was clearly an attempt by the Bank to subvert good industrial relations with the Union. The Union gave the Bank 48 hours' grace in which to make a suitable expression of regret and to give an undertaking that in future there would be direct official dealings only between the Bank and the recognised representative of the Union, and that they would avoid entering into similar secret unilateral arrangements with individuals in the future. Even before the 48 hours were due to elapse, the Union received a letter from the Bank containing a series of threats to prosecute the Union for non-compliance with the award. Incidentally that was signed by L. C. Goh.

The present strike has nothing whatever to do with the question of the certiorari proceedings for quashing the referee's order, which was instituted by the Bank in the High Court recently. The Union, the Bank and the State Advocate-General all consented to this Order. It was right of the Bank to offer payments to the clerks in accordance with their reading of the award. But once the Union had indicated that it disagreed with the management's interpretation and would not accept payment until these disagreements had been clan-fled, it was improper of the Bank to have made payments to individual members of the Union behind the back of the Union. This was the issue which has led to the present strike. The application -

Mr Speaker: Order. I allowed the Minister to commence because he said it was going to be a very brief statement of the dispute. I take it that he is justifying the reason why this Bill has been introduced on a Certificate of Urgency. That is the only relevance, I think, of this statement, because I cannot see how the dispute between the Bank and the Union has anything to do with the principle of this Bill and that is what we are debating.

Dr Goh Keng Swee: Mr Speaker, I think the reason why -

Mr Speaker: Order. The Minister for Health and Law will have to explain.

Mr Byrne: Mr Speaker, I heard the Member for Cairnhill say just now that it was because of the dispute between the O.C.B.C. and the Bank Employees' Union that this Bill has been introduced. He also said just now that we were supporting a P.A.P. union.

Mr Speaker: Order. The point is that the Minister has gone into details which are completely irrelevant to the principle of the Bill. I do not think the Member for Cairnhill went into details. He just said in passing that that was his opinion and that it could be denied from the Ministerial Benches. But these details, which seem to be justifying a Union's action, have nothing to do with the principle of the Bill.

Mr Byrne: Mr Speaker, Sir, I have to trace the history of this dispute in some detail to show that it has nothing whatsoever to do with the circumstances which led to the introduction of this Bill. It is because of the ganging up of the banks and the denial of clearing facilities and of the imposition that the banks have placed on members of the public that this Bill has been introduced.

Mr Speaker, Sir, if I may refer to the point raised by the Member for Anson. He wanted to know why, under clause 34 of the Bill, the licences that were issued to banks under the Companies Ordinance were deemed to be issued under the provisions of this Bill. Mr Speaker, Sir, all banks are required to be registered under the Companies Ordinance. All that this Bill does is to give a licence under the new Banking Ordinance to banks which are registered under the Companies Ordinance in order that they may carry on the business of banking.

Mr Speaker, Sir, if the Member for Anson will look at clause 32 of the Bill, he will find that it seeks to amend section 309 of the Companies Ordinance. Section 309 of the Companies Ordinance refers to the licensing of banks which have headquarters elsewhere which carry on business in Singapore. Under this section of the Companies Ordinance, such banks have to take out licences. No such licences are required under this section of the Companies Ordinance for banks which are locally incorporated and which carry on business in the State of Singapore. The provisions of clauses 32 and 34 of the Bill require all existing banks which are already registered under the Companies Ordinance to take out licences. They shall take out licences under the provisions of clause 34.

Mr Speaker: Any hon. Member wishes to speak? Dr Goh then in reply.

4.02 p.m.

Dr Goh Keng Swee: I really have very little to add in reply to the points raised by the Opposition. I am glad to note that there is general assent to the contents of the Bill and the purpose which this Bill sets out to achieve. Certain Members of the Opposition regret the timing. The Member for Cairnhill, in particular, thinks the whole purpose of this operation is to favour the Bank Employees' Union. But he has not explained exactly in what manner the immediate passage of this Bill will assist the Bank Employees' Union.

Sir, from our point of view, the issue is quite simple. There has been a strike by the Union at the O.C.B.C. Whenever strikes occur at other banks, members of the Malayan Exchange Banks Association, who control and operate their own clearing house, decide on one pretext or other to slow down the clearing operation. On one occasion at least, matters reached such a stage that nearly the whole economy of Singapore almost came to a grinding halt. When this particular strike at the O.C.B.C. broke out, it was obvious that the same practice of restricting inter-bank clearances would he carried out by the Exchange Banks. It is in the interests of the Government to see that the general public is not inconvenienced. The most obvious and easiest solution is to see that the strike ends as early as possible. If the strike continues for any length of time with inter-bank clearances curtailed, it is quite evident that the Government must move in and provide the inter-bank clearances which the banks themselves are unable or unwilling to provide. For these reasons, therefore, when certain members of the Exchange Banks saw me, I decided to assist in any way possible to bring the two parties together to an early settlement. It became very clear to me that in this instance, the union was clearly in the right and the banks were in the wrong. There were absolutely no two ways about it.

Mr David Marshall: Hear, hear!

Dr Goh Keng Swee: Not only was the Bank in the wrong, but it acted in the most extraordinary way. The Union members, in the first instance, decided to give the Bank two days to make up their minds before they called a strike On Wednesday. The banks held a meeting with representatives of the Union. Far from achieving any settlement, it brought about the opposite effect. Instead of waiting till Wednesday to strike, they went on strike on Tuesday, the following day. I tried to convince the banks in general and this particular Bank in particular that it was not in their interests to continue in this strike and that, in my opinion, the terms offered by the Union were moderate and reasonable and should be accepted by the banks. If there was no early settlement of the strike, I informed them that I intended to bring this Bill before the House and pass it on a Certificate of Urgency, set up this clearing house so that the inconvenience caused by the strike can be restricted to the minimum.

The Member for Farrer Park thought I was trying to hide something and that I did not give the full picture. It was surely not necessary for me, Mr Speaker, Sir, in moving the Second Reading to go into all these details. I would not know, for instance, that the two hon. Members had such an intimate interest in the subject. But there is nothing that the Government has done that it has to apologise for and be in any way ashamed. This particular bank and the banks in general have only themselves to blame for bringing this state of affairs about. But in moving the Second Reading, I did say that the reasons for proceeding with this Bill on a Certificate of Urgency were the recurrence of industrial disputes in local banks and the need to provide a Government clearing house so that the inconvenience arising from such disputes will be restricted in their effect. That is the general explanation. There is nothing for me, as Finance Minister of the Government, to conceal from the public. If the Member for Cairnhill wants to give his evidence on oath, nobody is going to stop him from so doing. He can go to the Supreme Court and sign a statutory declaration for all I care. I think I have dealt with the most important point raised by the Opposition.

The Member for Anson asked whether there would be adequate arrangements for the clearing house. My reply is that the administrative arrangement for the clearing house was made several months ago when we foresaw that the time might come when the Government would have to intervene in this matter. As early as last November all the draft regulations were completed, the administrative schemes drawn up, and consultations and instructions carried out with the Central Bank in Malaya to see what their procedures are. As I have said, arrangements are well in hand. There is some difficulty about getting furniture. That is the last report. We had to bring 42 tables, one table for each hank and so on and so forth. The P.W.D. have not been as expeditious as they could. I do not know what the reasons are, but generally we are pressing ahead as fast as possible. I have been assured by the Deputy Controller of Foreign Exchange that he could get the clearing house in operation by Friday, but he thought it would be a bit of a sweat. He assured me, however, that it would be in full blast the following week.

Mr David Marshall: Hear, hear!

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. -[Dr Goh Keng Swee].

Bill considered in Committee.

[Mr SPEAKER in the Chair]

4.12 p.m.

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

The Chairman: I propose to take each Part unless Members wish to speak on any particular clause. Any clauses on which hon. Members wish to speak in Part II, clauses 3 to 6 inclusive?

Hon. Members indicated dissent.

Clauses 3 to 6 inclusive ordered to stand part of the Bill.

The Chairman: Part III, clauses 7 to15. Is there any particular clause on which any Member wishes to speak?

Mr Rajah: There are a number of clauses.

The Chairman: I will take the Part clause by clause.

Clause 7 ordered to stand part of the Bill.

Clause 8 -

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

Mr Rajah: Sir, there are two points on this particular clause. In clause 8 (1) (b) (i), it says "a sum equal to not less than fifty per centum of such net profits;". These are payments which are to be made into the reserve fund - 50 per cent. The quantum is set out, of course. There is no difficulty about it. It is related to the net profits.

4.15 p.m.

In my own experience and in the experience of the Court, they have always found great difficulty in arriving at what net profits are. There is always an argument on what net profits are. Could the Minister inform the House what exactly he thinks net profits are, and whether it would not do some good to this particular clause if the phrase "net profits" is defined? That is the first point.

Then in sub-clause (2):

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

It appears to me that under this sub-clause the banks which have their head offices outside Singapore seem, on the face of it, to he on a more favourable footing. The yardstick for foreign banks is adequacy for its business, but, insofar as local banks are concerned, it is another yardstick. Could the Minister explain to the House what exactly is meant by the "aggregate reserve fund of a licensed bank whose head office is situated outside Singapore"?

Dr Goh Keng Swee: Mr Speaker, Sir, I think it is rather difficult for me at this stage, before we have any experience of administering the Ordinance itself, just to say whether or not any tight definition of "net profits" is necessary. My guess is that it is not necessary because it is not a matter of the banks having to pay out or lose any sum of money which is based on net profits. For instance, in the case of the Income Tax Ordinance, the definition of "net profits" must be a very close one indeed, because it is subject to taxation. But here it is not. I would say that that would be sufficient provided the accounts are set out by a reputable firm of auditors and there is no fiddling about with the expense accounts and so forth. In practice, of course, what I suspect will happen is that most of the banks will have reserve funds in excess of these statutory requirements.

In clause 8 (2), there is no question of treating overseas banks more favourably than locally incorporated banks. So the difficulty is this, that in the case of a locally incorporated bank, you have an easy criterion, that is, the paid-up capital, and so you can relate everything to that. In the case of branch banks with headquarters outside Singapore, this is not always the case. You have to get another entity. In clause 34 (2) (b), for instance, the element which is taken will be the equivalent of the paid-up capital or assets held in Singapore in the form of immovable property or other kind of approved assets. I rather suspect that, in the first instance at any rate, that could be the yardstick whereby clause 8 (2) would be administered.

Mr Rajah: Clause 15 (7)?

Dr Goh Keng Swee: Clause 15 (7), yes.

Mr Rajah: Sir, on clause 8 (1) (b), I appreciate the Minister's difficulties in this matter and I appreciate that until these things are worked, it is very difficult. But I wonder if the Minister realises that non-compliance with clause 8 (1) (b) is an offence punishable under clause 27 which reads:

`Any licensed bank which is guilty of an offence against this Ordinance for which no penalty is expressly provided shall, on conviction, be liable to a fine not exceeding five thousand dollars.'.

So that on a difference of opinion between the Inspector and the bank on the question of what net profits could be, the bank might find itself in the District Court facing a criminal charge, which I think is not a very desirable thing. But, on the other hand, I appreciate that there is a saving clause that no prosecutions will be instituted without the consent of the State Advocate-General and probably in such a case the the State Advocate-General will not sanction a prosecution. I am looking hopefully at the Minister for Law.

The Prime Minister: He does not command the State Advocate-General.

Mr Rajah: No, no. Sir, the other point which I have raised and to which the Minister has not replied - he has tried to answer what is adequate for its business - he has not told us what the aggregate reserve fund of a licensed bank is. I understand what a reserve fund of a particular bank in, Singapore is, but I fail to understand what the aggregate reserve fund of a licensed bank is. I take it that "aggregate" in its normal connotation means the adding of various sums or multiplying by that number. But what does the aggregate refer to - all its branches throughout the world, or all its branches throughout the country, or what?

Dr Goh Keng Swee: I should say the aggregate reserve fund refers to the reserve fund of a branch bank in Singapore.

Mr Byrne: Mr Speaker, Sir, this is provided for in clause 15 (7), where the head office is situated outside Singapore and properly audited reports have to be sent in of the annual balance sheet and accounts of such bank. On compliance there is an exemption from the provisions of the appointment of auditors required under clause 15.

Mr Speaker, Sir, these clauses have been looked at very closely by the State Advocate-General. He has been in correspondence with his opposite number in the Federation. He has been assured that these identical clauses have been in operation in the Federation since 1958 and that there have been no difficulties whatsoever. Everybody understands what net profits are.

Mr Rajah: Mr Speaker, Sir, we are not on the net profits now. I have let the net profits go by on the basis of the Minister's statement. I want to know what an aggregate reserve fund is. I am suggesting to the Minister that it is no answer to tell this House that the State Advocate-General advises him that that is so. If the Minister does not know the answer, let him tell the House that he does not know the answer.

Mr Byrne: Well, he has made his point, Mr Speaker, Sir. This is a piece of comparable legislation. A similar Ordinance has been applied in the Federation from 1958. Have there been any difficulties? The State Advocate-General has made enquiries and he says that no such difficulties have arisen.

Dr Goh Keng Swee: I do not know why the Member for Farrer Park is pursuing this point. If he thinks that there is something technical about it and that certain implications or meanings should be drawn out, he should tell the House. So far as I can see, this is a perfectly simple term. The aggregate reserve fund would refer to all the reserve funds held by the branch in Singapore. It does not refer to the reserve funds held outside, whether in the head office or elsewhere.

Mr Rajah: Mr Speaker, Sir, if I knew the answer, I would not be asking that question. I really do not know what the aggregate reserved fund of a licensed bank, whose head office is situated outside Singapore, is. Unless the Minister is able to tell the House, or somebody - I suppose the Inspector of Banks - must be able to advise these foreign banks what exactly is the aggregate reserve fund which is necessary under clause 8 (1) (b) (ii), because non-compliance with clause 8 (1) (b) (ii), as I have already indicated to the Minister, is punishable under clause 27. Therefore, it is important that this House is told how the aggregate reserve fund under clause 8 (2) is ascertained. I think I am not being unfair. The Minister must I assume have done his homework.

Dr Goh Keng Swee: All that this sub-clause (2) says is that if there is an aggregate reserve fund, then this particular bank will be exempted from the operation of sub-clause (1). If there is no reserve fund held by the branch in Singapore, then the operation of sub-clause (1) would be required by the bank.

Question put, and agreed to.

Clause 8 ordered to stand part of the Bill.

The Chairman: I might explain the procedure. This is an urgent Bill and therefore when I call "clause 9", that is the time when any Member wishing to make an amendment to this clause must move the amendment. There is no notice required for any amendment in regard to urgent Bills. The time to move an amendment to clause 9 is when I say, "Clause 9." When I pose the Question, "The Question is that clause 9 (or any clause) stand part of the Bill," it will he too late to do so.

Clause 9 -

Mr Rajah: Sir, I beg to move,

In page 5, lines 31 and 32, to leave out "local daily English, Chinese and Malay newspapers", and insert "at least one daily English, Chinese, Malay and Tamil newspaper".

I have looked at the Federation Ordinance, and in the Federation the languages in which this requirement concerns itself with are English and Malay newspapers. Here the Government has altered the Bill to read "English, Chinese and Malay newspapers" and I take it it has quite inadvertently left out "Tamil". Mr Speaker. Sir, I have very often heard it said that the Government is not really interested in the Tamil language and that the Tamil language is just a step-sister. I refused to believe it, but after this Bill. I have some grounds for believing it. We have four official languages in this Assembly, and if the Government saw fit to take in Chinese, I do not see why they should not take in Tamil, which s also an official language.

Mr Byrne: Then put in Tamil.

The Prime Minister: All right, agreed.

The Chairman: Can I get this amendment correct? Is this the amendment:

To leave out lines 31 and 32, and insert "at least one English, Chinese, Tamil and Malay newspaper".

Mr Rajah: The words to' be inserted are:

"at least one daily English. Chinese. Malay and Tamil newspaper".

Mr Byrne: At least one?

Mr Rajah: Oh, yes, there is. There you are: Mr Minister does not even know that.

The Chairman: To insert "at least one daily English, Chinese, Malay and Tamil newspaper".

Mr Rajah: Yes. [Interruption]

The Chairman: Order. To leave out lines 31 and 32.

Mr Rajah: And I think it will also obviate the necessity, as the Bill is drafted. Mr Speaker, Sir. It would appear that the publications will have to be in all daily local newspapers. I wonder if the Minister for Law will agree with that. If there were two English newspapers daily, under this Bill as it stands, it will have to be two. Sir, I am really saving the Government this embarrassment of bad drafting, and I have drafted it for them.

The Chairman: It has been proposed as an amendment,

In page 5, lines 31 and 32, to leave out "local daily English, Chinese and Malay newspapers", and insert "at least one daily English, Chinese, Malay and Tamil newspaper",

4.30 p.m.

Mr Rajah: Sir, I have a draft of the amendment here. Perhaps it would quicken matters if I handed it in.

Amendment handed in.

The Chairman: It has been proposed as an amendment,

In page 5, lines 31 and 32, to leave out the words therein, and there to insert "at least one daily English, Chinese, Malay, and Tamil newspaper".

Mr David Marshall rose -

The Chairman: Can I just solve this first? Will the Member for Anson take his seat?

"at least one daily English, Chinese, Malay, and Tamil newspaper".

Mr Byrne: "local".

Dr Goh Keng Swee: "one local news-paper".

Mr Rajah: I beg your pardon, Mr Speaker, Sir. The amendment should read "at least one local daily English, Chinese, Malay, and Tamil newspaper".

The Chairman: I cannot understand it. Does the Member for Farrer Park wish to insert "at least one local daily English, Chinese, Malay and Tamil newspaper"?

Mr Rajah: Mr Speaker, Sir, as I understand it, the intention of the Government here is -

Dr Goh Keng Swee: No, it is a point of grammar.

Mr Rajah: On a point of grammar, yes. I understand that. I was coming to that. In the Federation Bill, Sir, -

The Chairman: Could the Member for Farrer Park indicate whether he wishes the insertion to be in one English newspaper, one Chinese newspaper, one Malay newspaper, and one Tamil newspaper?

Mr Rajah: That is so; four newspapers. That is the intention of the Government, I take it. I am merely preserving that intention, but adding "Tamil" to it and that is the intention of my drafting. Whether I have carried this out, I do not know; but I think I have. Because. Mr Speaker, Sir, if it was to be in one English, Chinese newspaper, then it should have been "or" - "or Tamil newspaper". But as the word "and" appears and "newspaper" appears, I think it makes it clear that it should be at least in one English, one Chinese, one Malay, and one Tamil newspaper.

The Chairman: I do not know whether the Member is satisfied that his intention would be carried out by that.

The Prime Minister: Sir, I accepted the proposal at that time that it should be incorporated. But I think my colleague, the Minister for Law, is a little bit unhappy at the elegance of the phraseology. Perhaps one could get out of the problem of whether there should be an "s" or whether there should not be an "s" with the "newspaper" by putting the "s" in and putting the adjectives "English, Chinese, Malay and Tamil" after the "newspapers".

`publish a copy of its last audited balance-sheet in local daily newspapers, one, in local daily newspapers, one in English. Chinese, Malay and Tamil'

or whatever there is. But if the adjectives follow the "newspapers", there will be less inelegance.

Mr Rajah: It is not a question of inelegance.

In the Federation, Mr Speaker, how they got over the difficulty is this: "publish a copy of its last audited balance-sheet in at least one local daily-Malay newspaper and at least one local daily English newspaper". So if we follow the Federation pattern and say "in at least one local daily Malay newspaper and at least one local daily Tamil newspaper", that will cover it. There will be no misunderstanding. Then there is no room for doubt and no suggestion of inelegance, but merely lengthening the phrase.

Dr Toh Chin Chye: It makes it very clear!

Mr David Marshall: May I offer a suggestion, Mr Speaker, Sir? I would suggest "in at least one local daily newspaper in the English, Chinese, Malay and Tamil languages".

The Chairman: Shall we take the suggestion then: follow the Federation pattern? Does that satisfy the Member?

Mr Rajah: Yes, that will satisfy me.

The Chairman: An amendment then has been moved,

In page 5, to leave out lines 31 and 32, and there to insert "at least one local daily English newspaper, at least one local daily Chinese newspaper, at least one local daily Malay newspaper and at least one local daily Tamil newspaper".

The Prime Minister: May I, Sir, say that if this is ever to be dubbed as -

The Chairman: Is it on verbiage?

The Prime Minister: Purely on verbiage. I do not ever want this to be dubbed as the Assembly's folly. I would suggest we could easily phrase it in this form: "publish a copy of its last audited balance-sheet in one local daily newspaper each in Malay, Chinese, Tamil and English". Then there is no doubt that what we mean is "one local daily each".

Mr David Marshall: One local daily newspaper.

Mr Byrne: One local daily newspaper each.

Dr Goh Keng Swee rose ---

The Chairman: Dr Goh, another solution?

Dr Goh Keng Swee: I am not a jurist, but having some experience in statistics, why not quote the actual figure: "shall be published in four local daily newspapers, one each in so and so languages".

The Chairman: Is the Member for Farrer Park satisfied now?

Mr Rajah: Yes, Sir, I am satisfied.

The Chairman: The amendment now reads:

In page 5, to leave out lines 31 and 32, and there to insert "at least four local daily newspapers, one each in the English -" No; "at least" is not necessary.

"four local daily newspapers, one each in the English, Chinese, Malay and Tamil languages".

It seems to be all right.

The Prime Minister: Supposing there is no newspaper in one of the languages?

The Chairman: Yes, supposing the Tamil newspaper closes down!

Mr Rajah: I am not very happy with the Minister's suggestion, Sir, because we could still get the same position that we got to before - that you could have these advertisements, so to speak, in four different newspapers in the different languages, not necessarily in a Tamil newspaper or a Malay newspaper. I would suggest, with respect to the Prime Minister, let us get back to the Federation Ordinance. It is a bit cumbersome. I know. It is not very elegant, hut I think it is certain and sure.

The Chairman: Shall we then go ahead with that?

In page 5, to leave out lines 31 and 32, and there to insert "at least one local daily English newspaper, at least one local daily Chinese newspaper, at least one local daily Malay newspaper and at least one local daily Tamil newspaper".

The question is, "That the words proposed to be left out, be left out." Is there any Member who wishes to speak on the amendment?

Mr David Marshall: Mr Speaker, Sir, that is very cumbersome, I am afraid.

The Chairman: The Question has now been posed. The Member can always move an amendment when I come to the second Question. The first Question is, "That the words proposed to be left out, be left out".

Question, "That the words proposed to he left out, be left out," put, and agreed to.

The Chairman: The Questing now is, "That the words proposed to be inserted, be there inserted." The words proposed to be inserted are:

"at least one local daily English newspaper, at least one local daily Chinese newspaper, at least one local daily Malay newspaper and at least one local daily Tamil newspaper".

Mrs Seow Peck Leng (Mountbatten): Mr Speaker, Sir, may I offer a suggestion? Have "in at least one local English newspaper", and leave out the other "at least" phrase. So that it will read, "in at least one local daily English newspaper, one Malay newspaper, one Tamil newspaper [and so on]"; instead of repeating the phrase "at least" four times. It stands for all four papers.

The Chairman: That is the suggestion of a school teacher? Is the Member seriously moving an amendment to leave out the words "at least"?

Mrs Seow Peck Leng: Yes.

The Chairman: An amendment to the amendment has been moved,

To leave out the words "at least" where they secondly, thirdly and fourthly occur in the amendment.

Mr David Marshall: May I move an amendment, Mr Speaker, Sir?

The Chairman: Can I have an indication as to what the amendment will be?

Mr David Marshall: Yes, Mr Speaker, Sir. "at least four local daily newspapers, one each published in the English, Chinese, Malay and Tamil languages". [Interruption] Exactly. It seems to me the simplest, clearest -

Mr Byrne: What happens if one newspaper closes down?

The Prime Minister: The problem arises after passing it, you know.

Mr David Marshall: Then you cannot -

The Chairman: I trust the Member for Anson is not critical of the Federation Ordinance.

Mr David Marshall: The Federation has only three.

The Chairman: Let us come to some agreement. What does the mover of the amendment think?

Mr Rajah: Sir, the mover of the amendment thinks of something which is certain. I am not quite sure what the implications of the amendment of the Member for Anson are. If I were sure of that, I would accept it. Although I think this is not very elegant, at least it is sure, and I think it is necessary in a legal enactment to be sure rather than to be elegant.

The Chairman: Is the Member for Anson insisting?

Mr David Marshall: If it please you, Mr Speaker, Sir, it is not merely a question of elegance. We have reached a point of absurdity when we repeat that phrase four times. It is a question of good sense. Would the Member for Farrer Park, who is a lawyer, tell us where it errs - "in at least four local daily newspapers, one each published in the English, Chinese, Malay and Tamil languages"? Where is the ambiguity?

The Chairman: We have wasted quite a number of minutes already on a seemingly simple amendment. Will the Member for Farrer Park now accept that?

Mr Rajah: If the Government carries out the intention. All I am concerned is to get this Tamil newspaper in.

Dr Goh Keng Swee: Amicably!

The Chairman: By leave then, the original amendment is withdrawn. The amendment proposed now by the Member for Anson is,

In page 5, lines 31 and 32, to leave out "local daily English, Chinese and Malay newspapers" and insert "at least four local daily newspapers, one each published in the English, Chinese, Malay and Tamil languages".

Amendment agreed to.

Clause 9, as amended, ordered to stand part of the Bill.

4.45 p.m.

Clauses 10 to 15 inclusive ordered to stand part of the Bill.

Clause 16 -

The Chairman: Part IV. Are there any clauses on which Members wish to speak or to which they wish to move an amendment?

Mr Rajah: Clause 16.

The Chairman: The Member wishes to move an amendment to clause 16?

Mr Rajah: Yes. There are a number of amendments, Mr Speaker, which I wish to move to clause 16. I will hand these amendments to hon. Members.

Amendments handed in.

The Chairman: The second amendment is on page 9, line 35. That seems to be wrong.

Mr Rajah: Sorry, Mr Speaker, Sir. It should he line 7.

The Chairman: Page 9, line 7. Perhaps the Member for Farrer Park should first deal with the first two amendments. They seem to be connected.

Mr Rajah: Yes. It would be convenient if I could deal with the first two amendments. I move,

In page 9, line 5, to leave out, "shall" and insert "may", and in page 9, line 7, at end, to add, "The Clearing House so established shall come into operation on such date as the Minister may by notification in the Gazette appoint."

Mr Speaker, Sir, I have moved the first amendment merely to invite discussion on this particular clause so that we can know exactly what is meant by a clearing house, where it is to be established, who is to run it, and in which premises.

The second amendment is an amendment of substance.

"The Clearing House so established shall come into operation on such date as the Minister may by notification in the Gazette appoint."

It seems to me that although the Minister might create a clearing house, I think it is recognised that the Minister having exercised his power, the exercise of that power should be notified in the Gazette, and that it is only after notification that the power should become effective. So it is with that intention in view that I have moved the second amendment.

The Chairman: I will take one amendment at a time. It has been moved in page 9, line 5, to leave out "shall" and there to insert "may". The Question is, That the word proposed to be left out, he left out."

As indicated, the debate may range over the second amendment, in page 9, line 7, at end, to add "The Clearing House so established shall come into operation on such date as the Minister may by notification in the Gazette appoint."

Mr Rajah: Mr Speaker, Sir, I might add that in the Federation, it is the Central Bank that does it, so that the Central Bank is already established under another Ordinance. There it has a legal entity. There is a Clearing House, something which the Minister is going to create by virtue of this Bill. As the clause now stands, it appears that as soon as he puts his signature to a piece of paper, the Clearing House is created. But I think that state of affairs is undesirable and the coming into operation of the Clearing House should be `by virtue of a notification in the Gazette under the Minister's hand.

Mr David Marshall: Mr Speaker, Sir, in the light of the disclosures made to us this afternoon by the Minister for Finance, which of course, were met with both amazement and consternation, I think there can be no question but that this House make this power compulsory - "he shall". No question of "may" as of now. It is the duty of the Government to protect our economy from the irresponsible conduct and contumacious conduct of these banks. I would certainly not agree to the first amendment. For myself I want to make it quite clear that I am indeed grateful to the Minister for having taken steps already to make possible the establishment of a Clearing House next week.

As to the second amendment, Mr Speaker, it does not seem to me to have any real importance. There are 35 banks involved which will naturally be communicated with. The Clearing House affects the banks directly and not the individual depositors or the payees. They are the persons who have to know when the Clearing House comes into operation, and it seems to me, Sir, that it really does not go any further.

In fact, Sir, I trust I will be given an opportunity - I do not know whether this would be an appropriate time - to ask for the deletion of the words, "at an appropriate time and in conjunction with banks operating in Singapore". Could we discuss that amendment? Mr Speaker, Sir, may I have your leave?

The Chairman: We are now on the amendment to leave out the word "shall". I think we will dispose of that first.

Mr David Marshall: If it please you, Mr Speaker.

The Chairman: Any other Member wishing to speak on this amendment, in page 9, line 5, to leave out the word "shall"?

The Prime Minister: I do not want to say more on this. The art of draftsmanship is not a simple one. I think both the Member for Farrer Park and the Member for Anson will understand that it is an esoteric one which is not for general lawyers. I mean that non-specialists in that particular field of the law should leave it well alone. There may be a whole series of interpretation arising out of an alteration in the phrase. To my mind, the reading of the phrase as it stands, "shall at an appropriate time", really means what the Member for Farrer Park wants to do, namely, to make it a discretion at the appropriate time. What is the appropriate time is a matter which no doubt would be decided by officials and other expert parties, and to change it to "may" does not carry it any further. To leave out "at an appropriate time" means we go into the banking business willy-nilly. Not having gone into this matter, I would say, on first principle, leave it well alone. This is not an amendment of substance. This is an amendment of form. As to form, I say doubtless the State Advocate-General, who has spent some time over it - poring over the principal Ordinance of the Federation from which he has adopted and incorporated several provisos - must have considered all these points. I would rather leave it well alone. I would say, as to the first amendment, we leave both "shall" as it is and a Gazette notification does not carry the point any further. I should imagine long before the Minister puts his pen to paper, they would all be running around to the Clearing House.

Dr Goh Keng Swee: Sir, I do not know whether it will help the Member for Farrer Park rather to say this. Does it really matter whether "I shall do it" or "I may do it"? The point is, "I will do it." As for gazetting this thing, the Member for Anson has said that there are only 35 banks involved. In fact, my Ministry official have already got in touch with them to work out the details of the operation of the Clearing House. I do not think we are arguing a very major point of substance.

Mr Rajah: I think the Minister for Finance has misunderstood me and so has the Prime Minister. I merely move the amendment "shall" to "may" because it is very difficult, under the Standing Orders, to have a complete discussion on the sub-clause going without this particular amendment. The point of the amendment was to invite debate on the question of what this Clearing House is, what it is intended to do, and how it will perform its functions more efficiently than it has done at the present moment. It is only with that intent, and when that part of it has been satisfied, I intend to withdraw that amendment. That is why, when I moved the amendment, I said it is merely one of form, to invite a debate and an explanation of the term "Clearing House", and what it is intended to mean. The subsequent amendment following the word "House" is one of substance. It is one of substance in the sense that although it is a question of 35 banks, I think the Member for Anson and the Hon, the Prime Minister will understand that this is not a private business where the Minister writes to the banks and says a Clearing House is established. It is an Ordinance, it is the law of the country, and it is vital that it should be done by means of a Gazette notification. That is the proper thing to do. We are looking at it as a domestic issue. It is not. It is on the Statute books and in the years to come we want to know when this Clearing House is established and on what particular date.

The Chairman: Can I take it that the Member for Farrer Park wishes to withdraw his first amendment but is pursuing his second amendment?

Mr Rajah: That is so, Sir.

The Chairman: Perhaps the Member wishes for leave to withdraw the first amendment?

Mr Rajah: Mr Speaker, all I wanted was an explanation from the Minister for Finance as to what this Clearing House is, how it is to be established, and what it is going to do that the present clearing system does not do. I have not had a reply yet to all these questions.

The Chairman: It does not arise on the amendment, does it? The amendment merely asks to leave out "shall" and insert "may".

Mr Rajah: How then can I get this explanation?

The Chairman: When the Question on the clause is proposed, "That the clause stand part of the Bill."

Mr Rajah: At a later stage?

The Chairman: Yes.

Mr Rajah: I am satisfied with that. Therefore, may I beg leave to withdraw my first amendment?

Amendment, by leave, withdrawn.

The Chairman: We are now on the second amendment. Will the Member now move formally?

Mr Rajah: Mr Speaker, Sir, I move.

In page 9, line 7, at end, to add "The Clearing House so established shall come into operation on such date as the Minister may by notification in the Gazette appoint."

I do not wish to repeat what I have said. The reason for this is to see that an effective date is set to it, and the effective date will be set in such a way that it could be proved by the production of the Gazette.

5.00 p.m.

The Chairman: Any Member wishing to speak on that?

Dr Goh Keng Swee: I am afraid I cannot agree with this amendment. It seems only 35 banks are involved. I see no reason why it is necessary to resort to a Gazette notification.

The Chairman: It involves expense.

Amendment negatived.

The Chairman: We might take some time over this Bill. Perhaps we had better suspend.

Thereupon Mr Speaker left the Chair of the Committee and took the Chair of the Assembly.

Mr Speaker: I suspend this Assembly and take this Chair again at 5.30 p.m.

Sitting accordingly suspended at 5.01 p.m. until 5.30 p.m. Sitting resumed at 5.30 p.m.