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22 1942

CENTRAL BANK ACT, 1942

PART II.

Establishment of the Central Bank of Ireland and Dissolution of the Currency Commission.

Establishment of the Bank.

5. —(1) On the appointed day there shall be and is hereby established in accordance with this Act a body to be called and known as Banc Ceannais na hEireann or, in the English language, the Central Bank of Ireland, to fulfil the functions assigned to it by this Act.

(2) The Bank shall be a body corporate with perpetual succession and an official seal (which shall be judicially noticed) and power to sue and be sued in its corporate name and to hold and dispose of land.

(3) The Bank shall be conducted and managed in accordance with this Act by a Board of Directors consisting of—

(a) a Governor, and

(b) three Directors to be known and in this Act referred to as banking Directors, and

(c) such number of other Directors (not exceeding five and not including at any one time more than two service Directors) as the Minister shall from time to time determine.

(4) The functions, powers, and duties of the Bank shall be exercised and performed by the Board of Directors for and in the name of the Bank.

(5) It shall be lawful for the Board to do, by regulations made by the Board, all or any of the following things, that is to say:—

(a) authorise the setting up of committees of the Board consisting of one or more members of the Board either solely or together with one or more officers of the Bank;

(b) regulate the procedure and define the functions, powers, and duties of any committee so set up;

(c) delegate to any such committee the exercise and performance of any one or more of the functions, powers, and duties of the Bank or of the Board;

(d) delegate to the Governor (including the Deputy Governor) or to any Director or to any two or more members of the Board or to any one or more officers of the Bank the exercise and performance of any one or more of the functions, powers, and duties of the Bank or of the Board;

(e) impose conditions, limitations, or restrictions on the exercise and performance by any such committee or persons or person of the functions, powers, and duties delegated to them or him under this sub-section;

(f) provide in appropriate cases for the review by the Board of decisions taken or things done by any such committee or persons or person in the exercise or performance of any function, power, or duty delegated to them or him under this sub-section.

(6) Section 9 of the Ministers and Secretaries Act, 1924 (No. 16 of 1924), shall not apply to the Bank.

General function and duty of the Bank.

6. —(1) In addition and without prejudice to the functions, powers, and duties vested by law in the Commission immediately before the appointed day and to such functions, powers, and duties as are specifically conferred or imposed by this Act on the Bank, the Bank shall have the general function and duty of taking (within the limit of the powers for the time being vested in it by law) such steps as the Board may from time to time deem appropriate and advisable towards safeguarding the integrity of the currency and ensuring that, in what pertains to the control of credit, the constant and predominant aim shall be the welfare of the people as a whole.

(2) The Minister may, on such occasions as he shall think proper, request the Governor on behalf of the Board or the Board to consult and advise with him in regard to the execution and performance by the Bank of the general function and duty imposed on the Bank by the foregoing sub-section of this section, and the Board shall comply with every such request.

Certain particular powers of the Bank.

7. —(1) It shall be lawful for the Bank to do, for the purposes of or through the general fund, all or any of the following things on such occasions and to such extent as the Board shall think proper, that is to say:—

(a) buy or sell coin or gold or silver bullion or any foreign currency;

(b) receive deposits (not bearing interest) from a Minister of State or any public authority or any Associated Bank, or any other bank or credit institution carrying on business wholly or partly within the State;

(c) open accounts in other countries or act as agent, depository, or correspondent of any bank carrying on business in or outside the State;

(d) with the consent of the Minister, acquire, hold, or dispose of shares in any international bank formed wholly or mainly by banks which are the principal currency authority in their respective countries;

(e) re-discount exchequer bills and bills of local authorities which have previously been accepted, discounted, or endorsed by an Associated Bank or any other bank or credit institution carrying on business wholly or partly within the State and which mature in not more than twelve months from their date;

(f) re-discount bills of exchange which are, in the opinion of the Board, first class commercial bills and mature, in the case of bills drawn for agricultural purposes or based on live stock, in not more than twelve months (excluding days of grace) from their date or, in any other case, in not more than six months (excluding days of grace) from their date;

(g) fix and publish from time to time the minimum rate or rates at which the Bank will re-discount such exchequer bills, bills of local authorities, or bills of exchange as are mentioned in either of the two next preceding paragraphs of this sub-section;

(h) buy, hold, or sell securities of or guaranteed by the State which have been offered for public subscription or tender before being bought by the Bank and are officially quoted on the Dublin Stock Exchange and the Cork Stock Exchange or securities of or guaranteed by the Government of any other country;

(i) buy, hold, or sell securities of any public authority which are authorised by law for the investment of trust funds and have been offered for public subscription or tender before being bought by the Bank and are officially quoted on the Dublin Stock Exchange and on the Cork Stock Exchange;

(j) make loans or advances to banks and other credit institutions (carrying on business wholly or partly within the State) on the security of such bills of exchange as the Bank is hereinbefore empowered to re-discount or of such securities as the Bank is hereinbefore empowered to buy, or of gold coin or bullion or of documents relating to the shipment or storage of gold coin or bullion;

(k) keep registers of securities of the State;

(l) keep, for or on behalf of any public authority, registers of any stock issued by such authority;

(m) keep the accounts of any bankers' clearing.

(2) Each of the following bodies shall be a public authority for the purposes of the foregoing sub-section of this section, and the expression “public authority” shall in that sub-section be construed and have effect accordingly, that is to say:—

(a) a commission, board, or other body (whether corporate or unincorporated) charged by law with the execution throughout the State of functions of government or public administration or with the administration throughout the State of any public service (including the provision of credit but excluding transport), and

(b) a corporation, council, committee, or other body (whether corporate or unincorporated) charged by law with the execution of functions of local government within a defined area of the State or the execution of functions of public administration or public service (other than transport) of a local character.

Certain further powers of the Bank.

8. —It shall be lawful for the Bank to do all or any of the following things on such occasions and to such extent as the Board shall think proper, that is to say:—

(a) make provision for the collection and study of data relating to monetary and credit problems and publish informative material in regard thereto;

(b) establish and maintain, either directly or indirectly, contact with the monetary authorities established in other countries;

(c) do all such things as may be ancillary or incidental to or consequential on the exercise of any of the powers or the performance of any of the duties conferred or imposed on the Bank by this or any other section of this Act or from time to time conferred or imposed on the Bank by law.

The capital of the Bank.

9. —(1) The capital of the Bank shall be the sum of forty thousand pounds whereof the sum of twenty-four thousand pounds shall be paid to the Bank by the Minister on the appointed day or as soon thereafter as may be and whereof the residue shall be paid to the Bank by the Minister at such time or times as may be agreed upon by the Board and the Minister.

(2) All moneys payable to the Bank by the Minister under the foregoing sub-section of this section shall be charged on and paid out of the Central Fund or the growing produce thereof.

(3) When the Minister has paid to the Bank the sum of twenty-four thousand pounds in pursuance of the foregoing provisions of this section, the Bank shall forthwith repay to every bank which is a Shareholding Bank immediately before the appointed day all sums paid by such bank to the Commission in pursuance of section 64 of the Currency Act together with the appropriate dividend on every such sum for the period from the last date up to which dividend had been paid thereon to the date of such repayment.

(4) Sub-section (4) of section 63 of the Currency Act is hereby amended by the deletion of the words “for the time being paid up by Shareholding Banks on account of their capital liability”, and the insertion in the said sub-section of the words “of the capital of the Bank for the time being paid up” in lieu of the words so deleted.

The seal of the Bank.

10. —(1) The Bank shall provide itself with a seal on or as soon as may be after the appointed day.

(2) The seal of the Bank shall be authenticated by the signature of the Governor or of a Director authorised in that behalf by the Board and by the counter-signature of the secretary of the Bank or some other officer of the Bank authorised in that behalf by the Board.

(3) Every document purporting to be made or issued by the Bank and to be sealed with the seal of the Bank authenticated in the manner provided by this section shall be received in evidence and shall, without proof of the signature or the authority of any of the persons purporting to sign or counter-sign such document, be deemed, until the contrary is proved, to have been made or issued by the Bank.

(4) Until the Bank shall have provided itself with a seal in pursuance of this section, the seal of the Commission shall be deemed to be the seal of the Bank and it shall be lawful for the Bank to use the seal of the Commission accordingly.

(5) When the Bank has provided itself with a seal in pursuance of this section, the Board shall cause the seal of the Commission to be so broken or defaced as to be incapable of being used.

Interpretation of references to the Commission in the Currency Act, 1927 .

11. —(1) On and after the appointed day and subject to the repeals and amendments effected by this Act, the Currency Acts, 1927 and 1930, shall have effect with and subject to the modification that every mention of or reference to the Chairman shall be construed as a mention of or reference to the Governor and every mention of or reference to the Commission shall be construed as a mention of or reference to the Bank, save that any such mention or reference which, expressly or by necessary implication, refers to the members of the Commission shall be construed as a mention of or reference to the Board.

(2) A legal tender note may, on and after the appointed day, be either of such form, size and design and printed in such manner and on such paper and numbered and authenticated in such manner as shall have been prescribed (whether before or after the passing of this Act) by the Commission under sub-section (2) of section 45 of the Currency Act (as modified by the foregoing sub-section of this section) before the appointed day or of such form, size and design and printed in such manner and on such paper and numbered and authenticated in such manner as shall be prescribed by the Bank under the said sub-section (2) of the said section 45 (as modified as aforesaid) on or after the appointed day.

(3) A consolidated bank note may, on and after the appointed day, be either of such form, size and design, and printed in such manner and on such, paper and numbered and authenticated in such manner as shall have been prescribed (whether before or after the passing of this Act) by the Commission under sub-section (3) of section 51 of the Currency Act (as modified by the first sub-section of this section) before the appointed day or of such form, size and design and printed in such manner and on such paper and numbered and authenticated in such manner as shall be prescribed by the Bank under the said sub-section (3) of the said section 51 (as modified as aforesaid) on or after the appointed day.

The Associated Banks.

12. —(1) There shall be associated with the Bank such other banks as are specified or provided for in this section and those banks shall be known and are in this Act referred to as Associated Banks.

(2) The eight banks named in the second column of the Third Schedule to this Act shall, on the appointed day, become and be Associated Banks.

(3) Sections 42 and 43 of the Currency Act shall, on and after the appointed day, apply and have effect in relation to the Associated Banks with and subject to the modifications that the expressions “the Board”, “Associated Banks”, and “Associated Bank” shall respectively be substituted for the several expressions “the Commission”, “Shareholding Banks”, and “Shareholding Bank” wherever the latter expressions respectively occur in the said sections 42 and 43 .

(4) Every reference to or mention of the Shareholding Banks (whether in the singular or the plural) contained in the Currency Act (other than sections 42 and 43 ) shall be construed and have effect on and after the appointed day as a reference to or mention of the Associated Banks (in the singular or the plural as the case may require).

(5) Sub-section (4) of section 5 of the Currency (Amendment) Act, 1930 (No. 30 of 1930), is hereby amended by the deletion therefrom of the word “Shareholding”.

Admission of a bank to be an Associated Bank.

13. —(1) Any bank may, at any time, on or after the appointed day, apply to the Minister to be admitted to be an Associated Bank, and the Minister, after consultation with the Board, may in his absolute discretion grant or refuse such application.

(2) Whenever the Minister grants under this section an application by a bank to be admitted to be an Associated Bank, such bank shall, as on and from the date on which such application is granted, become and be an Associated Bank for the purposes of this Act and of the Currency Act as applied, modified, or amended by this Act.

(3) The Minister may require a bank applying under this section to be admitted to be an Associated Bank to furnish to him such information in relation to its business and to permit the Governor or a permanent officer of the Bank specially authorised in that behalf in writing by the Minister to make such inspection of its books as appears to the Minister to be necessary for the due consideration by him of such application.

Removal of a bank from being an Associated Bank.

14. —(1) The Minister may, at any time on or after the appointed day, in his absolute discretion remove any Associated Bank from being an Associated Bank either (after consultation with the Board) on any of the grounds expressly authorised by the Currency Act as adapted by this Act or (with the consent of the Board) on any other ground which appears to the Minister to be sufficient.

(2) Any Associated Bank may, at any time on or after the appointed day, apply to the Minister to be removed from being an Associated Bank, and, whenever such application is so made by an Associated Bank, the Minister shall forthwith remove such bank from being an Associated Bank.

(3) Whenever the Minister removes under this section an Associated Bank from being an Associated Bank, such bank shall forthwith cease to be an Associated Bank, but such removal shall not prevent the subsequent admission under this Act of such bank to be an Associated Bank nor relieve such bank from liability to pay on due presentation the amount of every consolidated bank note outstanding with it at the time of such removal or from liability for payments on consolidated bank notes outstanding with it whether before or after such removal.

(4) Except when an Associated Bank is removed on its own application, the Minister shall not remove under this section an Associated Bank from being an Associated Bank without giving such bank a reasonable opportunity of being heard.

(5) No banking Director shall vote on any resolution relating to the removal of an Associated Bank of which he is a director or by which he is employed.

Dissolution of the Commission.

15. —(1) On the appointed day, the Commission shall become and be dissolved and the members thereof shall cease to hold office but shall not thereby be rendered ineligible for appointment as the Governor or a Director of the Bank.

(2) On the appointed day the following provisions shall have effect, that is to say:—

(a) the legal tender note fund, the note reserve fund (if then subsisting), and the general fund as they respectively subsist immediately before the appointed day and all investments, moneys, and assets then comprised in those funds respectively and also all other property, whether real or personal (including choses-in-action), which immediately before the appointed day is vested in or held by the Commission shall, on the appointed day and without any conveyance or assignment but subject, where necessary, to transfer in the books of any bank, corporation, or company, become and be vested in the Bank for all the estate, term, and interest for which the same were vested in the Commission immediately before the appointed day;

(b) any property transferred by the foregoing paragraph of this sub-section to the Bank which, immediately before the appointed day, is standing in the books of any bank within the jurisdiction of the Oireachtas in the name of the Commission or is registered in the books of any bank, corporation, or company within the said jurisdiction in the name of the Commission shall, upon the request of the Board made on or at any time after the appointed day, be transferred in such books by such bank, corporation, or company into the name of the Bank;

(c) where any property transferred or expressed to be transferred to the Bank by paragraph (a) of this sub-section is, immediately before the appointed day, situate outside the jurisdiction of the Oireachtas or is standing or registered in the books of any bank, corporation, or company outside the said jurisdiction, it shall be the duty of the Board to take all such steps as may be requisite to secure the transfer to the Bank of the legal and effective ownership of such property;

(d) every chose-in-action transferred to the Bank by paragraph (a) of this sub-section may be sued upon, recovered, or enforced by the Bank in its own name, and it shall not be necessary for the Bank to give notice to the person bound by such chose-in-action of the transfer effected by the said paragraph;

(e) every debt and other liability (including unliquidated liabilities arising from torts or breaches of contract) which, immediately before the appointed day, is owing and unpaid or has been incurred and is undischarged by the Commission shall, on the appointed day, become and be the debt or liability of the Bank and shall be paid or discharged by and may be recovered from or enforced against the Bank accordingly;

(f) every contract made between the Commission and any other person which is in force or is enforceable immediately before the appointed day and is not fully performed or executed shall, on the appointed day, become and be a contract between the Bank and the said other person and shall be enforceable by or against the Bank accordingly.

(3) The amount of all stamp duties paid (whether in pursuance of the laws of the State or of the laws of another country) by the Bank in respect of any transfer or conveyance of property which is executed in order to supplement or give full effect to the transfer of such property effected by the next preceding sub-section of this section shall be refunded to the Bank by the Minister out of moneys provided by the Oireachtas.

(4) Every person who, immediately before the appointed day, is in the employment of the Commission in any capacity shall, on the appointed day, become and be transferred to the employment of the Bank in the same capacity and with the same tenure, remuneration, and conditions of service as he had in the employment of the Commission immediately before the appointed day, and in order to secure to every such person on and after the appointed day the like rights and benefits (if any) in relation to superannuation and compensation for loss of employment as he had immediately before the appointed day, the following provisions shall have effect, that is to say:—

(a) every scheme made by the Commission under sub-section (4) of section 31 of the Currency Act which is in force immediately before the appointed day shall continue in force on and after the appointed day and shall be observed and performed by the Bank accordingly;

(b) for the purposes of every scheme continued in force by the foregoing paragraph of this sub-section and of every scheme which may be made by the Bank under the said sub-section (4) of section 31 on or after the appointed day, service in the employment of the Commission (including service in any other employment which is deemed by such scheme to be service in the employment of the Commission) shall be deemed to be service in the employment of the Bank and the period of service (including service deemed as aforesaid) of any person in the employment of the Commission ending immediately before the appointed day and the period of service of such person in the employment of the Bank beginning on and continuing after the appointed day shall be deemed to be one continuous period of service in the employment of the Bank.

Appointments to the staff of the Bank.

16. —(1) Subject to the provisions of the next following sub-section of this section, every appointment, under sub-section (2) of section 31 of the Currency Act of an officer or servant of the Bank shall be made by competition (including a qualifying or competitive test in Irish) to be conducted according to regulations to be made by the Board, and the Board may, in relation to any such competition, impose such conditions of entry, limitations, and safeguards as it thinks proper.

(2) The foregoing sub-section of this section shall not apply to appointment to a position in respect of which appointment by competition is, in the opinion of the Board, unsuitable.

Copyright in notes issued by the Bank.

17. Section 12 of the Industrial and Commercial Property (Protection) (Amendment) Act, 1929 (No. 13 of 1929), shall apply and have effect in relation to legal tender notes and consolidated bank notes respectively issued by the Bank in like manner and as fully as it applies and has effect in relation to legal tender notes and consolidated bank notes issued by the Commission, save that the copyright in any such notes issued by the Bank shall belong, by virtue of the said section 12 , to the Bank.

General adaptation of references to the Commission.

18. —Every mention of or reference to the Commission which is contained in any enactment (other than the Currency Acts, 1927 and 1930) in force on the appointed day shall, on and after that day, be construed and have effect as a mention of or reference to the Bank.