Press briefing of Cabinet Decision taken on 2011-04-27

Proposed Amendments to the Banking Act, No. 30 of 1988

- several developments have taken place in the domestic banking sector and in banking practices throughout the world, which has necessitated to consider further amendments to the Banking Act which was last amended in 2006. The proposed amendments will streamline and strengthen the regulatory and supervisory framework for licensed Banks to be in line with the best global standards and practices. The proposal made by H.E. the President to instruct the Legal Draftsman to prepare amending legislation for the purpose was approved by the Cabinet. Some of the salient features of the proposed amendments as follows:

* introduction of a definition to "significant management interest" in respect of ownership in licensed Banks and to empower the Monetory Board to issue directions to these Banks in that respect;
* introduction of a dispute resolution mechanism with respect to non-registration of shares due to inability to establish the beneficial interests of such shares;
* removal of exemption granted for the Subsidiaries of licensed Banks to use the word "Bank" as part of its name;
* repeal of provisions pertaining to numbered accounts; and
* enhancement of penalties to be in line with present trends.