No.

[ ] of [ ] BANKING ACT

[TERRITORY]

AN ACT TO PROVIDE FOR REGULATING

BANKING BUSINESS

IN THE ECCB TERRITORIES

EASTERN CARIBBEAN CENTRAL BANK

BASSETERRE

ST KITTS

NB: THIS COPY IS NOT AN OFFICIAL COPY OF THE LAW. IT IS FOR THE PURPOSES OF THE ECCB ONLY. OFFICIAL COPIES
ARE AVAILABLE IN THE RESPECTIVE TERRITORIES.
 BANKING ACT 19[ ]

No. [ ] of 19[ ]

ARRANGEMENT OF SECTIONS

Section

1. Short Title and Commencement.

2. Interpretation.

PART I

LICENCES

3. Requirement of licence.
4. Licences - formalities and considerations.
5. Restriction on use of words "bank", "financial institution" or their derivatives.
6. Restrictions on names likely to mislead.
7. Authorisation of location and approval of new business premises.
8. Voting.
9. Actions of fundamental change requiring approval.
10. Revocation of licence and declaration of discontinuance of service.
11. Rights of Central Bank to examine books of banking business without valid licence.
12. Licence fees and penalty for default.

PART II

FINANCIAL REQUIREMENT AND LIMITATIONS

13. Minimum paid-up or assigned capital.

14. Maintenance of Reserve Fund.
15. Adequacy of Capital.
16. Restriction on certain activities of licensed financial institutions.
17. Maintenance of specified assets.
18. Credit Institution.

PART III

AUDIT, INFORMATION AND INSPECTION

19. Annual audit, report and publication of financial statements and results.
20. Central Bank examination.
21. Disclosure and access to books and records by Central Bank examiner for
inspection.
22. Central Bank's powers and measures for preventing adverse consequences.
23. Production of information as required by the Central Bank.
24. Restriction on advertising likely to mislead the public.
25. Extension of period for providing information.

PART IV

MISCELLANEOUS

26. Removal and disqualification of director.

27. Declaration and registration of related interest and conflict of interests by Director.
28. Responsibility for deceiving statements and obstruction of audit or authorised
examination.
29. Management's duty of compliance with the requirements of the laws.
30. Liability of directors, managers, officers and partners.
31. Secrecy of information.
32. Working days of financial institutions.
33. Regulations.
33A. Compounding of offences.

PART V

RECEIVERSHIP, LIQUIDATION AND REORGANISATION

34. Voluntary liquidation.

35. Cessation of business operations.
36. Notice to depositors of voluntary liquidation.
37. Rights of depositors and creditors in voluntary liquidation.
38. Distribution of assets.
39. Insufficiency of assets in discharge of obligations in voluntary liquidation.
40. Appointment of receiver.
41. Notice of appointment of receiver.
42. Financial institution may institute proceedings to have receiver's appointment
lifted.
43. Period of obligation to commence compulsory liquidation or reorganisation
proceedings.
44. Compulsory liquidation, reorganisation proceedings.
45. Powers of the High Court.
46. Powers of receiver, official liquidator.
47. Term extensions and attachment and transfer of assets to be void.
48. Execution against assets of a financial institution.
49. Reorganisation proceedings.
50. Reorganisation provisions.
51. Petition for modification or revision of reorganisation.
52. Preferential and other claims.
53. Unclaimed funds.
54. Shareholders' rights on remaining assets.
55. Safe deposits and unclaimed property.
56. Receiver's audited accounts, striking the name of the institution and conclusion of
liquidation.

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 PART VI

ABANDONED PROPERTY

57. Abandoned property.

58. Report, publication and disposal of abandoned property.
59. Sale and handling of proceeds of abandoned property.
60. Claims on abandoned property.
61. Penalties.

PART VII

TRANSFER OF BANKING BUSINESS

62. Banking Business Vesting Order.

63. Supplementary provision as to transfers.
64. Transfers to be subject to stamp duty.

PART VIII

GENERAL

65. Non-application of Aliens (Landholding Regulation) Act 1973 (No of 19 ).

66. Repeal and Saving.

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 AN ACT to provide for regulating banking business.

[ ]
BE IT ENACTED etc.

PRELIMINARY

Short title and 1. This Act may be cited as the Banking Act 19[ ] and shall
Commencement. come into operation on such date as the (Minister) may, by Order
published in the Gazette, appoint.

Interpretation. 2. In this Act -

"Agreement" means the Agreement establishing the Eastern Caribbean

Central Bank made on the 5th day of July, 1983, the text of which
is set out in the Schedule to the Eastern Caribbean Central Bank
No. 23 of 1983 Agreement Act 1983;

"auditor" means

(a) a person who is a member of a professional body of

accountants which the Minister has specified by Order
published in the Gazette; or

(b) any other person approved by the Minister, acting on the

recommendation of the Central Bank;

"bank" means any financial institution whose operations include the

acceptance of deposits subject to the transfer by the depositor by
cheque;

"banking business" means

the business of receiving funds through -

(i) the acceptance of monetary deposits which are

repayable on demand or after notice or any similar
operation;

(ii) the sale or placement of bonds, certificates, notes

or other securities and the use of such funds, either
in whole or in part, for loans or investment for the
risk of the customer; and

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 includes -

any other activity recognised by the Central Bank as

banking practice and which a financial institution may
additionally be authorised to do;

"board" means the board of directors or other body responsible for the
management of a financial institution;

"Central Bank" means the Eastern Caribbean Central Bank established

under Article 3 of the Agreement;

"Council" means the Monetary Council established under Article 7 of the

Agreement;

"credit institution" means any financial institution other than a bank

whose business is that of money lending;

"director" includes any person occupying the position of director of a

company by whatever name called and includes a person in
accordance with whose directions or instructions the directors of a
company are accustomed to act;

"financial institution" includes any person doing banking business and all
offices and branches of a financial institution in ( ) shall be
deemed to be one financial institution;

"foreign financial institution" means a financial institution formed under

the laws of a country other than ( ) which carries on banking
business in ( );

"licensed financial institution" means a financial institution licensed under

the provisions of this Act;

"local financial institution" means a financial institution formed under the

laws of ( );

"Minister" means the Minister responsible for Finance;

"Participating Governments" has the meaning assigned to it in the

Agreement;

"person" includes a public body, company, partnership, trust, association

or body of persons whether corporate or unincorporate;

"place of business" means any office including a mobile office of a

financial institution, in ( );

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 "principal place of business" means, in relation to -

(a) a local financial institution its principal office in ( ),

and

(b) a foreign financial institution the office designated in its

licence;

"unsecured" in relation to advances or credit facilities, means advances or

credit facilities granted without security, or in the case of advances
and credit facilities against security, any part of such advances and
credit facilities which at any given time exceeds the market value
of the assets comprising the security given, or which exceeds the
valuation approved by the Central Bank whenever it deems that no
market value exists for those assets.

PART I

LICENCES

Requirement of 3. (1) A person shall not carry on banking business in (

Licence. ) without a licence granted by the Minister.

(2) A bank which, at the commencement of this Act,

holds a valid licence to carry on banking business in ( ) shall be
deemed to have been granted a licence under section 4.

(3) Notwithstanding the provisions of subsection (2),

the Minister shall, within such period of the commencement of this Act,
as the Minister, after consultation with the Central Bank, may determine,
issue to a bank a new licence certificate under this Act.

(4) Notwithstanding the provisions of subsection (1) the

Minister, on the recommendation of the Central Bank shall grant a
provisional licence, with effect from the commencement of this Act, to a
person, other than a bank, who is carrying on banking business in (
).

(5) A person, who has been granted a provisional

licence under this section, shall, within one hundred and twenty days
from the date of the grant of the provisional licence, apply for a licence
under the provisions of section 4.

(6) If a person fails to apply for a licence within the

period specified in subsection (5) the provisional licence granted to that
person shall be deemed to have been revoked.

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 (7) Any person intending to carry on banking business
in ( ) shall, before commencing such business, apply for a licence
under the provisions of section 4.

(8) Any person who contravenes the provisions of this

section commits an offence and is liable on summary conviction to a fine
not exceeding one hundred thousand dollars or to imprisonment for a term
not exceeding five years or to both such fine and imprisonment; and in
the case of a continuing offence to a further penalty of one thousand
dollars for each day on which the offence is continued after conviction
thereof.

Licences - 4. (1) In order to obtain a licence as a financial institution,

Formalities and a person shall apply in writing to the Minister and submit the documents
considerations. and other information as specified in Schedule I.

(2) In considering an application for a licence the

Minister shall request the Central Bank to conduct such investigation as it
may deem necessary to ascertain

(a) the validity of the documents submitted in

accordance with Schedule I,

(b) the financial condition and history of the

applicant,

(c) the character of the business of the

applicant,

(d) the experience of the person or persons

who are to constitute its management,

(e) the adequacy of its capital structure,

(f) the earning prospects of the applicant, and

(g) the convenience and needs of the

community to be served by the granting of
the licence.

(3) Within a reasonable time of its receipt of the

application for a licence the Central Bank shall make its recommendations
to the Minister.

(4) Within 30 days of the receipt of the

recommendations of the Central Bank the Minister shall either grant the
licence or, if the Minister is of the opinion that it would be undesirable in

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 the public interest to grant the licence, he may refuse to grant the same
and need not give any reason for so refusing but shall inform the applicant
that he has refused to grant the licence.

(5) A financial institution shall not be granted a licence

under this section unless it fulfills the capital requirements specified in
section 13.

(6) The Minister, after consultation with the Central

Bank, may by order published in the Gazette amend Schedule 1.

Restriction on use 5. (1) No person other than a licensed financial institution

of words “bank”, shall, except with the written consent of the Minister after consultation
“financial with the Central Bank -
institution” or
their derivatives. (a) use the words "bank", financial
institution", "savings" and "loan", or any
of their derivatives or any mutations thereof
in any language, or any other word
indicating the carrying on of banking
business, in the name, description or title
under which such person is carrying on
business in ( ); or make any
representation to such effect in any other
manner whatsoever for the purpose of
indicating that such person is carrying on
banking business in ( );

(b) make or continue to make representations

in any billhead, letter, letterhead, circular,
paper, notice, advertisement or in any other
manner whatsoever that such person is
carrying on banking business;

(c) in any manner whatsoever solicit or receive

deposits from the public, or any employee
of that person.

(2) Any person who contravenes the provisions of this

section commits an offence and is liable on summary conviction to a fine
not exceeding one hundred thousand dollars or to imprisonment for a term
not exceeding five years or to both such fine and imprisonment; and in
the case of a continuing offence to a further penalty of one thousand
dollars for each day on which the offence is continued after conviction
thereof.

Restrictions of 6. (1) No financial institution shall be granted or continue

names likely to to hold a licence under a name which so closely resembles the name of an

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mislead. existing financial institution in the territories of the Participating
Governments or elsewhere as would be likely, in the opinion of the
Minister, after consultation with the Central Bank, to mislead the public.
(2) A copy of the certificate of any licence granted
under this Act shall be displayed and kept displayed in a conspicuous
place in the public part of any place of business of the licensed financial
institution.

Authorisation of 7. (1) Any licence granted under this Act shall authorise
location and the licensed financial institution to carry on banking business in ( )
approval of new at the place of business designated in the licence and at such other place
business premises. as the Minister may after consultation with the Central Bank in writing
authorise.

(2) No financial institution shall open a new place of

business or change the location of an existing place of business in ( )
without the prior approval of the Minister after consultation with the
Central Bank and no financial institution shall close an existing place of
business in ( ) without having given (ninety) days prior notification
to the Minister and the Central Bank.

(3) No local financial institution shall open a place of

business elsewhere than in ( ) without the prior approval of the
Minister after consultation with the Central Bank.

(4) No local financial institution shall close a place of

business outside of ( ) without having given twenty-one days prior
notification to the Minister and the Central Bank.

Voting. 8. (1) Subject to subsection (6), except with the approval

of the Minister acting on the recommendation of the Central Bank, no
person shall hold or acquire either directly or indirectly -

(a) such of the paid-up capital of a local

financial institution which would confer
upon such person more than 20 per cent of
the total voting rights of all the members at
a general meeting of the local financial
institution, or

(b) in the case of a local financial institution

not having a share capital, more than 20
per cent of the total voting rights of all the
members entitled to vote at a general
meeting of the local financial institution.

(2) Where the Central Bank determines that the

interests of a group of two or more members of a local financial

9
 institution are so interrelated that they should be considered as a single
unit, the total holdings of that group shall be combined and deemed to be
the holdings of a single member.

(3) In the event that the Minister, acting upon the

recommendation of the Central Bank, determines that the provisions of
subsection (1) have been violated, he may issue an order requiring
divestment of so much of the offending interest as is necessary to secure
compliance with the provisions of subsection (1).

(4) A director of a local financial institution who knows

or ought reasonably to know of a transfer made in violation of subsection
(1) and who fails to disclose it to the Minister and to the Central Bank
commits an offence and is liable on summary conviction to a fine not
exceeding two thousand dollars or to imprisonment for a term not
exceeding three months.

(5) Any person who knowingly acquires an interest in

violation of subsection (1) commits an offence and is liable on summary
conviction to a fine not exceeding five thousand dollars or to
imprisonment for a term not exceeding six months.

(6) Subsection (1) shall not apply to the Government or

to any person who at the commencement of this Act has acquired more
than 20 per cent of the total voting rights of all the members of the local
financial institution, but no such person shall without the consent of the
Minister acting on the recommendation of the Central Bank, acquire any
additional shares which shall have the effect of increasing his percentage
of the voting rights.

Actions of 9. (1) Unless the approval of the Minister acting upon the
fundamental recommendation of the Central Bank, is first obtained no financial
change requiring institution shall -
approval.
(a) transfer the whole or any substantial part of
its assets or liabilities in ( ) other than
in the ordinary course of its business;

(b) effect a reduction of its paid up or, as the

case may be, assigned capital established
under section 13;

(c) alter its name as set out in its licence;

(d) enter into a merger or consolidation within

( ), and

(e) in the case of a local financial institution,

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 amend the instrument or charter under
which it is formed in ( ).

(2) Every foreign financial institution shall notify the

Minister and the Central Bank of any amendment to the instrument or
charter under which it is formed, within 60 days of such amendment.

(3) In recommending any proposed action under

subsection (1), the Central Bank shall be guided by the criteria specified
in section 4 (2).

Revocation of 10. (1) The Minister, acting upon the recommendation of

licence and the Central Bank, may revoke any licence to carry on banking business in
declaration of ( ) if the licensee:
discontinuance of
service. (a) fails to commence operations within a
period of 12 months following the granting
of the licence; or

(b) fails to comply with the conditions of its

licence or the measures required by the
Central Bank in accordance with
section 22; or

(c) is in breach of any of the provisions of this

Act which is applicable thereto; or

(d) ceases to carry on banking business in (

); or

(e) is conducting its affairs in a manner

detrimental to the national interest or to the
interest of its depositors.

(2) Before revoking any licence under subsection (1),

the Minister shall give the financial institution concerned notice in writing
of his intention to do so, specifying therein the grounds upon which he
proposes to make the revocation and shall require the financial institution
to submit to him within a specified period being not less than 30 days, a
statement of objections to the making of the revocation and thereafter, the
Minister shall advise the financial institution of his decision.

(3) Notice under subsection (2) shall be served at the

last known address of the financial institution or shall be published in the
Gazette or in any local newspaper.

(4) If any financial institution is aggrieved by any

decision made under subsection (1), that financial institution may appeal

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 to the High Court within fourteen days of such decision, setting forth the
grounds of such appeal, and the High Court may revoke or confirm the
said decision.

(5) Where a licence to carry on banking business in (

) has been revoked, the Minister shall, as soon as possible
thereafter cause a notice of the revocation to be published in the Gazette
and a newspaper circulating in ( ) and cause such other steps to be
taken as are deemed by him to be necessary to inform the public of such
revocation.

Rights of Central 11. (1) Whenever the Central Bank, has reason to believe
Bank to examine that any person is carrying on banking business without a valid licence, it
books of banking may, after consultation with the Minister, apply to the High Court for an
business without order to examine the books, accounts and records of such person in order
valid licence. to ascertain whether such person is carrying on banking business without
a valid licence.

(2) A person refusing to make available for examination

any books, accounts and records having been requested to do so by the
Central Bank commits an offence and is liable on summary conviction to
a fine not exceeding five thousand dollars or imprisonment for a term not
exceeding six months or to both such fine and imprisonment.

(3) A person holding funds which he has obtained by

doing banking business without being in possession of a licence granted
under this Act shall repay such funds in accordance with the directions of
the Central Bank.

(4) The Minister may request the Central Bank to

undertake the actions under subsection (1).

Licence fees and 12. (1) Every financial institution shall pay such annual
penalty for licence fee as the Minister, may by Order published in the Gazette,
default. prescribe.

(2) The Minister, after consultation with the Central

Bank, may prescribe different licence fees in respect of different classes
or categories of financial institution and such fees shall apply uniformly to
such classes or categories.

(3) All licence fees paid under this Act shall be payable
to the Government and form part of the Consolidated Fund.

(4) A person who fails to comply with any requirement

of this section and where such person is a company, the company and
every director, manager, secretary or other officer of the company who

12
 knowingly authorises or permits the default commits an offence and is
liable upon summary conviction to a fine not exceeding five thousand
dollars and in the case of a continuing offence to a further penalty of fifty
dollars for each day on which the offence is continued after conviction
thereof.

PART II

FINANCIAL REQUIREMENT AND LIMITATIONS

Minimum paid-up 13. (1) Every licensed financial institution shall maintain in
or assigned ( ) unimpaired, paid-up or, as the case may be, assigned capital at
capital. least equal to the minimum amounts specified in accordance with the
following requirements:

(a) if operating as a bank, the minimum

required capital shall be not less than five
million dollars but where a financial
institution is at the commencement of this
Act operating as a bank under a valid
licence such financial institution shall be
required to maintain capital and reserves as
provided in section 15.

(b) if operating as a credit or other financial

institution, the minimum required capital
shall be not less than such an amount as the
Minister, after consultation with the Central
Bank, may by Order prescribe.

(2) The minimum amounts specified in sub- section (1)

may be increased or varied by the Minister, after consultation with the
Central Bank, by Order in respect of all or any appropriate class of
institution.

(3) In this Act -

"assigned capital" means the net assets derived from the funds of a
foreign financial institution that such an institution is required to
keep during the term of its licence in ( ) in accordance with
the Regulations that the Minister after consultation with the
Central Bank may prescribe.

Maintenance of 14. (1) Subject to this section every licensed financial

Reserve Fund. institution shall maintain a reserve fund and shall, out of its net profits of
each year transfer to that fund a sum equal to not less than twenty per cent
of such profits whenever the amount of the reserve fund is less than a

13
 hundred per cent of the paid-up or, or as the case may be, assigned capital
of the financial institution.

(2) No financial institution shall declare, credit or pay

any dividend or make any other transfer from profits whenever such
declaration, credit, payment or transfer would result in an impairment of
the capital required under section 13.

(3) Notwithstanding the provisions of subsection (1), a

foreign financial institution may apply to the Minister to be exempted
from the requirements of this section.

Adequacy of 15. (1) Every financial institution shall maintain paid-up, or

Capital. as the case may be, assigned capital and reserves at not less than 5 per
centum of its liabilities.

(2) The percentage specified in sub-section (1) may be

varied by the Minister, after consultation with the Central Bank, by Order
in respect of all or any appropriate class of financial institution.

(3) Where the paid-up or as the case may be, assigned

capital and reserves of a financial institution are deficient in terms of
subsection (1) or (2), the Minister, after consultation with the Central
Bank, may from time to time grant to the financial institution in writing
such period of time as he considers reasonable to enable the financial
institution to make good the deficiency.

(4) In this section -

"liabilities" means deposits and such other liabilities as may from time to
time be specified by the Central Bank by notice published in the
Gazette.

Restriction on 16. (1) A financial institution shall not directly or

certain activities indirectly, except with the approval of and subject to such terms and
of licensed conditions as the Minister, after consultation with the Central Bank, may
financial by Order prescribe –
institutions.
(a) grant to any person, or to any group of
companies or of persons which group is
under the control or influence of one and
the same person or body of persons, any
advances or credit facilities or make any
guarantee so that the total value of the
advances credit facilities or guarantee in
respect of such person or group of
companies or persons, is at any time more
than fifteen per cent of the aggregate

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 amount of the financial institution's
unimpaired capital and reserves; but the
limitation upon the foregoing transactions
shall not apply in respect thereof if such
transactions:

(i) are upon, or with respect to, drafts

or bills of exchange drawn in good
faith against existing assets, or upon
bank's acceptance, or bills of
exchange of the kinds and
maturities authorised by Regulations
made by the Minister after
consultation with the Central Bank
or upon commercial or business
paper actually owned by the person
discounting or selling the same with
or to such financial institution and
endorsed without limitation or
guaranteed by such person; or

(ii) are secured by collateral, fully

covered by insurance, having an
ascertainable market value, or
otherwise having such a value as
collateral as found in good faith by
an officer of such financial
institution, of at least twenty per
cent more than the amount of
obligations secured thereby; or

(iii) represent loans to or guaranteed by

the Government or its boards or
agencies, or local government
bodies;

(b) grant any advance against the security of its

own shares;

(c) grant or permit to be outstanding unsecured

advances unless such have been approved
by its board and the Central Bank has been
notified thereof in advance -

(i) to the members of its board whether

such advances are obtained by them
jointly or severally;

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 (ii) to any person in which it or any one
or more of its directors have any
interest as a director, partner,
manager, agent, member or
otherwise;

(iii) to any person who owns, controls

or has the power to vote more than
ten per cent of any class of voting
securities of the financial
institution;

(iv) to any person serving as an auditor

under section 19 or as an examiner
under section 20;

(v) to any person, whose relationship to

another financial institution in
which a correspondent account is
maintained, is within any of the
categories described in sub-
paragraphs (i) to (iv);

(d) grant or permit to be outstanding to its

officers and employees unsecured advances
which in aggregate amount for any one
officer or employee exceeds the annual
remuneration of such officer or employee;

(e) engage in trade, except insofar as may be

temporarily necessary in the conduct of its
business or in the course of the satisfaction
of debts due to it;

(f) acquire or continue in the acquisition of any

ownership interest in any financial,
commercial, agricultural, industrial or other
undertaking except such interest as a
financial institution may acquire for the
satisfaction of debts due to it which shall,
however, be disposed of as soon as possible
thereafter, but this paragraph shall not
prevent the purchase and sale of shares or
stocks for trust account or upon the order
and for the account of a customer without
recourse; but a financial institution may:

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 (i) hold shares in any company set up
for the purpose of promoting the
development of a money market or
securities market or of improving
the financial mechanism for the
financing of economic development
in ( );

(ii) hold shares in another company the

aggregate value of which does not
at any time exceed ten per cent of
the sum of the unimpaired capital
and reserves of that financial
institution, and where there is no
established market value for such
shares the value of such shares shall
be established on the basis of a
valuation approved by the Central
Bank;

(g) purchase, acquire or lease real or

immovable property except as may be
necessary for the purpose of conducting its
business as a financial institution including
provision for future expansion and housing
its officers and employees; provided that:

(i) in respect of any real or immovable

property held or leased by it prior
to the commencement of this Act
for purposes other than those
referred to herein, it shall be
allowed a period of three years in
which to comply with this
paragraph; and

(ii) it may secure a debt on any

property immovable or movable and
in default of repayment may acquire
such property for resale as soon as
possible thereafter.

(2) The total of all unsecured advances made to any

person within any of the categories described in subparagraphs (i) to (v)
of paragraph (c) of subsection (1) shall not exceed fifteen per cent of the
sum of the paid-up or, as the case may be, assigned capital and reserves

17
 of the financial institution.

(3) Any advances, extensions or guarantees of credit to

any person made under paragraph (a) or within any of the categories
described in subparagraphs (i) to (v) of paragraph (c) of subsection (1)
shall be made on substantially the same terms, including interest rates and
collateral, as applicable, as those prevailing for comparable transactions
with other persons.

(4) In applying paragraphs (a) and (c) of subsection (1),

if the Central Bank shall determine that the interests of a group of two or
more persons are so interrelated that they should be considered as a single
unit, the total indebtedness of that group shall be combined and deemed to
be the indebtedness of a single person; and a financial institution shall not
be deemed to have violated paragraphs (a) or (c) of subsection (1) solely
by reason of the fact that the combined indebtedness exceeds the
limitation at the time of the determination, but the financial institution
shall dispose of the indebtedness of the group in the amount in excess of
the limitation within such reasonable time as shall be determined by the
Central Bank.

(5) Any financial institution to which subsection (1) is

applicable that, prior to the commencement of this Act, entered into any
transactions incompatible with paragraphs (a), (b), (c), (d), (e) or (f) of
subsection (1) shall, within twelve months after the commencement of this
Act, or within such further period as the Minister, after consultation with
the Central Bank may determine, submit a statement thereof to the Central
Bank and shall in respect of such transactions, take such action, and
within such reasonable time, as shall be determined by the Central Bank.

Maintenance of 17. (1) Every licensed financial institution of may be

specified assets. required to maintain specified assets of an amount not less than that from
time to time prescribed by the Minister acting on the advice of the
Council by Order published in the Gazette.

(2) The amount of specified assets so prescribed shall

be expressed as a percentage of the aggregate demand, savings, and time
deposits and other liabilities of the licensed financial institution to which
the Order relates, and such percentage shall not be more than forty per
cent unless the Council so approves.

(3) The Minister after consultation with the Central

Bank may approve a period during which surpluses and deficiencies in
specified assets may be averaged.

(4) The Minister after consultation with the Central

Bank may by Order provide that advances granted to a licensed financial

18
institution by any other financial institution or by an overseas branch or
office thereof may be excluded from the computation of the demand,
savings and time deposits and other liabilities of the licensed financial
institution.

(5) The Central Bank may determine the distribution of

amounts required to be held between different classes of specified assets,
and may also differentiate between classes of banks, credit institutions and
other financial institutions.

(6) Every financial institution which is required to hold

specified assets shall be afforded a reasonable time to comply with the
Order.
(7) In this section "specified assets" consists of freely
transferable assets free from any charge, lien or encumbrance whatsoever
and includes -
(a) notes and coins which are legal tender in (
) and such foreign notes and coins as
the Central Bank may specify;

(b) balances at the Central Bank;

(c) net balances at financial institutions in (

) but where such balances are negative
they will be subtracted from the specified
assets;

(d) treasury bills and other securities issued or

guaranteed by a Participating Government
and securities issued by a statutory
corporation wholly owned by a
Participating Government and approved by
the Central Bank;

(e) bills of exchange and promissory notes

eligible for rediscount by the Central Bank
and warehouse warrants or their equivalent
securing possession of goods against which
the Central Bank may grant advances,
within the limits and in accordance with the
evaluation fixed by the Central Bank;

(f) net balances at financial institutions in such

monetary areas as the Central Bank may
approve and the Central Bank may provide
for the treatment to be accorded the balance
or any portion thereof in respect of the
head office of a financial institution
organised abroad, and where such balances
 are negative they will be subtracted from
specified assets;

(g) money at call in monetary areas approved

by the Central Bank under paragraph (f),
bills of exchange bearing at least two good
signatures drawn on and payable at any
place in the approved monetary areas, and
treasury bills issued by the government of a
country in any such approved monetary
areas and maturing within 180 days.

(8) A financial institution contravenes this section if -

(a) it fails to furnish promptly any information

required by the Central Bank to satisfy
itself that the financial institution is
observing the requirements of this section;
or

(b) it allows its holdings of specified assets to

be less than the amount which is fixed from
time to time; or

(c) during the period of any such deficiency of

specified assets the financial institution
grants or permits increases in its
outstanding advances, whether by loans or
overdrafts or investment portfolio other
than investment in specified assets.

(9) Any financial institution that contravenes this

section may be ordered by the Central Bank to pay a charge at an annual
rate not exceeding twice the highest rate fixed at the time of such failure
by the Central Bank pursuant to Article 32 of the Agreement for any of its
operations on the amount of the deficiency for so long as the failure
continues, and such charge shall be payable to the Central Bank on such
date as may be fixed by the Central Bank and may be recovered by
deduction from any balance of the financial institution with the Central
Bank.

Credit Institution. 18. The Minister may, after consultation with the Central
Bank, by Order direct that any provision of this Act, which at the date of
the commencement of this Act does not apply to a credit institution, shall
apply with such modifications, adaptations, qualifications and exceptions
as may be specified in the Order to any credit institution or class of credit
institution.
 PART III

AUDIT, INFORMATION AND INSPECTION

Annual audit, 19. (1) A financial institution shall appoint annually an

report and auditor satisfactory to the Central Bank whose duties shall be to examine
publication of the books and records and to make a report upon the annual financial
financial statements and financial position, and in every such report the auditor
statements and shall state whether in his opinion the balance sheet and profit and loss
results. account give a true and fair view of the state of affairs of the financial
institution and of its results for the period then ended.

(2) The report of the auditor made in accordance with

subsection (1) shall be presented with the report of the board and the
financial statements of the financial institution at the annual meeting of
shareholders or other owners of each local financial institution and shall
be transmitted to the head office of each foreign financial institution. A
copy of the financial statements and reports shall be sent to the Minister
and the Central Bank within four months of the end of the financial year.

(3) A local financial institution shall within four months

of the end of its financial year publish in the Gazette a true and full yearly
statement of its accounts of all its operations as certified by its auditor.
Such statement shall be signed by the manager or by such other officer of
the financial institution as may from time to time be authorised by the
financial institution to sign such statement on behalf of the financial
institution.

(4) A foreign financial institution shall within four

months of the end of its financial year publish in the Gazette a true and
full yearly statement of its accounts of all its operations in ( ) as
certified by its auditor. Such statement shall be signed by the manager or
by such other officer of the financial institution as may from time to time
be authorised by the financial institution to sign such statement on behalf
of the financial institution.

(5) If any financial institution fails to comply with the

requirements of subsections (2), (3) and (4) within four months of the end
of its financial year, it shall be liable to a penalty of a hundred dollars for
every day of such default except when an extension to the period has been
granted by the Central Bank pursuant to section 25.

(6) If a financial institution fails to appoint an auditor

satisfactory to the Central Bank, the Central Bank shall have the power to
appoint an auditor for such financial institution. The remuneration of the
auditor so appointed shall be determined by the Central Bank and paid by
 the financial institution.

(7) No person having an interest in any financial

institution otherwise than as a depositor and no director, manager,
secretary, employee or agent of a financial institution shall be eligible for
appointment as auditor for such financial institution.

(8) Any person appointed as auditor who shall, after

such appointment, acquire any interest or become a director, manager,
secretary, employee or agent of such financial institution shall forthwith
cease to be such auditor.

Central Bank 20. (1) The Central Bank, shall examine or cause an
examination. examination to be made of each licensed financial institution from time to
time or whenever in its judgement such examination is necessary or
expedient in order to determine that such financial institution is in a sound
financial condition and that the requirements of this Act have been
complied with in the conduct of its business.

(2) For the purpose of determining the condition of a

financial institution and its compliance with this Act, the Central Bank
may at any time examine or cause an examination to be made of any of its
affiliates in ( ) to the same extent that an examination may be made
of the financial institution.

(3) The Central Bank may assess a financial institution

for the reasonable expenses of conducting an examination under
subsections (1) and (2).

Disclosure and 21. (1) A licensed financial institution shall produce for the
access to books inspection of any examiner appointed by the Central Bank at such time as
and records by the examiner specifies all books, minutes, accounts, cash, securities,
Central Bank documents and vouchers relating to its business in ( ) as requested
examiner for by the examiner for the purpose of this Act.
inspection.
(2) If any books, minutes, accounts, cash, securities,
documents and vouchers are not provided or information is not supplied
in accordance with subsection (1), the defaulting financial institution or
affiliate or both shall be guilty of an offence and shall be liable on
summary conviction to a fine not exceeding three thousand dollars and in
the case of a continuing offence to a further penalty of five hundred
dollars for each day on which the offence is continued after conviction
thereof.

(3) If any information supplied or item produced is

false in any material particular, the financial institution or affiliate or both
shall be guilty of an offence and shall be liable on summary conviction to
a fine not exceeding five thousand dollars.

22
Central Bank's 22. If in the opinion of the Central Bank an examination
powers and authorised under section 20 shows that the financial institution concerned
measures for is conducting its business in an unlawful or unsound manner or that it is
preventing adverse otherwise in an unsound condition, the Central Bank may:
consequences.
(a) require that the financial institution
forthwith take all such measures as the
Central Bank may consider necessary to
rectify the matter; or

(b) advise the Minister to revoke the licence of

the financial institution.

Production of 23. (1) The Central Bank may from time to time call for
information as any information which it may require for the purposes of this Act from
required by any financial institution about its operations and those of its affiliates in (
theCentral Bank. ) or from a local financial institution about its operations and those of
its affiliates abroad.

(2) The Central Bank shall forward copies of balance

sheets, statements and summaries of reports on the results of any
inspection to the Minister and the financial institution.

Restriction on 24. (1) No licensed financial institution shall engage in

advertising likely advertising practices which are likely to mislead the public concerning -
to mislead the
public. (a) the relation of the financial institution to the
Central Bank or any department or official
thereof;

(b) the interest rate paid on deposits or charged

on credit;

(c) the insured or guaranteed status of deposits

or other liabilities of the financial
institution;

(d) the financial condition of the financial

institution.

(2) The Minister, after consultation with the Central

Bank, may issue an Order to a financial institution as is necessary, to
secure compliance with the provisions of subsection (1).

(3) Any financial institution which contravenes

subsection (1) or an order issued under subsection (2), commits an

23
 offence and is liable on summary conviction to a fine not exceeding (five
thousand) dollars for each contravention.

Extension of 25. At the request of a financial institution, the Central Bank

period for may extend, from time to time, any period within which such financial
providing institution is, in accordance with the provisions of this Act, obliged to
information. furnish any document or information.

PART IV

MISCELLANEOUS

Removal and 26. (1) Any person who is a director, manager or other
disqualification of officer concerned with the management of a financial institution shall
Director. cease to hold office upon:

(a) notification by the board of a finding by

two-thirds of its members of his permanent
incapacity or serious neglect of, or
misconduct in, office; or

(b) his being declared bankrupt or

compounding with, or suspending payment
to, his creditors; or

(c) his conviction in a court of law of any

offence involving fraud or dishonesty; or

(d) his being sentenced for an offence

involving a term of imprisonment of or
exceeding six months or in default of a
payment of a fine.

(2) No person who has been a director of, or directly or

indirectly concerned, in, the management of a financial institution the
licence of which has been revoked shall, without the approval of the
Central Bank, act or continue to act as a director, or be directly or
indirectly concerned in the management of any financial institution.

(3) A person who contravenes subsection (1) or (2)

commits an offence and is liable on summary conviction to a fine not
exceeding ten thousand dollars or to imprisonment for a term not
exceeding one year or to both such fine and imprisonment.

27. (1) Every director of a financial institution who is in

Declaration and any manner whatsoever, directly or indirectly interested in loans,
registration of advances, contracts or transactions from that financial institution shall as
related interest soon as possible declare the nature of his interest to the board or other

24
and conflict of body responsible for the management of that institution and shall cause
interest by such declaration to be circulated forthwith to all of the members of the
Director. Board.

(2) For the purpose of subsection (1) a declaration by a

director of a financial institution to the effect that he is to be regarded as
interested in any loan, advance, contract or other transaction, which may,
after the date of the notice, be made by the financial institution shall be
deemed to be a sufficient declaration of interest in relation to any loan,
advance, contract or other transaction so made if:

(a) it specifies the nature and extent of his

interest; and

(b) his interest is not different in nature from, or greater in extent

than, the nature and extent so specified in such notice at the time any
advance is made. (3) Every director of a financial
institution who holds any office or possesses any property whereby,
whether directly or indirectly, duties or interests might be created in
conflict with his duties or interests as such director in ( ) shall
declare the fact, nature, character and extent of the conflict at the first
meeting of the board held:

(a) after he becomes a director of the financial

institution; or

(b) if already a director, after he commences to

hold office or to possess the property.

(4) Every director of a financial institution who

qualifies as an interested director under the provisions of this section shall
cause to be brought up and read any declaration made under subsection
(1) or (3) at the next meeting of the board after it is given, and shall cause
to be recorded any declaration made under this section in the minutes of
the meeting at which it was made or at which it was brought up or read.

(5) A director who contravenes subsection (1) or

subsection (3) commits an offence and is liable on summary conviction to
a fine not exceeding five thousand dollars or to imprisonment for a term
not exceeding one year or to both such fine and imprisonment.

Responsibility for 28. Any director, manager, secretary, employee or agent of a

deceiving financial institution who:
statements and
obstruction of (a) with intent to deceive:
audit or authorised
examination. (i) makes any false or misleading

25
 statement or entry;

(ii) omits any statement or entry

thatshould be made in any book,
account, report or statement of the
financial institution; or

(b) obstructs or endeavours to obstruct:

(i) the proper performance by an

auditor of his duties in accordance
with the provisions of this Act; or

(ii) a lawful examination of the

financial institution by a duly
authorised examiner appointed by
the Central Bank;

commits an offence and is liable on summary conviction to a fine not

exceeding fifteen thousand dollars or to imprisonment for a term not
exceeding two years or to both such fine and imprisonment.

Management's 29. Any director, manager, secretary or other officer

duty of concerned in the management of financial institution who:
compliance with
the requirements (a) fails to take all reasonable steps to secure
of the laws. compliance by the financial institution with
the requirements of this Act; or

(b) is implicated in an offence committed under

section 24;

commits an offence and is liable on summary conviction to a fine not

exceeding fifteen thousand dollars or to imprisonment for a term not
exceeding two years or to both such fine and imprisonment.

Liability of 30. (1) Where an offence under this Act has directors, been
directors, officers committed by a body of persons which is -
and partners.
(a) a body corporate, society or partners. other
body of persons, every person who at the
time of the commission of the offence was
a director, manager, secretary or other
officer of the body corporate, society or
other body of persons as well as that body
corporate, society or other body of persons
commits the offence;

26
 (b) a partnership or firm, every partner of the
partnership or firm as well as that
partnership or firm commits the offence,

and shall be liable to be proceeded against and punished accordingly.

(2) No person referred to in subsection (1) shall be

found guilty of an offence under that subsection where he proves, that -

(a) the act constituting the offence took place

without his knowledge or consent, or

(b) he exercised all due diligence to prevent the

commission of the offence.

Secrecy of 31. (1) No person who has acquired knowledge in his

Information. capacity as director, manager, secretary, officer, employee or agent of
any financial institution or as its auditor or receiver or official liquidator
or as director, officer, employee or agent of the Central Bank, shall
disclose to any person or governmental authority the identity, assets,
liabilities, transactions or other information in respect of a depositor or
customer of a financial institution except:

(a) with the written authorization of the

depositor or customer or of his heirs or
legal personal representatives; or

(b) for the purpose of the performance of his

duties within the scope of his employment
in conformity with the provisions of this
Act; or

(c) when lawfully required to make disclosure

by any court of competent jurisdiction
within ( ); or

(d) under the provisions of any law of (

) or agreement among the participating
Governments;

but nothing herein shall prevent a financial institution from providing to a

person, upon a legitimate business request, a general credit rating, a
summary of which will be provided to the depositor or customer upon

27
 request.

(2) Every person who contravenes the provisions of

subsection (1) commits an offence and is liable on summary conviction to
a fine not exceeding fifteen thousand dollars or to imprisonment for a
term not exceeding two years or to both such fine and imprisonment.

Working days of 32. (1) All financial institutions in ( ) shall remain

financial open for business during such hours and on such days, except public
institutions. holidays, as may be agreed to by the Minister after consultation with the
Central Bank.

(2) Any obligation which can only be fulfilled at a

financial institution which would fall due on any day or at any particular
hour on which such financial institution is not open for business under
subsection (1) shall be deemed to fall due on the first working day
thereafter.

(3) The Minister after consultation with the Central

Bank, may, by notice in the Gazette, declare any day upon which no
financial institution may be open for business, without regard to whether
or not such day is or is not also a public holiday.

33. The Minister upon the recommendation of the Central Bank

Regulations. may make such Regulations as may be required from time to time for
giving effect to the provisions of this Act, and, without limiting the
generality of the foregoing, may make Regulations respecting -

(a) the reports or other information to be

supplied by persons to whom licences have
been granted and any other matter
associated with their use;

(b) the records to be kept, returns and reports

to be made to the Central Bank or the
Minister by persons who are appointed as
auditors under the Act;

(c) the character of the records to be kept by

any financial institution and the form of the
report and returns to be made by the
financial institution and fixing the times
when such reports and returns shall be
made;

28
 (d) the forms necessary for the administration
of this Act; and

(e) the penalties that may be imposed for

violations of orders and Regulations made
under this Act and may also prescribe the
penalties to be imposed upon summary
conviction, but no such penalty shall
exceed a fine of five thousand dollars or
imprisonment of a term exceeding twelve
months.

Compounding of 33A. (1) Subject to this section, the Minister on consultation

offences. with the Central Bank may, if he is satisfied that any person has
committed an offence under the Act, or under any Order or Regulation
made under this Act, compound such offence, by accepting from the
person a sum of money not exceeding five thousand dollars.

(2) The power conferred by subsection (1) shall only be

exercised where the person admits that he has committed the offence and
agrees in writing to the offence being dealt with under this section.

(3) If any proceedings are brought against any person

for an offence under this Act or under any Order or Regulation made
under this Act, it shall be a defence if the person proves that the offence
with which he is charged has been compounded under this section.

(4) Any sum of money received under this section shall

be dealt with as if the sum of money were a fine imposed by a court.

PART V

RECEIVERSHIP, LIQUIDATION AND REORGANISATION

Voluntary 34. A voluntary liquidation of a financial institution shall be

liquidation. subject to authorisation by the Minister upon the recommendation of the
Central Bank and the Central Bank shall so recommend when-

(a) the financial institution is solvent and has

sufficient liquid assets to repay its
depositors and other creditors without
delay; and

(b) the liquidation has been properly approved

29
 by the members or shareholders of the
financial institution.

Cessation of 35. When it has received the authorisation of Minister, the

business financial institution shall:
operations.
(a) immediately cease to carry on business,
retaining only the powers necessary to
effect an orderly liquidation;

(b) repay its depositors and other creditors; and

(c) wind up all operations undertaken prior to

the receipt of the authorisation.

Notice to 36. (1) Within thirty days from the receipt of authorisation
depositors referred to in section 34 a notice of voluntary liquidation, setting out such
of voluntary information as the Minister, upon the recommendation of the Central
liquidation. Bank may by Order prescribe, shall be sent by mail to all depositors,
other creditors and persons otherwise entitled to the funds or property
held by the financial institution as a trustee, lessor of a safe deposit box or
bailee.

(2) The notice shall be posted conspicuously on the

premises of each office and branch of the financial institution and shall be
given such publication as the Minister, upon the recommendation of the
Central Bank, shall direct.
(3) The Minister, upon the recommendation of the
Central Bank, may exempt the mailing of such notice to specified persons
upon a showing of cause therefor by the financial institution.

Rights of 37. (1) The authorisation to go into voluntary liquidation

depositors and shall not prejudice the rights of a depositor or other creditor to payment in
creditors in full of his claim nor the right of an owner of funds or other property held
voluntary by the financial institution to the return thereof.
liquidation.
(2) All lawful claims shall be paid promptly and all
funds and other property held by the financial institution shall be returned
to their owners within such maximum period as the Minister, upon the
recommendation of the Central Bank, shall by Order prescribe.

Distribution of 38. (1) When the Minister, after consultation with Central
assets. Bank, is satisfied that the financial institution has discharged all the
obligations referred to in section 37, it shall be struck from the list of
licensed financial institutions and the remainder of its assets shall be
distributed among its shareholders in proportion to their respective rights,
but no such distribution shall be made before:

30
 (a) all claims of depositors and other creditors
have been paid or, in the case of a disputed
claim, before the financial institution has
turned over to the Central Bank as agent for
the Minister, sufficient funds to meet any
liability that may be determined by a court
of competent jurisdiction;

(b) any funds payable to a depositor or other

creditor who has not claimed them have
been turned over to the Central Bank, as
agent for the Minister;

(c) any other funds and property held by the

financial institution that could not be
returned to the owners thereof in
accordance with the provisions of section
37 have been transferred to the Central
Bank as agent for the Minister, together
with the inventories pertaining thereto.

(2) Any funds or property not claimed within a period

of fifteen years following a transfer to the Central Bank, as agent for the
Minister shall be presumed to be abandoned property for purposes of
section 57.

Insufficiency of 39. If the assets of a financial institution, whose voluntary

assets in discharge liquidation has been authorised will not be sufficient for the full discharge
of obligations in of all its obligations or completion of the liquidation is unduly delayed,
voluntary the Minister, after consultation with the Central Bank, may cause the
liquidation. commencement of proceedings leading to its compulsory liquidation or
reorganisation in conformity with the procedures set out below.

Appointment of 40. The Minister, acting upon the recommendation of the

Receiver. Central Bank, shall appoint a receiver for any financial institution:

(a) whose capital is impaired or whose

condition is otherwise unsound;

(b) whose business is being conducted in an

unlawful or imprudent manner;

(c) when the continuation of its activities is

detrimental to the interests of its depositors;

(d) that refuses to submit its accounting records

and its operations for inspection as

31
 provided for in section 21 or has otherwise
obstructed such inspection;

(e) whose licence has been revoked in

accordance with section 10 or 22.

Notice of 41. When appointing a receiver, the Minister shall post on the
appointment of premises of the financial institution a notice announcing the appointment
receiver. and the time when such appointment shall be deemed to take effect. This
time shall not be earlier than the posting of the notice. A copy of the
notice shall be transmitted to the Registrar of the High Court.

Financial institution 42. Within a period of ten days after the date on which the
may institute proceed- Minister has appointed a receiver, the financial institution may institute
ings to have
Receiver’s appoint-
proceedings in the High Court to have this appointment revoked.
ment lifted.

Period of 43. (1) Within a period of sixty days counting from the date
Obligation to of the appointment of the receiver, the Minister after consultation with
commence Central Bank, shall be obliged to commence proceedings leading to:
compulsory
liquidation or (a) compulsory liquidation in accordance with
reorganisation. section 44, or

(b) reorganisation, in accordance with section

49,

of a financial institution for which he has appointed a receiver.

(2) In the event that proceedings under subsection (1)

are not commenced within that period, and the Minister has not sooner
elected to terminate his appointment, the appointment of the receiver shall
terminate forthwith.

Compulsory 44. (1) The Minister, after consultation with the Central
Liquidation, Bank, may, by petition, apply to the High Court to order the compulsory
Reorganisation liquidation or reorganisation of the financial institution for which a
proceedings. receiver has been appointed under section 40.

(2) Upon an application under subsection (1), the High

Court may make an order requiring the financial institution and any
person having an interest in the financial institution or claim against it to
show cause, at a time and place specified in the order which must not be
less than thirty days after the date of the order, why the financial
institution should not be liquidated and dissolved.

(3) A copy of an order made under subsection (2) must:

32
 (a) be published in the Gazette and in a
newspaper published or distributed in (
) as directed in the order at least twice
before the time appointed for the hearing;
and

(b) be served upon each person named in the

order.

(4) Publication and service of an order under this

section shall be effected by the financial institution or by such other
person and in such manner as the High Court may order.

Powers of the 45. (1) The High Court may make any order it thinks fit,
High Court. including:

(a) an order for the compulsory liquidation of

the financial institution;

(b) an order refusing the compulsory

liquidation and terminating the appointment
of the receiver; and
(c) an order for the reorganisation of the
financial institution.

(2) Where the High Court orders either the compulsory

liquidation or the reorganisation of the financial institution, it shall upon
delivering its decision simultaneously order the appointment of the
receiver to be terminated and appoint an official Liquidator who will be
responsible to the High Court to direct the compulsory liquidation, or as
the case may be, the reorganisation of the financial institution.

(3) As soon as possible after his appointment, the

Official Liquidator will make an inventory of the assets of the financial
institution and transmit a copy thereof to the Registrar of the High Court.

Powers of 46. (1) After his appointment by the Minister, the receiver
receiver, official and, subsequent to his appointment by the High Court, the Official
liquidator. Liquidator shall be vested with the full and exclusive power of
management and control of that financial institution in ( ), including
the power:

(a) to continue or discontinue its operations;

(b) to stop or limit the payment of its

obligations;

(c) to employ any necessary staff and to

33
 terminate their employment;

(d) to execute any instrument in the name of

the financial institution;

(e) to initiate, defend and conduct in its name

any action or proceeding to which the
financial institution may be party;

(f) to restore the financial institution to its

board; and

(g) to reorganise or liquidate the financial

institution in accordance with the provisions
of this Act.

(2) The actions of the receiver or, as the case may be,
the Official Liquidator shall be promptly notified to the Central Bank.

Term extensions 47. When the Minister has appointed a receiver for a financial
and attachment institution in accordance with section 40 and thereafter when the Official
transfer of assets Liquidator has been appointed by the High Court -
to be void.
(a) any term, statutory, contractual or
otherwise, on the expiration of which a
claim or right to the financial institution
would expire or be extinguished shall be
extended by six months from the date of the
appointment of the receiver;

(b) any attachment or lien except a lien

registered prior to the appointment of the
receiver for the financial institution shall be
vacated and no attachment or lien except a
lien created by the receiver or the Official
Liquidator in the application of the
provisions of this Part shall attach to any of
the property or assets of the financial
institution so long as such possession
continues;

(c) any transfer of an asset of the financial

institution made after or in contemplation
of its insolvency or the appointment of the
receiver with intent to effect a preference
shall be void.

Execution against 48. No execution shall be returned against the assets of a

34
assets of an financial institution for which a receiver or an Official Liquidator has
official institution. been appointed except an execution effected pursuant to a judgement
rendered prior to the date of the appointment of the receiver or Official
Liquidator for an amount not exceeding one thousand dollars.

Reorganisation 49. (1) If the High Court decides to reorganise the financial
proceedings. institution, whether pursuant to a request by the Minister after
consultation with the Central Bank, or by virtue of its authority under
section 45 (1), the Official Liquidator shall, after granting a hearing to all
interested parties, send a copy of the reorganisation plan to all depositors
and other creditors who will not receive full payment of their claims
under the reorganisation plan.

(2) The copy of the reorganisation plan shall be

accompanied by a notice stating that if the reorganisation plan is not
refused in writing within a period of thirty days:

(a) by persons holding at least one third of the

aggregate amount of deposit and other
liabilities in ( ), or,

(b) if the subject of the plan is a local financial

institution, by members of the financial
institution owning at least one third of its
issued capital, or

(c) if within the same period of thirty days the

High Court does not order a stay of
proceedings,

the Official Liquidator will proceed to carry out the reorganisation plan.

(3) The Official Liquidator may, subject to

confirmation by the High Court to be obtained before the commencement
of the thirty-day period, effect service of the reorganisation plan and the
notice shall be published in the Gazette.

Reorganisation 50. The application of any reorganisation plan under the

provisions. provisions of this Act is subject to the following conditions:

(a) the reorganisation plan shall be equitable to

all classes of depositors, other creditors and
shareholders;

(b) the reorganisation plan shall provide for

bringing in new funds so as to establish
adequate ratios between

35
 (i) capital and deposits; and

(ii) liquid assets and deposits; and

(c) the reorganisation plan shall provide for the

removal of any director, manager,
secretary, officer or employee responsible
for the circumstances which led to the
appointment of a receiver for the financial
institution and subsequently of an Official
Liquidator in accordance with sections 40
and 45 (2), respectively.

Petition for 51. When in the course of reorganisation it appears that

modification or circumstances render the plan inequitable or its execution undesirable, the
revision of Official Liquidator may apply to the High Court by petition to:
reorganisation.
(i) modify the plan, or

(ii) order the compulsory liquidation of

the financial institution in
accordance with the provisions of
section 45.

Preferential and 52. (1) Notwithstanding any law to the contrary in a

other claims. compulsory liquidation of a financial institution, the following claims
shall have priority against the general assets of the financial institution as
follows:

(a) necessary and reasonable expenses incurred

by the receiver and subsequently by the
Official Liquidator;

(b) wages and salaries of officers and

employees of the financial institution in
liquidation for the six-month period
preceding the appointment of the receiver
for the financial institution;

(c) national insurance contributions for officers

and employees due but not paid;

(d) balances of three hundred dollars and less

in saving and time deposits;

(e) other deposits;

(f) taxes, rates and deposits owed to ( )

36
 and local authorities concerned;

(g) fees and assessments due to the Central

Bank.

(2) After payment of all other claims filed, with interest

thereon at a rate to be fixed by the Official Liquidator with the approval
of the High Court, any remaining claims which were not filed within the
prescribed time shall be paid.

(3) If the amount available for any class is insufficient

to provide payment in full, the said amount shall be distributed pro rata
among the members of the class.

Unclaimed funds. 53. Unclaimed funds remaining after the final distribution
made by the Official Liquidator which are not subject to other provisions
of this Act shall be deposited by the Official Liquidator in the Central
Bank for fifteen years, unless claimed by the owner before the expiration
of that period, and on the expiration of that period the funds remaining
unclaimed shall be presumed to be abandoned property for the purposes of
section 57.

Shareholders 54. Any assets remaining after all claims have been paid shall
rights on be distributed among all the shareholders in proportion to their
remaining assets. participation.

Safe deposits and 55. Any safe deposit boxes the contents of which have not been
unclaimed withdrawn before a date specified by the Official Liquidator shall be
property. opened by the Official Liquidator and their contents and any unclaimed
property held by the financial institution as bailee, together with
inventories pertaining thereto, shall be deposited by the Official
Liquidator in the Central Bank there to be kept for fifteen years, unless
claimed by the owner before the expiration of that period. On the
expiration of that time all funds and property not claimed shall be
presumed to be abandoned for purposes of section 57.

Receiver's audited 56. (1) When all assets have been distributed in accordance
accounts, striking with the provisions of this Act, the Official Liquidator shall render an
the name of the audited account to the High Court.
institution and
conclusion of (2) Upon approval of this account by the High Court,
liquidation. the name of the financial institution shall be struck from the list of
financial institutions in ( ), the Registrar of the High Court shall be
notified and the Official Liquidator shall be relieved of any liability in
connection with the liquidation. The liquidation and dissolution of the
financial institution shall then be declared by the High Court and the
Registrar of the High Court shall proceed to terminate the judicial
existence of the financial institution.

37
 PART VI

ABANDONED PROPERTY

Abandoned 57. (1) Subject to subsection (2) the items in paragraphs

Property. (a), (b), (c) and (d) which are held or owing by a financial institution
shall be presumed to be abandoned:

(a) any general deposit (demand, savings or

matured time deposit) made in ( ) with
a financial institution, together with any
interest or dividend, but excluding any
lawful charges thereon;

(b) any funds paid in ( ) toward the

purchase of shares or other interests in a
financial institution, together with any
interest or dividend, but excluding any
lawful charges thereon;

(c) any sum payable on cheques certified in (

) or on written instruments issued in (
) on which a financial institution is
directly liable;

(d) any contents of a safe deposit box upon

which the lease or rental has expired and
concerning which notice of the intention of
the financial institution to deliver the
contents thereof into the custody of the
Central Bank has been sent by registered
letter to the last known address of the lessee
and to which the lessee has failed to
respond within one year.

(2) The items enumerated in paragraphs (a), (b) and (c) of

subsection (1) shall not be presumed to be abandoned if the owner has,
within fifteen years of the date of deposit, payment of funds or issuance
of instruments, as the case may be:

(a) increased or decreased the amount of the

deposit or funds or presented the passbook
or other record for the crediting of interest
or dividends in respect of the items
enumerated in paragraphs (a) or (b) of
subsection (1);

38
 (b) corresponded in writing with the financial
institution concerning the items; or

(c) otherwise indicated an interest in the items

as evidenced by a memorandum concerning
them written by a financial institution.

Report, 58. (1) Every financial institution holding any of the items
publication enumerated in section 57 shall within ninety days after the end of its
and disposal of financial year report such holdings to the Central Bank, and thereafter pay
abandoned or deliver to the Central Bank all property presumed to be abandoned
property. listed in the report in accordance with the Regulations which the Minister,
acting on the recommendation of the Central Bank shall make. Upon
paying or delivering such property into the custody of the Central Bank a
financial institution shall be relieved of all liability to the extent of the
value of the property for any claim in respect thereof.

(2) Except with the approval of the Minister, acting on

the recommendation of the Central Bank, on such terms and conditions as
he may prescribe, no reduction in the amount of interest or dividends
payable and no charges in excess of those made in respect of comparable
active accounts shall be made by a financial institution either during the
period of inactivity of the items set out in section 57 (1) or at the time
payment and delivery of them under subsection (1) is required.

(3) Within 30 days after the end of its financial year but
before the filing of the report to the Central Bank required by subsection
(1), a financial institution shall publish in the Gazette, the name of the
owner and particulars concerning the property and shall mail a notice to
the owner at his last known address containing particulars concerning the
property.

Sale and handling 59. (1) A financial institution may sell at public sale all
of proceeds of property other than money presumed to be abandoned after the expiration
sale of abandoned of 60 days from the later date of publication or mailing required by
property. section 58(3) following such advertisement of the sale as the Minister,
acting on the recommendation of the Central Bank, may prescribe.

(2) Any purchaser shall receive title to the property free

from all claims of the owner or prior holder and from all persons claiming
through or under him.

(3) A financial institution shall deposit with the Central

Bank the proceeds of the sale of property in accordance with subsection
(1) less all reasonable costs incurred by it in connection with the sale,
mailing of notices, and service as it may deem appropriate to assure the

39
 prompt payment of claims which may subsequently be made and approved
by the Minister, acting on the recommendation of the Central Bank.

(4) Any property remaining unsold shall be delivered to

the Central Bank and shall be disposed of by the Central Bank in such
manner as the Minister may direct.

Claims on 60. (1) Any person claiming an interest in any property

abandoned which has been paid to, or delivered into the custody of the Central Bank
property. or in the proceeds from the sale thereof may file a claim thereto, with the
Central Bank and, after an appropriate hearing the decision of which shall
be communicated to the claimant and made a public record, the Central
Bank may deliver up the property or make payment.

(2) Any person aggrieved by a decision of the Central

Bank may commence an action in the High Court to establish his claim
within 30 days following the decision of the Central Bank.

Penalties. 61. Any financial institution which wilfully fails to file the
report or to pay or deliver property presumed to be abandoned into the
custody of the Central Bank in accordance with section 58(1) or 59(3)
commits an offence, and it and each of its directors shall be liable on
summary conviction to a fine not exceeding one thousand dollars or to
imprisonment for a term not exceeding three months or to both such fine
and imprisonment.

PART VII

TRANSFER OF BANKING BUSINESS

Banking Business 62. (1) Where an agreement has been entered into for the
Vesting Order. acquisition by a financial institution (herein referred to as the "transferee
financial institution") of the undertaking of another financial institution,
whether or not a financial institution to which the provisions of this Act
apply (herein referred to as the "transferor financial institution) the
transferor financial institution may, for the purpose of effecting the
transfer to, and the vesting in, the transferee financial institution of the
undertaking, make a written application to the Minister, notice of which
shall be published in the Gazette in any case where the Minister so
directs.

(2) Upon the making of such an application, the

Minister shall request the Central Bank to investigate and report on the
application including in particular the circumstances leading to the
proposed transfer, the ability of the transferee to discharge its obligations
under the transfer and the effect, which the transfer is likely to have on
the banking services available to the public.

40
 (3) On receipt of the report from the Central Bank, the
Minister may, if he thinks fit, make an Order (in this Part called a
"Banking Business Vesting Order") transferring to and vesting in the
transferee financial institution the undertaking, as from the date specified
therein, and thereupon all such existing property, rights, liabilities and
obligations as are intended by the agreement to be transferred and vested
shall, by virtue of this Act, and without further assurance be transferred
to, and shall vest in, the transferee financial institution to the intent that
such financial institution shall succeed to the whole or such part of the
undertaking of the transferor financial institution as is contemplated by the
agreement.

(4) No transfer or vesting effected by a Banking

Business Vesting Order shall -

(a) operate as a breach of covenant or

condition against alienation;

(b) give rise to a forfeiture; or

(c) invalidate or discharge a contract or

security.

(5) Notwithstanding anything contained in any

enactment to the contrary, a Banking Business Vesting Order may in the
discretion of the Minister for the purposes of corporation tax, contain
provisions respecting -

(a) the carry forward; and

(b) the set off,

by the transferee financial institution of such of the losses of the transferor

financial institution as may be specified in the Order as if the undertaking
of the transferor financial institution had not been permanently
discontinued on the date specified in the Order and a new banking
business had been then set up and commenced by the transferee financial
institution.

Supplementary 63. (1) Without prejudice to the generality of section 62,

provision as to the effect of a Banking Business Vesting Order as regards the banking
transfers. business thereby transferred is that on and from the date of transfer -

(a) every existing contract to which the

transferor financial institution was a party,
whether in writing or not, has effect as if -

41
 (i) the transferee financial institution
had been a party thereto instead of
the transferor financial institution;

(ii) for any reference (however worded

and whether expressed or implied)
to the transferor financial institution
there were substituted as respects
anything falling to be done on or
after the date of the transfer, a
reference to the transferee financial
institution; and

(iii) any reference (however worded and

whether express or implied) to the
directors or to any director, officer,
clerk or servant of the transferor
financial institution were, as respect
anything falling to be done on or
after the date of transfer, a
reference (as the case may require)
to the directors of the transferee
financial institution may appoint, or
in default of appointment, to the
director, officer, clerk or servant of
the transferee financial institution
who corresponds as ready as may
be to the first mentioned director,
officer, clerk or servant;

(b) any account between the transferor

financial institution and a customer shall
become an account between the transferee
financial institution and that customer;

(c) any existing instruction, direction,

mandate, power of attorney or consent
given to the transferor financial institution
shall have effect as if given to the
transferee financial institution;

(d) any negotiable instrument or order for

payment of money which is expressed to be
drawn on, or given to, or accepted or
endorsed by the transferor financial

42
 institution, or payable at any of its places of
business, shall have effect as if it had been
drawn on, or given to or accepted or
endorsed by the transferee financial
institution, or payable at the same place of
business of the transferee financial
institution;

(e) any security transferred to the transferee

financial institution by a Banking Business
Vesting Order that immediately before the
date of the transfer was held by the
transferor financial institution as security
for the payment or discharge of any debt or
liability or obligation (whether present or
future, actual or contingent) shall be held
by, and be available to, the transferee
financial institution as security for the
payment or discharge of such debt or
liability or obligation; and any such
security which extends to future advances
or liabilities shall, from the date of the
transfer, be held by, and be available to,
the transferee financial institution as
security for future advances by, and future
liabilities to, the transferee financial
institution, in the same manner and in all
respects as future advances by, or liabilities
to, the transferor financial institution were
secured thereby immediately before the
date of the transfer;

(f) any judgement or award obtained by or

against the transferor financial institution
and not fully satisfied before the date of the
transfer shall be enforceable by or against
the transferee financial institution;

(g) unless the agreement by the parties to the

transfer provides to the contrary, any
officer, clerk, or servant employed by the
transferor financial institution immediately
before the date of the transfer shall become
an officer, clerk or servant, as the case may
be, of the transferee financial institution on
terms and conditions no less favourable
than those on which he was so employed
immediately before the date of the transfer,

43
 and such employment with the transferor,
and transferee financial institution
respectively shall be deemed, for all
purposes, to be a single continuing
employment, save that no director,
secretary or auditor of the transferor
financial institution shall by virtue only of a
Banking Business Vesting Order become a
director, secretary or auditor, as the case
may be, of the transferee financial
institution.

(2) The provisions of subparagraphs (1)(a)(ii) and

(1)(a)(iii) shall apply to -

(a) any statutory provision;

(b) any provision of any existing contract to

which the transferor financial institution
was not a party; and

(c) any provision of any other existing

document (not being a contract but
including in particular a will);

as they apply in relation to a contract to which paragraph (1)(a) applies.

(3) Any property or rights transferred to, and vested in,

the transferee financial institution which immediately before the date of
the transfer were held by the transferor financial institution, whether alone
or jointly with any other person -

(a) as trustee or custodian trustee of any trust,

deed, settlement, covenant, agreement or
will, and whether originally so appointed or
not, and whether appointed under hand or
seal or by order of any court;

(b) as executor of the will of a deceased

person;

(c) as administrator of the estate of a deceased

person;

(d) as judicial trustee appointed by order of any

court; or

(e) in any other fiduciary capacity whatsoever,

44
 shall, from the date of the transfer, be held by the transferee financial
institution whether alone or jointly with such other person, in the same
capacity upon the trusts, and with, and subject to, the powers, provisions,
liabilities and obligations, applicable thereto respectively.

Transfers to be 64. The transfer of, and vesting in, the transferee financial
subject to stamp institution of an undertaking by a Banking Business Vesting Order shall,
duty. unless exempted (either generally or in some particular case) by the
Banking Business Vesting Order, be subject to the provisions of the
(Stamp etc. Act) as if the Banking Business Vesting Order was, in each of
the cases in which the duty is imposed on the several instruments
specified in the Schedule to the (Act/Ordinance), an instrument between
party and party within the contemplation of the (Act/Ordinance).

PART VIII

GENERAL

Non-application of 65. The provisions of the Aliens (Landholding Regulation) Act,

Aliens (Landhold- 19[ ] do not apply to financial institutions licensed under this Act.
ing Regulation)
Act 19[ ]

Repeal and 66. The Banking Act [ ] is hereby repealed.

Saving.

Passed etc.

SCHEDULE I

Documents and Other Information Required

in order to obtain a Licence under Section 4 (1)

In order to obtain a licence as a financial institution, a person shall submit the following:

(a) authenticated copies of the instrument under which the applicant is organised;

(b) a statement of the address of its head office, the name and address of every member of its
board of directors;

(c) a statement of the name, address, qualification and experience of its chief executive
officer;

45
(d) such financial data as the Minister may require;

(e) full particulars of the business in which the applicant proposes to do business;

(f) the locations of the principal and other places of business where the applicant proposes to
do business;

(g) such other information as the Minister may require.

46