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

SECTION 10.

Question proposed: "That section 10 stand part of the Bill."

I understand section 10 applies a procedure where the Central Bank proposes to refuse to approve of the rules of the payments system. When it communicates to the applicant that it was refused, will the grounds for refusal be set out? If one is refused in applications to other State organisations, the grounds for refusal are set out.

In current banking practice, for example the refusal of a licence, the grounds are not normally set out on the formal refusal but the grounds for refusal will be well known to both parties in advance of that. I am not sure there will be any change in that practice. Does the Deputy suggest the grounds for refusal be laid out?

Yes. I am sure the Minister of State notices in almost all activities in public life, one often sees applications made to the courts for the rules of natural justice to be followed etc. even to do with applications for diverse bodies such as clubs. With the Central Bank, some applicants will go to court for discovery to get the grounds for refusal. It would be reasonable in an application for a payments system to put forward the grounds on which the applicant was refused.

The Deputy makes sense. Section 10(2)(a) provides that the bank, whenever it intends to refuse to approve the rules of an existing or proposed system shall notify the system or the proposer of the system in writing that it intends to seek the consent of the Minister to its refusal and setting out the reasons for its refusal and the system or the promoter of the system may make representations within 21 days of the bank's notification in regard to the refusal. The Deputy's concerns are taken care of by that. The reasons for the refusal are specified. The chances of it getting to that point are extremely rare because for reasons of reputation an applicant would not like to get to the stage where he has to be refused and the reasons laid out for the refusal. Normally, these matters are sorted out well in advance of a formal application.

Question put and agreed to.
Sections 11 and 12 agreed to.
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