Finance Act 1981

2 (1) Where a person resident in the United Kingdom borrows any money from a person resident outside the scheduled territories or any money, being foreign currency, from a person resident in the scheduled territories the Treasury may, subject to the provisions of this paragraph, give him directions requiring him—

(a) to deposit with the Bank of England, within such time and in such manner as may be specified in the directions, a sum in sterling of such amount as may be 10 specified; and

(b) either so to deposit it free of interest or to pay to the Bank in respect of it a charge or charges at such rate as may be so specified.

(2) The amount of the sum which directions under this paragraph require a person to deposit in respect of any money borrowed by him shall not exceed the prescribed amount (which may be equal to the amount of the money borrowed or to a proportion of it) and the rate of any charge which the directions require to be paid shall not exceed the prescribed rate.

(3) Any sum which directions under this paragraph require to be deposited may at any time with the consent of the Treasury be repaid (in whole or in part) by the Bank of England; and any such sum shall, if not previously repaid, be repaid by the Bank of England—

(a) at the expiration of such period beginning with the date of the deposit as may be specified in the directions; or

(b) if no period is so specified, when the Bank is satisfied that the borrowed money has been repaid ;

and where no period is so specified and the Bank is satisfied that a proportion of the borrowed money has been repaid, a corresponding proportion of the sum deposited, so far as not already repaid, shall be repaid by the Bank.

(4) The period which directions specify for the purposes of sub-paragraph (3)(a) above shall not exceed such maximum, if any, as may be prescribed.

(5) Where directions given under this paragraph to any person are revoked any sum then held by the Bank of England pursuant to the directions shall be repaid to him.

(6) Any charge required to be paid by directions under this paragraph may, if not previously paid, be deducted by the Bank of England in making a repayment to the person liable for the charge.

(7) For the purposes of sub-paragraph (2) above the sterling equivalent of any amount of currency other than sterling shall be determined by reference to the London market spot selling rate for sterling on the last working day before the borrowed money is received or, if there is no such rate, by reference to such rate as may be specified by the Bank of England.