Paragraph 2

In Part II of the Schedule (interpretation), after paragraph 6A (meaning of mortgage business certification condition for appropriate mortgage companies) there shall be inserted the following paragraphs—

“Meaning of the specified purposes in relation to Girobank plc

6B

In this Schedule “the specified purposes in relation to Girobank plc” means any of or all the following purposes—

(1)

Facilitating the provision of banking services by the society, by Girobank plc or any other associated body of the society including in the case of Girobank plc the lending of money to the public on the security of land by loans corresponding to advances secured on land and the acceptance of deposits of money in the course of deposit-taking business.

(2)

Enabling Girobank plc to perform its obligations and to discharge its functions under any agreement entered into between the Secretary of State, the Post Office and Girobank plc in relation to the Universal Postal Union established on 10th July 1964 or any agreement or instrument made by and pursuant to that Union.

(3)

Enabling Girobank plc to acquire and hold liquid assets in accordance with the Building Societies (Liquid Asset) Regulations 1987^f1 but with the word “deposit” in those regulations having the meaning in section 5 of the Banking Act 1987 which it would have for the purposes of that Act were not section 5(3)(a) and (c) (which excludes sums paid by banks and lending businesses) included therein.

Meaning of the condition for investment in Girobank plc

6C

(1)

In this Schedule “the condition for investment in Girobank plc” means a condition to the effect that a society shall not acquire shares in Girobank plc where the society is aware, and shall dispose of such shares in Girobank plc as it holds as soon as it is conveniently practicable to do so without undue loss where the society becomes aware, that Girobank plc:

(a)

has a subordinate organisation which is not within the prescribed range,

(b)

is a market maker, or

(c)

is conducting business which includes activities in the range from which the society is restricted.

(2)

For the purposes of subparagraph (1) above, a subordinate organisation comes within the prescribed range where it is—

(a)

a body corporate individually specified in column 1 of Part I of this Schedule,

(b)

a body corporate of a description specified in column 1 of Part I of this Schedule which is a one tier organisation, or

(c)

The Office of the Banking Ombudsman.”