F96[ 21.—(1) In this section—

“banking activity” means—

(a) carrying on banking business, or

(b) making payments other than those that are specifically connected with carrying on banking business, or

(c) acquiring or disposing of assets or liabilities;

“prescribed circumstance”, in relation to the holder of a licence F97[or authorisation under section 9A], means any of the following:

(a) the holder has become or is likely to become unable to meet its obligations to its creditors;

(b) the holder is not maintaining or is unlikely to be in a position to maintain adequate capital resources having regard to the volume and nature of the holder's business;

(c) the holder is failing or has failed to comply with a condition imposed in relation to the licence F97[or authorisation under section 9A] in accordance with section 10 and the circumstances are such that the Bank considers that the stability and soundness of the holder are or will be affected by the failure;

(d) the holder is conducting business in such a manner as to jeopardise and prejudice the security of deposits taken by it or the rights and interests of persons who made those deposits;

(e) the holder and one or more than one other entities are under common control (whether or not any such other entity holds a licence F97[or authorisation under section 9A]) and the Bank is of the opinion that the common control is not in the interest of persons who keep deposits with the holder;

“specified”, in relation to a direction given under this section, means specified in the direction.

(2) On becoming satisfied that it would be in the public interest to do so, or that a prescribed circumstance exists in relation to the holder of a licence F97[or authorisation under section 9A], the Bank may, by direction given in writing, require the holder to suspend, for a specified period not exceeding 6 months, any specified banking activity except as authorised by the Bank.

(3) A direction given under subsection (2) ceases to have effect—

(a) at the end of the period specified in the direction, or

(c) on the making of a winding-up order in respect of the holder of the licence F97[or authorisation under section 9A] concerned,

whichever first occurs.

(4) While a direction under subsection (2) has effect—

(a) winding-up or bankruptcy proceedings may be commenced in relation to the holder of the licence F97[or authorisation under section 9A] concerned, and

(b) a receiver over the property of that holder may be appointed, and

(c) the property of that holder may be attached, sequestered or otherwise distrained,

only with the prior approval of the Court.

(5) If the Bank is satisfied that, despite the fact that the holder of the licence F97[or authorisation under section 9A] concerned appears to it to be able to meet the obligations that the holder owes to its creditors, the circumstances that gave rise to the direction are unlikely to be rectified, it may, by further direction, require the holder—

(a) to prepare, in consultation with the Bank, a scheme for the orderly termination of his banking business and the discharge of the holder's liabilities to persons who have deposits maintained with the holder under the supervision of the Bank, and

(b) to submit the scheme to the Bank for its approval within 2 months after the giving of the further direction.

(6) The Bank may approve or refuse to approve a scheme submitted to it under subsection (5). In approving such a scheme, the Bank may impose such conditions as it considers appropriate.

(7) If the holder of the licence F97[or authorisation under section 9A] to whom a direction has been given under this section—

(a) fails to comply with the direction, or

(b) fails to comply with the terms of a scheme approved by the Bank under subsection (6),

the Court may, on the application of the Bank, make such order as the Court considers appropriate, including an order of committal or a winding-up order on the ground that it is just and equitable that the holder should be wound up.

(8) If a winding-up order is made in proceedings brought under this section against the holder of a licence F97[or authorisation under section 9A] to whom a direction has been given under this section, the Companies Acts apply to the holder in the same way as if the order had been made on a winding-up petition under those Acts and as if for any reference in that law to the presentation of the winding-up petition there were substituted a reference to the making of the winding-up order under this section.

(9) The Bank may, by notice in writing given to the holder of the licence F97[or authorisation under section 9A] concerned, vary or revoke a direction given under this section. However, the Bank may not vary a direction given under subsection (2) by extending the operation of the direction for a period exceeding 12 months from the date on which the direction first took effect.

(10) A direction given by the Bank under this section, and any variation of the direction under subsection (9), are appealable decisions for the purposes of Part VIIA of the Central Bank Act 1942.

(11) For the purpose of paragraph (e) of the definition of “prescribed circumstance” in subsection (1), the holder of a licence F97[or authorisation under section 9A] and one or more than one other entities are taken to be under common control if the decision as to how or by whom each are managed can be made by the same person or by the same group of persons acting in concert.]