HC Deb 16 October 1991 vol 196 cc158-63W
Mr. Andrew MacKay

To ask the Chancellor of the Exchequer if he has any plans to review the Banking Act 1987 in the light of the collapse of BCCI.

Mr. Norman Lamont

I refer my hon. Friend to the statement I made on 19 July, at columns 715–29, and the statement made by my right hon. Friend the Prime Minister on 22 July, at columns 757–64.

Mr. Vaz

To ask the Chancellor of the Exchequer what discussions he has had with the Governor of the Bank of England concerning the latter's statement that BCCI had a criminal culture and the effect of that statement on the careers of members of staff; and if he will make a statement.

Mr. Maples

I know that the Governor did not intend to imply that all the staff of the BCCI were dishonest or involved in the fraud which led to the closure of the bank. Such an implication is patently not true. Hon. Members may also wish to know that I issued the following statement to the press on 4 OctoberThe Government has always made it clear that they would like to see depositors get as much of their money back from BCCI as possible. However, as I said to the House in July, I have always thought that a restructuring would prove difficult to achieve in the circumstances and that now also seems to be the conclusion of the Abu Dhabi Government. There was, of course, no question of either the Bank of England or the Government being obstructive in this. The Bank have always said they would look at any proposal put to them and there would certainly have been no question of the Government obstructing a successful restructuring had one proved possible. But in fact no proposal has been put forward. I recognise that this is very disappointing for the employees. The Abu Dhabi Government appear to have made generous proposals to assist them. I hope the staff will find work again soon. In July, the Chancellor, commented in the House that it would be monstrously unfair if honest, hardworking employees of BCCI were tainted by the actions of their superiors. I hope that prospective employers will not hold the fact that they worked for BCCI against them. Depositors will get compensation from the statutory deposit protection scheme as soon as a winding up order is made. I understand the provisional liquidator is still in discussion with the shareholders about the global position. In the meantime, interim compensation is being provided by the scheme put in place by the Abu Dhabi Government. I understand that the vast majority of depositors with the United Kingdom branches stand to get back 75 per cent. of their full deposit under the statutory scheme. The extent to which depositors will get back the rest of their money will obviously depend on the outcome of the liquidation.

Mr. Knowles

To ask the Chancellor of the Exchequer what is being done to help Asian businesses affected by the closure of BCCI to arrange new banking facilities.

Mr. Maples

The Government have been most concerned by the continuing stories that Asian businesses affected by the closure of the BCCI are having difficulties establishing new banking facilities. We have therefore taken steps to publicise again the help available from the clearing banks, the provisional liquidator Touche Ross, and Government Departments. The details were again set out in a letter which I sent to Mr. Nirj Deva on 30 September and which was also issued as a Treasury press notice. The text is as follows and has been published in theDaily Jang. We have also placed an advertisement setting out the various helpline numbers in the Asian Trader, which is widely distributed. Nirj Deva Esq 433 Chiswick High Road London W4 4AU 30 September 1991 We have spoken recently about the effect which the closure of BCCI has had on the many small Asian businesses which banked with it. As I told you, I have been concerned about the continuing stories that some of these businesses are still having problems establishing new banking facilities. I have been even more concerned at reports that the Asian community believe that the Government is indifferent to their problems, or worse, that BCCI has closed down because it was an Asian bank. Nothing, I can assure you could be further from the truth. BCCI was closed by the international regulators who authorised and supervised it because of evidence of a massive fraud striking at the heart of the operation. The nationality of those involved was irrelevant. The Government has, however, been acutely aware that many of those who have suffered from the closure of the UK branches are Asian businessmen and small depositors and it is a matter of deep concern to us that so many thriving, profitable businesses of such value to the economy have been so badly damaged. We have the highest possible respect for the Asian community. They are hard working, self sufficient and epitomise everything that we have tried to foster over the past twelve years. That they should so disproportionately have been the victims of this bank fraud is truly tragic. Because of my concern for the effect on small businesses, both I and my officials have been in regular touch with the Bank of England to ensure that everything that can reasonably be done to help them is being done. I spoke to the Governor again recently because of the continuing stories about the problems small businesses were having, and the Bank pursued the matter with the clearing banks. As I think you are aware, the clearers responded very positively after the closure of BCCI on 5 July, nominating contact points in their branches to deal with potential customers from BCCI. But they have reported that surprisingly few customers of BCCI have approached them. Similarly, Touche Ross the provisional liquidators have also been doing everything they can to help. From the outset, they made arrangements for customers to release their banking records to the clearers, and they have also been working very hard to find ways of releasing security held by BCCI. This has been taking some time in some cases. As provisional liquidators, they cannot simply release the security without establishing the customers' net position with the bank, and that can take time where the banking relationship of the particular customer in question was complex. But I understand that they have now dealt with all but a comparatively few difficult cases. Most of the businessmen who approached them for help now have new banking facilities established with one of the clearers. Touche Ross also, however, report that surprisingly few businesses have contacted them. Clearly, neither the clearers nor the provisional liquidator can give assistance unless they are actually asked. I am therefore attaching to this letter a list of clearing bank contact points and the telephone number of Touche Ross and copying the letter to the press, in the hope that the information will therefore reach as many of those who need it as possible. If there are other ways in which I could bring this information to the attention of the Asian business community, please let me know. I am also taking this opportunity to include some information about the Department of Employment Loan Guarantee scheme and the DTI Enterprise Initiative, both of which may be of use to businesses affected by the closure of BCCI. The Loan Guarantee scheme offers a Government guarantee of 70 per cent. (85 per cent. in Inner City Task Force Areas) on loans of up to £100,000 from participating commercial banks, where a small firm is unable to offer security or lacks the track record normally required by banks and other financial institutions involved in the scheme. Details can be obtained from the address on the attached list. Any business which applies will have to provide a business plan, and it has been suggested to us that may present a problem for some of the smaller businesses affected by the closure of BCCI. The DTI Enterprise Initiative can assist in arranging consultancy services to help a small business prepare such a plan. Further information can be obtained from the contacts on the attached list. In some cases, however, all that may be needed is guidance and assistance from more experienced businessmen in the local community or a professional advisor, such as the business's usual accountant. Both may be able to assist a small business in presenting its case to the clearing banks. I hope this information will be useful. I am very concerned about the continuing stories of Asian businesses having problems and I would welcome any further information you and others can offer about the specific problems being experienced so that we can see what more, if anything, might be done to resolve them.

John Maples.

Helpline numbers and points of contact for BCCI customers

  1. 1. The following banks have set up helplines and/or branch contact points:
    1. (a) Bank of Scotland: 031 243 5524
      • 031 243 5542
    2. (b) Clydesdale: 041 223 2532
      • 041 223 2899
    3. (c) Lloyds:
      • Branch contacts
      • London
        • Bayswater 071 221 4218
        • Berkeley Square 071 491 4239
        • Commercial Road 071 790 2445
        • Covent Garden 071 836 3045
        • Earl's Court 071 835 1464
        • Whitechapel High Street 071 709 0491
        • Fenchurch Street 071 481 4991
        • Kensington High Street 071 938 2171
        • Knightsbridge 071 589 2223
        • Marble Arch 071 723 4247
        • Old Bond Street 071 629 0288
        • Paddington 071 723 0131
        • Pall Mall 071 839 1288
        • Park Lane 071 409 3545
        • South Kensington 071 589 4883
        • Swiss Cottage 071 722 7144
      • Outer London
        • Southall 081 574 7922
        • Croydon 081 649 7711
        • Wembley 081 903 6366
      • Provincial branches
        • Birmingham, Colmore Row 021 233 1255
        • Bradford 0274 783181
        • Leeds, Park Row 0532 448181
        • Manchester, King Street 061 833 0222
      • Isle of Man, Douglas
        • Regent Street 071 734 4090
    4. (d) National Westminster:
      • Branch contacts
      • London
        • Piccadilly Circus 071 434 3151
        • Orchard House, Oxford Street 071 408 1232
        • Bush House, Aldwych 071 836 5593
      • London South West
        • Southall 081 574 2300
      • London South East
        • Croydon 081 681 3199
        • Lewisham 081 318 7331
        • Tooting 081 672 7611
      • West Midlands
        • Handsworth 021 523 6111
        • Digbeth 021 643 6922
        • Birmingham, Bennctts Hill 021 643 8941
      • Manchester
        • Manchester, 33 Piccadilly 061 236 5642
        • Manchester, City Office 061 829 1420
        • Oldham 061 633 3005
      • London North West
        • Wembley 081 903 1303
          • 162
        • Wembley Park 081 904 1407
        • Islington 071 359 3716
      • City
        • Eastern 071 377 0844
        • London, Fruit Exchange 071 247 1077
      • London North East
        • Limehouse 071 538 2363
      • Lancashire
        • Blackburn 0254 263571
        • Preston 0772 58276
      • East Midlands
        • Leicester, Granby Street 0533 550033
        • Rose Hill, Derby 0332 43279
        • Nottingham. Senior Manager's Office 0602 422220
      • North
        • Glasgow 041 221 6981
      • Yorkshire
        • Leeds, City Office 0532 443151
        • Bradford, Market Street 0274 390801
        • Sheffield, City Office 0742 756677
        • Newcastle upon Tyne 091 261 2221
    5. (e) Midland: 071 260 6921
      • Midland Branch contacts
        • Manchester 061 832 9011
        • Shipley 0274 531 666
        • Bradford 0274 308 308
        • Coventry 0203 256 444
        • Hove 0273 724 500
        • Leicester 0533 551 515
        • Slough 0753 868 161
        • London, Hounslow 081 570 2255
        • London, Bethnal Green 071 739 6084
        • London, Great Portland Street 071 486 7191
        • London, Streatham Hill 081 680 9988
        • Newcastle 091 232 5792
        • Birmingham 021 631 4400
        • Bristol 0272 298 111
        • Derby 0332 295 200
        • Leeds 0632 442 500
        • Isle of Man 0624 623 051
        • London, Fenchurch Street 071 623 3088
        • London, Ealing 081 567 6705
        • London, Regent Street 071 287 2000
        • London. Southall 081 571 0041
    6. (f) Barclays Bank
      • Barclays has decided not to designate specific branches but rather to invite BCCI customers to contact any of their branches. The branches have received instructions on how best to help these customers and an internal helpline is in operation to deal with any difficulties.
    7. (g)Royal Bank of Scotland: 071 615 2348–9
      • Branch contacts
        • Glasgow 041 248 2777
        • Leeds 0532 451 815
        • Manchester 061 236 8585
        • Isle of Man 0624 629 111
        • Birmingham 021 212 1166
        • London, Cavendish Square 071 499 3601
        • London. City 071 623 4356
    8. 2. Touche Ross
      • Touche Ross, the provisional liquidator, has set up a helpline.
      • The number is 071 480 7766.
    9. 3. Government Services
    10. (a) The Loan Guarantee Scheme helps small firms which are unable to offer security, or lack the track record normally required by banks or other financial institutions involved in the Scheme. The Government offers a guarantee of 70 per cent. (85 per cent. in the Inner City Task Force Areas) on loans up to £100,000. Details can be obtained from most branches or from:
      11. 163
      • Department of Employment
      • Small Firms Policy Branch
      • Loan Guarantee Unit
      • St. Mary's House
      • c/o Moorfoot
      • Sheffield
      • S1 4PQ
      • Telephone 0742 597382
    11. (b) The Department of Trade and Industry (DTI) can help with arranging consultancy services for small businesses. Details of this may be obtained from DTI local contact points:
      • DTI North East 091 235 7292
      • DTI North West (Manchester) 061 838 5000
      • DTI North West (Liverpool) 051 224 6300
      • DTI Yorkshire and Humberside 0532 338300
      • DTI East Midlands 0602 596460
      • DTI West Midlands 021 212 5000
      • DTI East 0223 461939
      • DTI South East (London) 071 627 7800
      • DTI South East (Reading) 0734 395600
      • DTI South East (Reigate) 0737 226900
      • DTI South West 0272 308400
      • Scotland 031 313 6200
      • Wales 0443 841200

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