CHAPTER 139 - BANKS, SAVINGS SOCIETIES AND TRUST COMPANIES RESERVES

AN ACT TO AMEND CHAPTER 66 OF THE REVISED CODE OF DELAWARE, 1935, RELATING TO "BANKS, SAVINGS SOCIETIES AND TRUST COMPANIES", IN REFERENCE TO RESERVES.

Be it enacted by the Senate and House of Representatives of the State of Delaware in General Assembly met:

Section 1. That Chapter 66 of the Revised Code of Delaware, 1935, be and the same is hereby amended by striking out and repealing all of 2298. Sec. 41. thereof, and inserting in lieu thereof a new Section, to be styled 2298. Sec. 41. as follows:

2298. Sec. 41. Reserves Must Be Maintained; Of What To Consist:—Demand deposits as used in this Section shall mean all deposits payable within thirty days; and time deposits shall comprise all deposits payable after thirty days, all savings accounts and certificates of deposit which are subject to not less than thirty days' notice before payment, and all Postal Savings deposits.

Every bank, banking association, trust company, savings bank or savings society shall maintain liquid reserves as follows:

(a) Ten per centum of the aggregate of its demand deposits. Such reserve may consist either of lawful money of the United States, gold certificates, silver certificates or notes and bills issued by any lawfully organized National banking association, Federal Reserve Bank notes or of money on deposit subject to call in any bank or trust company in this State having a capital of at least One Hundred Thousand Dollars and a surplus of at least One Hundred Thousand Dollars, and approved by the State Bank Commissioner, or in any bank or trust company, or with any individual banker or firm of bankers, approved by the said State Bank Commissioner, doing business either in the City of Philadelphia, the City of New York, or the City of Baltimore.

(b) Five per centum of the aggregate of its time deposits. Such reserve may consist of money on deposit subject to call in any of the depositories hereinbefore specified with regard to demand deposit reserves, or of lawful money of the United States, gold certificates, silver certificates, or notes and bills issued by a lawfully organized National banking association, or Federal Reserve Bank notes.

The State Bank Commissioner is hereby authorized and empowered in addition to all other powers, whenever in his judgment circumstances warrant it, to increase or decrease reserve requirements by general rule or regulation applicable to all banks over which he shall have jurisdiction; provided such requirements shall not at any time be reduced below the amounts above set forth; and provided further that such requirements shall not exceed the reserve requirements of the Federal Reserve Bank in this district applicable to member banks in this State.

No money received in a fiduciary capacity, whether as executor, administrator, guardian, trustee or otherwise shall be carried or counted as a part of the reserves above required.

The State Bank Commissioner may upon application by any bank, trust company, or 'savings bank or savings society, if he shall deem it advisable so to do give such applicant written permission to make up one-half of its reserve in bonds or other obligations of the United States owned absolutely by such applicant and unhypothecated and unpledged, counting such bonds or other obligations at ninety per centum of their market value.

If the reserve of any corporation comprehended by this Section shall be less than prescribed by this Section, such corporation shall not make any new loans or discounts, other than discounting bills of exchange payable on sight, or declare or pay any dividends until the full amount of its reserve shall have been restored.

Upon failure of any such corporation to make good its reserve within thirty days after notice from the State Bank Commissioner, the said Commissioner may treat such corporation as in an unsound condition and may proceed against it accordingly.

Approved April 17, 1941.