§ Mr. Marten
asked the Chancellor of the Exchequer what restrictions and consents are now placed upon British-based banks in making loans to overseas borrowers.
§ Mr. Dell
Sterling loans to nonresidents require exchange control consent. However, permission has been given to authorised banks, broadly, to provide credit to non-residents for up to 180 days in respect of current shipments of goods between the Scheduled Territories and the rest of the world, and between any countries where a United Kingdom merchant is involved. Banks may also provide credit to non-residents for up to nine months to finance the import in the Scheduled Territories within that period of primary products where this has been traditional. In addition, banks may make available by way of loan or overdraft the pre-shipment finance mentioned above and funds to re-finance Scheduled Territories' exports, and they may likewise advance up to £25,000 to non-residents living in the United Kingdom for expenditure within the United Kingdom. Banks314W may also grant new credit facilities to their branches, to banks and to other customers resident in the overseas sterling area provided that the facilities are linked to the export or import of goods, and may grant fluctuating overdraft facilities of a personal nature to residents of the overseas sterling area up to an account of £1,000 outstanding at any one time. Other sterling area up to an amount of £1,000 residents are, in general, not allowed, except in certain circumstances for a few days.
Specific exchange control consent is not required for the lending of foreign currency deposited with United Kingdom authorised banks, but such banks are required to observe certain dealing limits on, for example, their net foreign currency position at the close of business each day.