¹⁰⁰ The reasons for such control are to be found in the peculiar relationship that subsisted between the Government and the Presidency banks. Prior to 1862, as a safeguard against their insolvency, the Presidency Bank charters restricted the kind of business in which they were to engage themselves. Put very briefly, the principal restrictions imposed prohibited the banks from conducting foreign-exchange business, from borrowing or receiving deposits payable out of India, and from lending for a longer period than six months, or upon mortgage, or on the security of immovable property, or upon promissory notes bearing less than two independent names, or upon goods unless the goods or title to them were deposited with the banks as security. The Government held shares in the banks and appointed a part of the Directorate. In 1862, when the right of note issue was withdrawn, these statutory limitations on the business of the banks were greatly relaxed, though the Government power of control remained unchanged. But, the banks having in some cases abused their liberty, nearly all the old restrictions of the earlier period were reimposed in 1876 by the Presidency Banks Act, Government, however, abandoning direct interference in the management, ceasing to appoint official directors, and disposing of its shares in the banks. Some of these limitations have been incorporated in Act XLVII of 1920, which amalgamated the three Presidency banks into the Imperial Bank of India. Banks other than Presidency banks have been entirely immune from any legislative control whatsoever, except in so far as they are made amenable to the provisions of the Indian Companies Act. Cf. in this connection Minutes by Sir Henry Maine, No. 47, and the accompanying note by W. Stokes. The control of these banks is one of the important problems of banking legislation in India. ¹⁰¹ It should, however, be noted that in 1860 the circulation Of notes of the three Presidency banks was larger than their current accounts, as is evident from the following:— ─────────────────────────────────────────────────── _Name of the Bank_ _Accounts _Notes in in Current._ Circulation._ Bank of Bengal £1,254,875 £1,283,946 Bank of Bombay £438,459 £765,234 Bank of Madras £161,959 £192,291 (_Bankers’ Magazine_, April, 1893, p 547.) ─────────────────────────────────────────────────── ¹⁰² For a summary of the controversy _re_ Bank issue _v._ Government issue, see _Report of the Bombay Chamber of Commerce for_ 1859–60, Appendix L, pp. 284–318.