This is the version of this Act as it was from 1 December 2014 to 8 April 2020. Read the latest available version.
- Is amended by Financial Institutions (Second Amendment) Act, 2020
- Is amended by Financial Institutions (Second Amendment) Act, 2020
- Is amended by Financial Institutions (Amendment) Act, 2020
- Is amended by Financial Institutions (Amendment) Act, 2020
Financial Institutions Act
- Commenced on 31 December 2004
- [This is the version of this document as it was at 1 December 2014 to 8 April 2020.]
Part I – Preliminary
1 Short titleThis Act may be cited as the Financial Institutions Act.
2. InterpretationIn this Act, unless the context otherwise requires—"abandoned property" has the meaning given in section 59;"administrator", in relation to a financial institution, means any person who is a director or managing director of such institution, or in the case of a branch of a foreign financial institution, the person designated as managing agent pursuant to section 313(1) of the Companies Act;"assigned capital", in relation to a branch of a foreign financial institution, means unimpaired capital assigned to the branch by its head office;"automated teller machine" means a terminal device, whether installed by a financial institution or other person, which is linked directly or indirectly to a computer system used by a financial institution and which provides facilities to the customers of the financial institution;"bank" means any person licensed under this Act to conduct banking business;"banking activities" means the activities that are listed in section 4;"banking business" means the business of receiving deposits of money or other repayable funds from the public and extending credits for its own account;"banking licence" means a licence to conduct banking business granted under section 6;"Board" means the Board of the Central Bank;"branch" means a place of business that forms a legally dependent part of a financial institution and conducts directly all or some of its licensed activities;"Bureau de Change" means a person licensed under this Act to carry on foreign exchange business;"Bureau de Change Licence" means a licence granted to a person under section 6 of this Act;"capital base" means the capital base referred to in section 23(4);"Central Bank" means the Central Bank of Seychelles established by section 3 of the Central Bank of Seychelles Act;"close relation", in relation to an administrator or a natural person holding a substantial interest in a financial institution, means spouse, parents, children or dependent relatives;"control", in relation to a financial institution, means the relationship between the financial institution and any body corporate in which the financial institution—(a)directly, indirectly or acting through one or more persons owns, controls or has the right to vote 20 percent or more of its voting shares or has the right to elect a majority of its directors; or(b)exercises such a controlling influence as the Central Bank may determine;"core capital" means the core capital referred to in section 23(4);"credit" means any commitment to disburse a sum of money in exchange for a right to repayment of the amount disbursed and outstanding and to payment of interest or other charges on such amount, any extension of the due date of a monetary claim, any guarantee issued, and any commitment to acquire a debt security or other instrument stipulating the payment of a sum of money;"Credit Information System" means a Credit Information System established under the Central Bank of Seychelles Act 2004;"debt security" means any negotiable instrument of indebtedness and any other instrument equivalent to such instrument of indebtedness, and any negotiable instrument giving the right to acquire another negotiable debt security (which may be in certificate or in book entry form) by subscription or exchange;"deposit" means a sum of money paid on terms—(a)that it is to be repaid in full, with or without interest or premium of any kind, and either on demand or at a time agreed by or on behalf of the person making the payment and the person receiving it; and(b)that is not referable to the provision of property or service or the giving of security, whether or not evidenced by any entry in a record of the person receiving the sum, or by any recent, certificate, note or other document. A sum of money paid to a body corporate in exchange for the issuance of corporate debentures or corporate bonds is not deemed to constitute receipt of a deposit or repayable funds under the meaning of this Act, unless such activity is done on a frequent basis as determined by the Central Bank;"director" has the meaning given in section 2(1) of the Companies Act, and in relation to a branch of a foreign financial institution includes the person designated as managing agent pursuant to section 313(1) of the Companies Act;"financial institution" means—(a)any bank; or(b)any Bureau de Change, and, for the purposes of this Act, all branches and agencies of a financial institution in Seychelles are deemed to be one financial institution;"foreign exchange business" means the business of buying and selling of foreign currency;"foreign financial institution" means a financial institution established under the laws of a country other than Seychelles;"group of closely-related customers" means —(a)two or more persons who, unless it is shown otherwise, constitute a single risk because one of them, directly or indirectly, has control as defined in this section above, over the other or others;(b)two or more persons between whom there is no relationship of control as defined in paragraph (a) but who are to be regarded as constituting a single risk because they are so interconnected that if one of them were to experience financial problems the other or all of the others would be likely to encounter repayment difficulties;"local financial institution" means a financial institution established under the law of Seychelles;"Minister" means the Minister for the time being responsible for finance;"net profits" means profits after providing for management charges and taxation;"place of business" means any branch, agency or mobile office of a financial institution in Seychelles which is open to the public;"reserve funds" means such funds transferred to the reserve fund under section 24;"rupees" means rupees in Seychelles currency;"sell" includes—(a)to sell by auction;(b)to offer or attempt to sell;(c)to expose, display or advertise for sale;(d)to sell or hire under a hire-purchase or installment sale agreement; or(e)to exchange or dispose of goods or services for any valuable consideration, and the expressions "to purchase" and "to buy" shall be construed accordingly;"substantial interest" means holding individually or together with a close relation, directly or indirectly, 10 percent or more of the capital or of the voting rights of a company or undertaking or, directly or indirectly, exercising such significant influence over the management of the company or undertaking as the Central Bank may determine;"subsidiary" means any body corporate in which another person or group of persons acting in concert holds—(a)the equivalent of fifty percent or more of the voting shares; or(b)a substantial interest that permits such other person or group of persons to exercise effective control over the management or policies of the subsidiary;"unsecured"—(a)in relation to credits, means credits granted without security;(b)in relation to credits against security, means any part of those credits 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 at any time when it considers that no market value exists for those assets.
Part II – Licences
5. Application for licence
6. Granting of licence
7. Terms and conditions of licence
8. Display of licenceA financial institution holding a licence shall display a copy of that licence conspicuously in a public part of each place of its business in Seychelles and shall continue to keep that copy so displayed.
9. Licensee to comply with rules, directions, etc.
10. Licence fee
11. Approval for branches
12. Restriction on use of words
13. Revocation of licence
14. Power of the Central Bank to prohibit operations of licensee
15. Urgent action
17. Suspension of business on revocation of licence
18. Surrender of licence
19. Revocation and variation of approval for branch business
20. Unlicensed banking
21. Central Bank's powers of investigationFor the purpose of section 20, the Central Bank may accordance with section 36 of the Central Bank of Seychelles Act, examine the books, accounts and records of the person suspected to be doing banking business without a licence to ascertain whether that is the case.
Part III – Capital and prudential requirements
22. Prudential requirementsNotwithstanding any other written law, every financial institution shall comply with the requirements of this Part, provided that for Bureaux de Change section 74 applies.
23. Minimum required capital
24. Reserve fund
25. Liquid assets
26. Local assets
27. Foreign currency exposureThe Central Bank may prescribe by regulation the maximum net open position which financial institutions may hold in any specified foreign currency or currencies.
28. Loan classificationThe Central Bank may prescribe by regulation the requirements concerning the classification and evaluation of assets and provisions to be made on the basis of such classification and evaluation against doubtful and non-performing loans, and the time when earnings on non-performing loans may no longer be accounted for as income except as received in cash.
29. Credit Concentration
30. Connected lending
31. Capitalised expensesA local financial institution shall not pay any dividend on its shares and a foreign financial institution shall not transfer overseas any profits earned in Seychelles, unless the Central Bank is satisfied, that—
32. Other prudential requirementsThe Central Bank may prescribe by regulation other prudential requirements regarding credits, investments, matching as to maturity and interest, maximum ratios and exposures concerning the assets, risk-weighted assets and off-balance sheet items and various categories of capital and reserves to be maintained by financial institutions.
33. Application on consolidated basisThe Central Bank may prescribe by regulation the rules for the application of the prudential requirements set out in this Part to a financial institution and its subsidiaries on a consolidated basis.
34. Other dutiesIt shall be the duty of every financial institution to ensure that—
Part IV – Accounts, audit, information and inspection
35. Annual balance sheet, etc.
37. Audit committee
38. Publication and display of balance sheet, etc.
40. Periodic statementsEvery financial institution shall submit periodic statements to the Central Bank in such form as the Central Bank may determine.
41. Disclosure requirements
42. Inspection of financial institutions
Part V – Control over management of financial institutions
43. Persons qualified to be administrators
43A. Central Bank to be notified of change in administratorsA financial institution shall, upon a change of its administrators, notify the Central Bank within 21 days of the change or of being made aware of the change, whichever is the latest.
44. Administrator to declare personal interest
45. Bribery and collusionAn administrator, officer, employee or agent of a financial institution shall not ask for or receive, consent or agree to receive, any gift, commission, emolument, service, gratuity, money, property or thing in value, for his or her own personal benefit or advantage or that of any of his or her close relations, for permitting or procuring or endeavoring to permit or procure for any person any credits from the institution.
46. Acquisition of substantial interest
48. Ban on receipt of deposits
49. Disclosure of information restricted
50. Confidentiality of information
51. Exchange of information
52. Publication of information by Central BankThe Central Bank may publish in whole or in part at such time as it may determine any information or data furnished under this Act, except that no information or data shall be published which might disclose the individual affairs of a financial institution or of a person whose interests are protected under section 49 unless the consent of every such person has been obtained in writing prior to that publication or the data is already in the public domain.
53. Central Bank's powers over unsafe practices
54. Suspension unaffected by appealThe filing of an appeal under section 53 (4) shall not effect a suspension of any measures imposed by the Central Bank.
55. Ban on credits against financial institution's own shares, etc.
56. Prohibited operations
57. Approval for transfer of assetsNo financial institution shall—
Part VI – Abandoned property
59. Abandoned property
60. Publication and notice of particularsA financial institution shall publish in at least one local newspaper the name of the owner and particulars of abandoned property and shall dispatch by registered post a notice to the owner at his last known address containing particulars of the property.
61. Reports of abandoned property
62. Right to claimAny owner who, to the satisfaction of the Central Bank, furnishes proof of ownership of abandoned property dealt with in accordance with sections 60 and 61, is, subject to any terms, conditions or restrictions imposed in respect of that abandoned property by or under any written law, entitled to the repayment of the funds by the Central Bank, or to the return other property or the proceeds from the sale of that other property, as the case may be.
Part VII – Offences and penalties
63. Offences and penalties
Part VIII – Miscellaneous
64. Bank holidays
65. Application of Companies ActExcept where expressly stated in this Act, nothing in this Act shall affect the operation of the Companies Act in respect of the incorporation and winding up of any financial institution to which that Act and this Act apply.
66. Amalgamation, winding up, closure etc.
67. Indemnity for the Central Bank, etc.Neither the Central Bank nor any member of its Board nor any officer, employee or agent of the Central Bank shall be subject to any action, claim or demand by or liability to any person in respect of anything done or omitted to be done in good faith under, or in execution or intended execution or in connection with the execution of, any power or duty conferred on the Central Bank by or under this Act.
68. Review by courtThe acts, directions, orders, determinations or decisions of the Minister or the Central Bank under this Act shall be subject to judicial review.
69. RegulationsThe Central Bank may, in consultation with the Minister, make regulations for the better carrying out of the objects and purposes of this Act including—
70. Rules of court
71. Non-application of ActExcept where it is otherwise expressly provided in this Act or any other written law the provisions of this Act in whole or in part shall apply to persons prescribed by regulations.
72. Compounding of offences
74. Non-application of certain provisions (foreign exchange business)The provisions of sections 24, 25, 26, 29, 30, 38(2) and (3), 44, 45, 49(2), 55, 56(2) to (4), 59, 60, 61 and 64(2) shall not apply to a financial institution or a person licensed to solely conduct foreign exchange business under this Act.
75. Transitional provisions
76. Repeal of Cap 12The Banking (Special Provisions) Act is hereby repealed.
77. Repeal of Cap 79
History of this document
09 April 2020
01 December 2014 this version
31 December 2004