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Select Committee on Finance and General Affairs díospóireacht -
Thursday, 6 Feb 1997

SECTION 9.

I move amendment No. 2:

In page 8, subsection (1), line 38, to delete "Where" and substitute "The Bank shall decide to approve or refuse to approve the rules of a system within three months of the receipt of a submission under section 8(1) and where".

This amendment is designed to impose a reasonable time limit on the bank to process its decision to approve or refuse to approve the rules of an existing or proposed payments system. It was requested by the Irish Banker's Federation. As section 9 is currently drafted there is no such time limit imposed on the bank. A three month time limit is seen as reasonable by the industry and the bank and is consistent with similar time limits placed on the bank in other areas of its banking supervision.

The Minister for Finance has kindly agreed to insert this amendment. The Irish Banker's Federation put forward a reasonable proposition on a time limit which is appropriate nowadays in all forms of State activity. Otherwise, matters such as this go on ad infinitum.

Amendment agreed to.

I move amendment No. 3:

In page 9, subsection (3)(b), line 20, to delete "heard" and substitute "considered".

There is a need to standardise the treatment of representations received from payments systems in regard to applications for the approval of their rules by the bank. Under section 9 the bank must not make a decision on the approval or the refusal of rules until it has heard all representations. However, in cases of appeals against the refusal of the bank to approve rules, under section 10 the Minister must consider all representations.

Amendment agreed to.

I move amendment No. 4:

In page 9, subsection (4), line 26, after "liable" to insert ", by reason of its approval,".

Section 9(4) is a standard provision which provides that the bank shall not be liable in respect of any losses incurred through the insolvency or default of a company it licences or approves. However, if the Central Bank becomes a member of a payments system, it should be liable on the same basis as any other member to the debts of the system in cases of default. The purpose of this amendment is to confirm that the bank's indemnity against losses caused through insolvency or default of a system shall only apply in regard to the bank's approval of the rules of that system and not in regard to the bank's participation in that system.

Amendment agreed to.
Section 9, as amended, agreed to.
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