Note:

(i) The internet version of this Act is for information only. The authoritative
version is the one published in the Government Gazette of Mauritius.

(ii) By virtue of Proclamation No.39 of 2004 as published in the Government

Gazette of 6 November 2004, sections 1,2 and 3(1) of PART I, sections 4 to
11, 12(1) to (4) and (6), 13 to 17, 18(1),(2) and (5) to (10) and 19 of PART II,
PART III to PART VIII and PART XII and sections 93 to 104 of PART XIII
of the Banking Act 2004 have come into operation on 10 November 2004.

(iii) By virtue of Proclamation No. 6 of 2007 as published in the Government

Gazette of 31 May 2007, sections 3(3) of Part I and 12(5) of Part II, Parts IX
to XI of the Banking Act 2004 have come into operation on 1 June 2007.

(iv) By virtue of Proclamation No. 12 of 2008 as published in the Government

Gazette of 13 September 2008, section 18(3) and (4) of the Banking Act 2004
has come into operation on 15 September 2008.

(v) Section 3(2) of Part I of the Banking Act 2004 has not yet been proclaimed.

(vi) Section 30(3B) has not yet been proclaimed.

THE BANKING ACT 2004

Act No. 35 of 2004

I assent

SIR ANEROOD JUGNAUTH

12th October 2004 President of the Republic
__________

ARRANGEMENT OF SECTIONS

Section
PART I - PRELIMINARY

1. Short title
2. Interpretation
3. Application of the Act

PART II - LICENSING OF BANKS AND OTHER FINANCIAL INSTITUTIONS

4. Restriction on use of word “bank”

5. Application for banking licence
6. Determination of application
7. Grant or refusal to grant banking licence
8. Licence fees
9. Display of banking licence
10. Power to vary conditions of banking licence
1
11. Revocation, suspension and surrender of banking licence
11A. Representative office of foreign bank
11B. Licensing of specialised financial institution
11C. Regulatory sandbox authorisation
11D. Establishment of fintech innovation hub and digital lab
12. Licensing of deposit taking business
13. Licensing of cash dealers
14. Granting of licences to cash dealers
14A. Licensing of credit information bureau or recognition of external credit assessment
institution
14B. Granting of licence to credit information bureau
14C. Recognition of external credit assessment institution
14D. (Repealed)
14E. Granting of licences to issuer of money market instruments
15. Display of licence
16. Variation, revocation and surrender of other licences
17. Procedure in cases of urgency
18. Limitations on management and remuneration
19. Other restrictions

PART III - CAPITAL STRUCTURE, RESERVE ACCOUNT AND OTHER

FINANCIAL PROVISIONS

20. Minimum capital requirements of banks

21. Maintenance of Reserve Account of banks
22. Liquid assets of banks
23. Failure to maintain minimum holdings
24. Minimum capital requirements
25. Minimum liquid assets of foreign exchange dealers
26. Other prudential requirements

PART IV - LIMITATIONS ON OPERATIONS

27. Restriction on payment of dividends

28. Limitation on advances or credits
29. Limitation on concentration of risk
30. Limitation on investments and non-banking operations
31. Acquisition of interest in a financial institution
32. Mergers
32A. Transfer of undertaking by bank

PART V - FINANCIAL STATEMENTS, AUDIT AND SUPERVISION

33. Records
34. Financial statements
35. Monthly statements
36. Credit assessments and asset appraisals
37. Disclosure of information
38. Correction of disclosure statement
2
39. Appointment, powers and duties of auditors
40. Audit committee
41. Termination of services of auditor
42. Regular examinations
43. Special examinations
44. Powers of examiners and special examiners
45. Powers of central bank following examination
45A. Freezing of assets

PART VI - RESPONSIBILITIES OF DIRECTORS AND OTHER OFFICERS OF

FINANCIAL INSTITUTIONS

46. Fit and proper person

47. Disqualification
48. Disclosure of interest
49. Indemnity insurance

PART VII - ELECTRONIC BANKING

50. Automated teller machines

51. Computer access
52. Electronic Delivery Channel
53. Clearing house and payments system
53A. New products, business practices, delivery mechanisms and technologies

PART VIII - ADMINISTRATION OF FINANCIAL INSTITUTIONS

54. Internal control systems

54A. Protection of whistleblowers
55. Identity of customers
56. Validity of thumb print
57. Bank’s obligations towards customers
58. Customer’s duty to report unauthorised signature or alteration
59. Abandoned funds
60. Evidence in relation to banker's books
60A. Certificate of senior officer of financial institution as evidence
61. Control of advertisement
62. Hours of business
63. Bank holidays
64. Confidentiality

PART VIIIA – PREVENTION OF MONEY LAUNDERING AND TERRORISM

FINANCING

64A. Programmes against money laundering and terrorism financing

64B. Customer due diligence information
64C. Examination of financial institutions or holders of licence
64D. Confidentiality of examination reports
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 PART IX - CONSERVATORSHIP

65. Appointment of conservator

66. Powers and duties of conservator
67. Term of office and remuneration of conservator
68. Resumption of office by directors upon conclusion of conservatorship
69. Rehabilitation or reorganisation of financial institution

PART X - VOLUNTARY LIQUIDATION

70. Procedures to go into voluntary liquidation

71. Notice and publication of voluntary liquidation
72. Rights of depositors and creditors
73. Distribution of assets
74. Insufficient assets

PART XI - COMPULSORY LIQUIDATION

75. Board to appoint a receiver

76. Notice of appointment of receiver
77. Duties of receiver
78. Powers of receiver
79. Powers of central bank under this Part
79A. Licensing of temporary financial institution
80. Receiver taking possession of financial institution
81. Execution against assets of a financial institution
82. Further powers of receiver
83. Inventory of assets
84. Safe deposit box
85. Receiver dealing with claims
86. Priority of claims
87. Submission of audited accounts to Bankruptcy Court
88. Liquidation of a financial institution
89. Civil and criminal actions

PART XII - WINDING UP OF FINANCIAL INSTITUTIONS GENERALLY

90. Winding up of financial institutions

91. Priority of deposit liabilities
92. Priority of deposit and other liabilities in case of winding up of a bank and non-bank
deposit taking institution

PART XIII - MISCELLANEOUS

93. Deposit insurance scheme

94. Derogations from articles 1659, 1660, 1661, 1673, 2087 and 2088 of the Code Civil
Mauricien for the purposes of repurchase transactions
95. Immunity
4
96. (Repealed)
96A. Protection of customers of financial institutions
96B. Limitation of interest
96C. Decision of United Nations Security Council
97. Offences and penalties
98. Prosecution for offence
99. Compounding of offences
100. Directives, guidelines or instructions
101. Regulations
102. Transitional provision
103. Consequential amendments
104. Repeal and savings
105. Commencement

-------------

An Act
To amend and consolidate the laws relating to the business of banking and
other financial institutions and to provide for related matters.

ENACTED by the Parliament of Mauritius, as follows -

PART I - PRELIMINARY

1. Short title

This Act may be cited as the Banking Act 2004.

2. Interpretation

In this Act -

“affiliate”, in relation to a financial institution, includes an entity which –

(a) is a holding company, subsidiary company or company which is under

common control of the financial institution;
(b) is a joint venture of the financial institution;
(c) is a subsidiary company or joint venture of the holding company of the
financial institution;
(d) controls the composition of the board of directors or other body
governing the financial institution;
(e) exercises, in the opinion of the central bank, significant influence on
the financial institution in taking financial or policy decisions; or
(f) is able to obtain economic benefits from the activities of the financial
institution;

“approval” means an approval given in writing;

5
“assigned capital” in relation to a bank incorporated outside Mauritius and having a
branch in Mauritius, means capital consisting of funds transferred from abroad and
such other funds as may be determined by the central bank;

“auditor” means an auditor as stated in section 39;

“bank” means a company incorporated under the Companies Act, or a branch of a

company incorporated abroad, which is licensed under section 7(5) of the Act to carry
on any of the following –

(a) banking business;

(b) Islamic banking business;
(c) private banking business;
(d) digital banking business;

“banking business” –
(a) means –

(i) the business of accepting sums of money, in the form of

deposits or other funds, whether or not such deposits or funds
involve the issue of securities or other obligations howsoever
described, withdrawable or repayable on demand or after a
fixed period or after notice; and

(ii) the use of such deposits or funds, either in whole or in part, for –
(A) loans, advances or investments, on the own account and
at the risk of the person carrying on such business;
(B) the business of acquiring, under an agreement with a
person, an asset from a supplier for the purpose of
letting out the asset to the person, subject to payment of
instalments together with an option to retain ownership
of the asset at the end of the contractual period;

(iii) paying and collecting cheques drawn by or paid in by

customers and making other payment instruments available to
customers; and

(b) includes such services as are incidental and necessary to banking;

“banking laws” –
(a) means this Act, the Bank of Mauritius Act, the Convention for the
Suppression of Financing of Terrorism Act, the Financial Intelligence
and Anti-Money Laundering Act, the Prevention of Terrorism Act, the
Prevention of Terrorism (International Obligations) Act and the United
Nations (Financial Prohibitions, Arms Embargo and Travel Ban)
Sanctions Act 2019; and

(b) includes such other enactment as may be prescribed;

6
“banking licence” means a banking licence, an Islamic banking licence, a digital
banking licence or a private banking licence granted under section 7;

“Bankruptcy Court” means the Bankruptcy Division of the Supreme Court;

“Board” means the Board of Directors of the central bank;

“body corporate” means an incorporated body wherever incorporated;

“cash dealer” means a body corporate licensed by the central bank to carry on the
business of foreign exchange dealer or money-changer;

“capital base” means capital as specified by the central bank from time to time;

“central bank” means the Bank of Mauritius established under the Bank of Mauritius
Act 2004;

“collective investment scheme” has the same meaning as in the Securities Act 2005;

“company” has the same meaning as in the Companies Act 2001;

“constitution”, in relation to a company, has the same meaning as in the Companies

Act 2001;

“control”, in relation to a financial institution, means control of any body corporate -

(a) in which the financial institution, directly or indirectly or acting

through one or more persons, owns, controls or has the right to vote 20
per cent or more of the voting securities of the body corporate to elect
a majority of its directors; or

(b) over which the financial institution, directly or indirectly, exercises a

controlling influence, as the central bank may determine;

“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 debt, any guarantee
issued, and any commitment to acquire a debt security or other right to payment of a
sum of money;

“credit information bureau” means any person licensed by the central bank to carry on
the business of collecting, consolidating and collating trade, credit and financial
information whether fund based or non-fund based on recipients of credit facilities
and guarantors for sale to creditors;

“crime” has the same meaning as in the Criminal Code;

“debt security” means any negotiable instrument of indebtedness and any other
instrument equivalent to such instrument of indebtedness, and any negotiable
instrument, whether in certificated or book entry form, giving the right to acquire
another negotiable debt security by subscription or exchange;

“demand liabilities” means the deposits in a bank which shall be repaid on demand;

7
“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 are not referable to the provision of property or services or the
giving of security,

whether or not evidenced by any entry in a record of the person receiving the sum, or
by any receipt, certificate, note or other document;

“deposit taking business” means the business of accepting –

(a) deposits of money for the purpose of -

(i) financing the specific activities of the non-bank deposit taking

institution receiving such deposits or such other activities as
may be approved by the central bank; and

(ii) investment in Government securities, Bank of Mauritius Bills

issued under the Bank of Mauritius Act 2004 or such other
investment as may be approved by the central bank; or

(b) Islamic deposits for the purposes of financing the activities of the non-
bank deposit taking institution receiving such deposits or such other
activities as may be approved by the central bank, the aims and
operations of which are, in addition to the conventional good
governance and risk management rules, in consonance with the ethos
and value system of Islam;

“digital banking business” means banking business carried on exclusively through

digital means or electronically;

“director” has the same meaning as in the Companies Act 2001;

“external auditor” means an auditor appointed under section 39;

“external credit assessment institution” means an institution recognised by the central

bank under section 14C for the purposes of carrying on the business of assigning
credit ratings on debt instruments and on issuers of debt instruments;

“financial institution” means any bank, non-bank deposit taking institution or cash
dealer licensed by the central bank;

“financial statements” has the same meaning as in the Companies Act 2001;

“fintech” means technologically enabled financial innovations which could result in

new business models, applications, processes or products with an associated material
effect on financial markets and institutions and the provision of financial services;

8
“foreign exchange dealer” means any body corporate licensed as such by the central
bank to carry on the business of -

(a) buying and selling foreign currency, including spot and forward
exchange transactions and wholesale money market dealings; and

(b) a money-changer;

(c) money or value transfer services;

“Government securities” has the same meaning as in the Public Debt Management
Act 2008;

“group financial statements” has the same meaning as in the Companies Act 2001;

“group of closely-related customers” means -

(a) two or more persons who, unless it is otherwise shown, constitute a

single risk because one of them, directly or indirectly, has control over
the other or others as defined in the Companies Act 2001;

(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;

“independent director” means a director having no relationship with, or interest in,

whether past or present, the financial institution or its affiliates, which could or could
reasonably be perceived to materially affect the exercise of his judgment in the best
interest of the financial institution;

“International Accounting Standards” has the same meaning as in the Companies Act
2001;

“Islamic banking business” means any financial business, the aims and operations of
which are, in addition to the conventional good governance and risk management
rules, in consonance with the ethos and value system of Islam;

“Islamic deposit” means a sum of money or monies worth received by or paid to any
person, under which the receipt and repayment shall be in accordance with the terms
of an agreement made on any basis including custody or profit sharing;

“licence” means any licence issued under the Act;

“Minister” means the Minister to whom responsibility for the subject of finance is
assigned;

“money-changer” means any body corporate licensed as such under this Act to carry
on solely the business of -

(a) buying and selling of foreign currency notes, coins and travellers’
cheques;
9
 (b) replacement of lost or stolen travellers’ cheques; and

(c) encashment under credit cards;

“money or value transfer service” means a financial service that accepts cash,
cheques, other monetary instruments or other stores of value in one location and pays
a corresponding sum in cash or other form to a beneficiary in another location, by
means of a communication, message, transfer or through a clearing network to which
the money or value transfer service belongs, and where the transaction performed by
such service can involve one or more intermediaries and a third party final payment;

“non-bank deposit taking institution” means an institution other than a bank that has
been authorised by the central bank to conduct deposit taking business;

“notice” means notice given in writing;

“Ombudsperson for Financial Services” has the same meaning as in the

Ombudsperson for Financial Services Act 2018;

“place of business”, in relation to a bank, includes its head or main office, a branch,
an agency, a representative office, a mobile branch, an office established and
maintained for a limited period and any other place used by the bank for the
dispensing or acceptance of money on account or for the conduct of other banking
business;

“private banking business” means the business of offering banking and financial
services and products to high-net-worth customers, including but not limited to an all-
inclusive money-management relationship;

“regtech” or “regulatory technology” means the innovative technology solutions

utilised by financial institutions and other regulated entities to facilitate compliance
with regulatory rules and requirements;

“regulatory sandbox” means a controlled testing environment which allows a financial

institution, a licensee under the National Payment Systems Act or a body corporate
authorised by the central bank under section 11C to conduct experiments under the
supervision of the central bank;

“regulatory sandbox authorisation” means an authorisation granted under section 11C

which allows a financial institution, a licensee under the National Payment Systems
Act or a body corporate to enter a regulatory sandbox to experiment with fintech,
regtech or other innovation driven financial services falling under the purview of the
central bank;

“related party” in relation to a financial institution means-

(a) a person who has significant interest in the financial institution or the
financial institution has significant interest in, or controls, the person;
(b) a director or senior officer of the financial institution or of a body
corporate that controls the financial institution or of a body corporate
which the financial institution controls;

10
 (c) the spouse, a child, the parent or ascendant or descendant of a natural
person covered in paragraphs (a) and (b);
(d) an entity that is controlled by a person described in paragraphs (a) to
(c); or
(e) a person or class of persons who has been designated by the central
bank as a related party because of its past or present interest in or
relationship with the financial institution being such that it might be
reasonably expected to affect the exercise of best judgment of the
financial institution in respect of a transaction;

“Reserve Account” means the account specified in section 21;

“senior officer” of a financial institution means -

(a) the chief executive officer, deputy chief executive officer, chief
operating officer, chief financial officer, secretary, treasurer, chief
internal auditor or manager of a significant business unit of the
financial institution; or
(b) a person with similar position and responsibilities as a person in
paragraph (a);

“significant interest” means –

(a) owning, directly or indirectly, alone or together with a related party, or

otherwise having a beneficial interest amounting to, 10 per cent or
more of the capital or of the voting rights of a financial institution;

(b) having the ability, directly or indirectly, alone or together with a

related party or the power, to appoint 20 per cent or more of the
members of the board of a financial institution; or;

(c) directly or indirectly exercising a significant influence over the

management of a financial institution as the central bank may
determine;

“specialised financial institution” means an institution holding a specialised financial

institution licence;

“specialised financial institution licence” means a licence issued under section

11B(4);

“stated capital” has the same meaning as in the Companies Act 2001;

“subsidiary” has the same meaning as in the Companies Act 2001;

“time liabilities” means all deposits, including savings deposits, which are not payable
on demand;

“unsecured advance” or “unsecured credit” means -

(a) any advance or credit, as the case may be, made without security; or

11
 (b) in relation to any advance or credit made with security -

(i) any part thereof which at any time exceeds the market value of
the assets constituting the security; or

(ii) where the central bank is satisfied that there is no established

market value, the unsecured value as determined on the basis of
a valuation proposed by the interested party and approved by
the central bank.

3. Application of the Act

(1) This Act shall be the charter of, and shall apply to, each financial institution
licensed under this Act.

(2) The Development Bank of Mauritius Ltd shall be deemed to be licensed under
this Act and shall, subject to such terms and conditions as the central bank may determine,
taking into account the developmental nature of its activities, be governed by this Act.

(3) Where a bank is also engaged in any of the financial services other than
banking business regulated by the Financial Services Act 2007, the bank shall not carry on
business by virtue of its banking licence unless it is also licensed under that Act in respect of
those financial services.

(4) Every bank licensed under this Act shall be deemed to be licensed to carry on
Islamic banking business through a window on such terms and conditions as the central bank
may determine.

(5) Any bank licensed to conduct Islamic banking business shall be governed by
the provisions of this Act.

(6) (a) No non-bank deposit taking institution licensed under this Act shall
engage in the business of accepting Islamic deposits without an
appropriate licence to that effect issued by the central bank.

(b) Any non-bank deposit taking institution licensed to accept Islamic

deposits shall be governed by this Act.

(7) Any ultimate and intermediate financial holding company, incorporated in

Mauritius, which has, within the group, at least one subsidiary or joint venture or such other
ownership structure, as the central bank may determine, which is a bank or a non-bank
deposit taking institution shall comply with such prudential requirements as the central bank
may, by guidelines, instructions or directives, specify.

(8) In the event of any conflict or inconsistency between any provision of Part XI
and any other enactment, other than sections 110A and 110B of the Insurance Act, the
provisions of Part XI shall prevail.

12
 PART II - LICENSING OF BANKS AND OTHER FINANCIAL INSTITUTIONS

4. Restriction on use of word “bank”

(1) Except as otherwise provided for in this Act, no person, other than a bank,
shall use the word “bank” or any of its derivatives in any language in the description or title
under which that person is carrying on business in Mauritius, or make any such
representation in any billhead, letter, paper, notice, advertisement or in any other manner
whatsoever.

(2) Subject to subsection (3), no person, other than a bank, shall be incorporated
or registered under the Companies Act 2001 using a name or title, and no person other than a
bank shall change its name to a name or title, that includes the word “bank” or any of its
derivatives in any language.

(3) Nothing in this section shall apply to -

(a) any institution established under any other enactment;

(aa) a specialised financial institution;

(b) any body whether incorporated or not, that is formed or registered in

any country, other than Mauritius, under a name or title that includes
the word “bank” or any of its derivatives which is authorised by the
central bank to use such word or its derivatives in connection with the
establishment or operation of a bank or a representative office in
Mauritius;

(c) any subsidiary of a licensed bank which is authorised by the central

bank to use the word “bank” or any of its derivatives; and

(d) an association of banks or bank employees, formed for the protection

of their common interest.

(4) Notwithstanding subsection (1), the central bank may, on such terms and
conditions as it thinks fit, authorise the holding company of a bank which has submitted an
application for a transfer of its undertaking or has been required by the central bank to
restructure its business under section 32A, to use the word “bank” or any of its derivatives in
any language.

5. Application for banking licence

(1) No person shall engage in banking business, Islamic banking business, digital
banking business or private banking business in Mauritius without a banking licence issued
by the central bank.

(2) Subject to section 12, no person, other than a bank licensed by the central
bank, shall engage in receiving deposits or Islamic deposits from the public.

(3) Any body corporate may apply to the central bank for a banking licence.

13
 (4) Every application for a banking licence shall be made in such medium and in
such form as the central bank may determine and shall be accompanied by -

(a) a copy of the certificate of incorporation of the applicant;

(b) in the case of a foreign bank wishing to establish a branch, subsidiary

or joint venture in Mauritius, by a written confirmation from the
banking supervisory authority in the applicant’s country of
incorporation that the supervisory authority has no objection to the
applicant’s proposal to carry on banking business in Mauritius;

(c) a copy of the constitution of the applicant;

(d) a certified list of the full names and address of the directors, beneficial
owners, chief executive officer and other senior officers of the
applicant and a list of its shareholders owning 10 per cent or more of
its shares;

(e) a copy of the financial statements of the applicant, as of a date within

60 days preceding the date of application;

(f) a business plan giving the nature of the planned business,

organisational structure and internal control, projected financial
statements including cash flow statements for each of the next 3
financial years;

(g) in respect of the directors, beneficial owners, chief executive officer,

other senior officers and shareholders holding a significant interest, of
the applicant, an identification and a certificate of good conduct, in
such form as may be specified by the central bank, from a competent
authority or an affidavit duly sworn stating any convictions for crimes
and any past or present involvement in a managerial function in a body
corporate subject to insolvency proceedings or having declared
personal bankruptcy;

(h) payment of the appropriate non-refundable processing fee as may be

determined by the central bank by regulations made by the central
bank, with the approval of the Minister; and

(i) such other information or document as the central bank may specify in
the form of application.

(5) The documents specified under subsection (4)(a), (b) and (c) shall be
authenticated copies, and where the originals are not in English language, certified
translations in English.

(6) Where a shareholder of the applicant is a body corporate, the application shall,
in addition, be accompanied by the information required under subsection (4) that may be
relevant and applicable to the body corporate.

(7) The central bank shall, within 30 days of the receipt of an application under
subsection (4), notify the applicant in writing whether or not the application is complete.
14
 (8) Where the application under subsection (4) is not complete, the central bank
shall, subject to subsection (8A), immediately after the expiry of the delay of 30 days
specified in subsection (7), call for such supplementary information or documents as it may
require for the purpose of determining the application.

(8A) (a) Where the information or documents, other than those specified in
subsection (4)(a), (c), (d) or (g), in so far as the information or documents relate to proposed
directors, chief executive officer and other senior officers, are submitted to the central bank
and the central bank is satisfied that the applicant is eligible for a licence, the central bank
may, subject to such terms and conditions as it may determine, grant an in-principle approval
to the applicant.

(b) An in-principle approval granted under paragraph (a) shall –

(i) not be construed by the applicant as an authorisation to conduct

banking business;

(ii) not create any legitimate expectation for a positive final

determination of the application; and

(iii) automatically lapse if the applicant does not satisfy the terms
and conditions attached to the in-principle approval.

(8B) An applicant shall notify the central bank of any material change which may
have occurred, before or after the issue of a licence, in the information provided in the
application.

(8C) An application shall include an authority from the applicant authorising any
regulatory body, law enforcement body or financial institution, in Mauritius or in a foreign
country, to release to the central bank, for use in relation to the application and the
enforcement of this Act, any information about the applicant, and any of its directors,
shareholders, beneficial owners, chief executive officer or other senior officers as may be
applicable.

(8D) Where the applicant is not an individual, such an authority shall be given by
each of the directors of the applicant or by 2 directors duly authorised by a resolution of the
board of directors.

(9) An application under this section may be withdrawn by notice to the central
bank at any time before it is determined.

(10) In this section –

“beneficial owner” –

(a) means the natural person who ultimately owns or controls the applicant
or the natural person on whose behalf the application is being made;
and

(b) includes the natural person who exercises ultimate effective control
over the applicant.

15
6. Determination of application
(1) The central bank may, on an application duly made in accordance with section
5 and after being provided with all such information and documents as it may require under
that section, determine the application.
(2) The central bank shall give notice of its determination to the applicant under
subsection (1), within 60 working days of receipt of a complete application under section
5(4), or of the supply of any supplementary information called for by the central bank under
section 5(8), as the case may be.

7. Grant or refusal to grant banking licence

(1) The central bank may, following its determination of an application under
section 5, grant or refuse the application.

(2) No banking licence shall be granted by the central bank unless it is satisfied -

(a) that the applicant has -

(i) demonstrated that the directors or senior officers of the

applicant have technical knowledge, experience in banking or
finance and are fit and proper persons to carry on the proposed
banking business;

(ii) sufficient financial resources and an adequate capital structure

to serve as a continuing source of financial support for the
proposed bank;

(iii) demonstrated the soundness and feasibility of the applicant’s

plans for the future conduct and development of the business of
the proposed bank, including accounting and internal control
systems ;

(iv) the ability and willingness to comply with such other

conditions as the central bank may impose under the banking
laws;

(b) as to the history and character of the business and management of the
applicant;

(c) as to the convenience and needs of the community or market to be

served;

(d) as to the fitness and suitability of the applicant’s shareholders,

particularly shareholders holding a significant interest; and

(e) where the applicant forms part of a group predominantly engaged in

banking activities, that the corporate structure of the group or its
geographical location or the banking law in the home country of the
group does not hinder effective consolidated supervision.

16
 (3) Where the applicant is the branch or a subsidiary of a bank incorporated
abroad and is making an application either singly or in joint venture with a bank incorporated
in Mauritius, the central bank shall satisfy itself that the bank incorporated abroad is a
reputable international bank, having operated as a bank in the jurisdiction of its head office
for at least 5 years, and is subject to consolidated supervision by competent foreign
regulatory authorities.

(4) The central bank may refuse to grant a banking licence where the applicant
intends to operate under a name which -

(a) so resembles that of an existing financial institution in Mauritius or

elsewhere as to be likely to mislead the public;

(b) is calculated to suggest falsely a connection with a person or authority

outside Mauritius;

(c) is calculated to suggest falsely a special status in relation to the

Government of Mauritius, any foreign Government or any public body
in or outside Mauritius, or that the applicant enjoys the official support
or patronage thereof.

(4A) (a) The central bank shall refuse to grant a banking licence to an applicant
which has no physical presence in the country in which it is
incorporated and licensed, and which is unaffiliated with a regulated
financial group which is subject to effective consolidated supervision.

(b) In this subsection –

“physical presence” –

(a) means management located within the country in which the

financial institution is incorporated and licensed; but

(b) does not include the presence in Mauritius of a local agent or

staff below management level.

(5) Where the central bank grants a banking licence, it shall notify the applicant in
writing within 7 days of its decision, and shall, upon payment of the annual licence fee, issue
a banking licence to the applicant.

(6) A banking licence granted under subsection (5) –

(a) shall specify the name of the licensee; and

(b) shall be subject to such conditions as the central bank may impose.

(7) Subject to section 50(1), no bank shall carry on banking business in any
branch, office or place of business, other than its principal place of business, unless the bank
has obtained the prior approval of the central bank.

17
 (7A) No bank shall contract the services of an entity to provide its services on its
behalf or enter into any agency agreement for that purpose, without –

(a) the prior written approval of the central bank; and

(b) payment of such appropriate non-refundable processing fee and annual

licence fee as may be prescribed by the central bank with the approval
of the Minister.

(7B) An approval under subsection (7A)(a) may be granted subject to such terms
and conditions as the central bank may impose.

(7C) Sections 10 and 11 shall apply to an approval granted under subsection

(7A)(a).

(7D) A bank which has been granted a banking licence to carry on exclusively
private banking business by the central bank may –

(a) (i) be exempted from such provisions of this Act;

(ii) be subject to such terms and conditions and guidelines,

as the central bank may determine;

(b) be authorised to –

(i) hold, store or sell gold, silver, platinum, and other precious
metals, as part of the management of its client’s investment
portfolio;

(iv) provide safety vault services to its clients for gold, silver,
platinum, precious and semi-precious stones, precious metals,
pearls, works of art and collectors’ pieces or antiques and such
other high value goods as the central bank may determine.

(7E) A bank which has been granted a banking licence by the central bank to carry
on exclusively digital banking business may –

(a) be exempted from such provisions of this Act;

(b) be subject to such terms and conditions and guidelines as the central
bank may determine.

(8) No bank shall open or keep open a new place of business or close or keep
closed an existing place of business, or change the location of its business, without the
approval of the central bank.

(9) No bank shall be engaged in any business other than the business specified in
the licence granted to it under this section.

(10) A banking licence granted under this section shall not de facto or de jure be
transferable without the prior approval of the central bank.

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8. Licence fees

The holder of a licence shall pay to the central bank such annual licence fee as may be
determined by the central bank by regulations made by the central bank, with the approval of
the Minister.

9. Display of banking licence

(1) Every bank shall at all times display, in a conspicuous place in the public part
of its principal place of business, the licence granted to it under this Part and an authenticated
copy of the licence shall be displayed in each branch or office of the bank.

(2) Notwithstanding subsection (1), a bank may, with the approval of the central
bank, display at its principal place of business an authenticated copy of the licence granted to
it under this Part, in such form and manner as the central bank may approve.

10. Power to vary conditions of banking licence

(1) The central bank may, at any time, amend, vary or cancel any condition
attached to, or impose new conditions on, the licence of a bank.

(2) Where the central bank proposes to act under subsection (1), it shall notify the
bank in writing thereof.

(3) The bank may, within 7 days of receipt of a notice under subsection (2), make
representations in writing to the central bank.

(4) The central bank shall, after considering any representations made under
subsection (3), take a decision on the action proposed in the notice and notify the bank in
writing within 7 days of its decision.

11. Revocation, suspension and surrender of banking licence

(1) Subject to the other provisions of this section, the central bank may revoke a
banking licence issued under this Act where the bank -

(a) fails to commence business within a period of 12 months from the date
the licence is issued;

(b) is carrying on business in a manner which is contrary or detrimental to

the interests of its depositors or the public;

(c) has insufficient assets to cover its liabilities to its depositors or the
public;

(d) fails to comply with any directive or instruction issued by the central
bank under the banking laws;

(e) contravenes any provision of the banking laws;

(f) has been convicted by a court in Mauritius, a court of the

Commonwealth or a court of such other countries as may be
prescribed, of an offence under any enactment relating to anti-money

19
 laundering or prevention of terrorism or the use, laundering in any
manner, of proceeds or funding of terrorist activities or other illegal
activities or is the affiliate or subsidiary or parent company of a
financial institution which has so been convicted, provided the
conviction is a final conviction;

(g) ceases to carry on banking business;

(h) goes into receivership or liquidation, is wound up or otherwise

dissolved;

(i) in the case of a branch of a bank incorporated abroad, such bank has
lost its banking licence in the jurisdiction where its head office is
located;

(j) no longer has a physical presence in the country in which it is

incorporated and licensed; or

(k) is unaffiliated with a regulated financial group which is subject to

effective consolidated supervision.

(2) Subject to subsection (3), where the central bank decides to revoke a banking
licence, it shall serve on the bank a notice of its decision to do so, specifying a date, which
shall be not less than 30 days of the date of the notice, on which the revocation shall take
effect.

(3) The central bank may, where subsection (1)(h) applies, revoke the banking
licence forthwith without being required to serve the notice under subsection (2).

(4) The bank may, within 14 days of service of a notice under subsection (2),
make representations to the central bank.

(5) The central bank shall, after considering any representations made under
subsection (4), take a final decision on the revocation and shall notify the bank in writing of
its decision.

(6) Where the banking licence of a company is revoked, the banking laws shall
continue to apply to the banking business of that company, to such extent as the central bank
may direct.

(6A) (a) Without prejudice to subsection (1), where a bank fails to comply with
the provisions of this Act or any condition attached to its banking licence, the central bank
may, by notice in writing to the bank, suspend its banking licence for such period and subject
to such terms and conditions as it may specify.

(b) The central bank shall, in the notice issued under paragraph (a), specify
the deficiencies which the bank ought to address.

(c) Before suspending a licence under this section, the central bank shall –

(i) give a bank not less than 14 days’ notice in writing;

20
 (ii) after considering any representations made to it in writing by
the bank, take a final decision on the suspension of the banking
licence; and

(iii) notify the bank in writing of its decision.

(d) Where the banking licence of a bank is suspended, the banking laws
shall continue to apply to the banking business of that bank.

(e) Where a bank fails to remedy the deficiencies specified in the notice
issued under paragraph (a), the central bank may revoke the banking licence of that bank
under subsection (1).

(7) A bank may, with the prior permission of the central bank and subject to such
conditions as may be specified by the central bank, surrender its licence at any time.

(8) The central bank may, before or after the revocation or surrender of a banking
licence, make such inquiry and give such directions as it thinks fit, so as to ensure that the
interests of depositors and of the public are preserved.

(9) Where a banking licence is revoked or surrendered under this section, the
central bank shall give public notice thereof in the Gazette and in at least 3 daily newspapers
in wide circulation in Mauritius.

11A. Representative office of foreign bank

(1) No foreign bank shall –

(a) set up a representative office in Mauritius unless it has obtained the

prior written approval of the central bank; or

(b) subject to subsection (2), carry on in Mauritius, through its

representative office, any activity regulated under this Act.

(2) A foreign bank may not, through its representative office, carry on any activity
other than an activity specified by the central bank.

(3) (a) An application to set up a representative office shall be made in writing

to the central bank and be accompanied by such document or information as the central bank
may require and on payment of such non-refundable processing fee as may be prescribed by
the central bank with the approval of the Minister.

(b) The central bank may approve the application, with or without
conditions, or reject the application.

(c) Where the central bank approves an application, it shall notify the
foreign bank in writing and, on payment of such appropriate annual licence fee as may be
prescribed by the central bank with the approval of the Minister, it shall issue the
authorisation to open a representative office in Mauritius to the foreign bank.

(4) The central bank may, at any time in writing, amend or revoke any conditions
under which an approval was granted under subsection (3)(b) or impose new conditions.
21
 (5) The central bank may revoke an approval granted under subsection (3)(b)
where –
(a) the representative office –

(i) contravenes any of the banking laws; or

(ii) fails to comply with any condition imposed pursuant to the

approval;

(b) the representative office contravenes any other enactment in or outside

Mauritius; or

(c) in its opinion, it is in the public interest to do so.

(6) Any person who contravenes subsection (1) or (2) or fails to comply with any
condition imposed under subsection (3)(b) or (4) shall commit an offence and shall, on
conviction, be liable to a fine not exceeding 5 million rupees and to imprisonment for a term
not exceeding 10 years.

(7) (a) The central bank may cause an inspection of the operations and affairs
of a representative office to be made by its officers or such other duly qualified person as it
may appoint, so as to assess whether the representative office is complying with the banking
laws and any directives, guidelines or instructions issued by the central bank.

(b) Where the central bank appoints a duly qualified person to conduct an
inspection under paragraph (a), the costs incurred in that connection may be recovered, in
whole or in part, by the central bank by deduction from any balance of, or money owing to,
the foreign bank, as if it were a civil debt.

11B. Licensing of specialised financial institution

(1) A body corporate set up for the purpose of facilitating the economic
development of Mauritius may apply, in such form and manner as the central bank may
determine, for a specialised financial institution licence.

(2) An application under subsection (1) shall be accompanied by such information

as the central bank may determine.

(3) The central bank shall, within 60 working days of the receipt of an application,
or the supply of any additional information or document, whichever is the later, determine
whether to grant or refuse the application and inform the applicant within 7 days of its
determination.

(4) Where the central bank grants an application under this section, it shall, on
payment of such licence fee as may be prescribed, issue a specialised financial institution
licence to the applicant.

22
 (5) Every specialised financial institution licence shall –
(a) specify the name of the licensee; and

(b) be subject to such terms and conditions as the central bank may
impose.

(6) Every specialised financial institution shall comply with such prudential
requirements as the central bank may specify.

(7) The central bank may, by guidelines, instructions or directives, require a

specialised financial institution to comply with such specific provision of this Act as it
considers appropriate, to ensure effective supervision of the institution.

(8) The central bank may cause an inspection of the operations and affairs of a
specialised financial institution to be made by its officers or such other duly qualified person
as it may appoint, so as to assess whether the specialised financial institution is complying
with the banking laws and any guidelines, instructions or directives issued by the central
bank.

(9) Any person who contravenes this section shall commit an offence and shall,
on conviction, be liable to a fine not exceeding one million rupees and to imprisonment for a
term not exceeding 5 years.

11C. Regulatory sandbox authorisation

(1) A financial institution, a licensee under the National Payment Systems Act or
a body corporate may apply to the central bank for a regulatory sandbox authorisation in such
form and manner, and shall be accompanied by such documents, as the central bank may
determine.

(2) The central bank may, on receipt of an application under subsection (1), grant
a regulatory sandbox authorisation where it is satisfied that the applicant meets such
requirements, including eligibility criteria, as the central bank may determine.

(3) Where the central bank grants an application under subsection (2), it may issue
a regulatory sandbox authorisation –

(a) for a specified period; and

(b) subject to such terms and conditions, including appropriate safeguards

to contain the consequences of failure and maintain the overall safety
and soundness of the financial system, as it may determine.

(4) (a) The central bank may, in such circumstances as may be prescribed,
exempt a person who has obtained a regulatory sandbox authorisation from any regulatory
requirement.

(b) An exemption under paragraph (a) shall be specified in the regulatory

sandbox authorisation.

23
 (5) (a) The regulatory sandbox authorisation shall lapse on the expiry of the
specified period referred to in subsection (3)(a).

(b) The holder of a regulatory sandbox authorisation who intends to renew

the regulatory sandbox authorisation shall make a written application to the central bank.

(c) On receipt of an application under paragraph (b), the central bank may
renew a regulatory sandbox authorisation for such specified period and on such conditions as
it may determine.

(6) Upon the central bank being satisfied of the successful experimentation of
fintech, regtech or such other relevant innovation driven financial service, as the case may be,
the holder of a regulatory sandbox authorisation may submit an application to the central
bank for the relevant licence or authorisation under the Banking Act or the National Payment
Systems Act.

(7) The central bank may cause an examination of the operations and affairs of a
holder of a regulatory sandbox authorisation to be made by its officers or such other duly
qualified person as it may appoint so as to assess compliance of the holder of the regulatory
sandbox authorisation with the terms and conditions of the authorisation or any guidelines,
instructions or directives issued by the central bank under this section.

(8) Sections 10, 11 and 17 shall apply to the holder of a regulatory sandbox
authorisation granted under this section.

11D. Establishment of fintech innovation hub and digital lab

(1) The central bank may establish a fintech innovation hub and digital lab –

(a) to foster innovation and the use of emerging technologies to facilitate

the provision of banking and payment solutions and other related
services falling under the purview of the central bank;
(b) to identify critical trends in technology affecting the banking and
payment services sectors and develop in-depth insights into these
technologies;

(c) to provide a testing environment for fintech to develop, test, prototype

and operate products or services;

(d) to establish an international networking platform for experts on

innovative technologies related to the banking and payment services
sectors to promote research, exchange of views and knowledge-
sharing; and

(e) for such other purposes as the central bank may determine.

(2) The central bank shall determine the requirements for a person to enter,
participate or operate in the fintech innovation hub and digital lab.

24
 (3) Any person who enters, participates or operates in the fintech innovation hub
and digital lab shall comply with such terms and conditions as the central bank may
determine.

(4) The central bank may seek the collaboration of any financial institution, or
public or private sector agency for the establishment of the fintech innovation hub and digital
lab.

12. Licensing of deposit taking business

(1) No person other than a non-bank deposit taking institution in operation at the
coming into force of this Act shall carry on deposit taking business in Mauritius.

(2) Every non-bank deposit taking institution in operation at the coming into force
of this Act, shall take out a licence of deposit taking business granted by the central bank.

(3) The licence under subsection (2) shall be granted on such terms and conditions
as the central bank deems appropriate.

(4) Where the central bank grants a licence under this section, it shall notify the
applicant thereof in writing and upon payment of the appropriate annual licence fee as may
be prescribed by regulations made by the central bank, with the approval of the Minister, the
central bank shall issue the licence.

(5) A non-bank deposit taking institution shall be subject to the same prudential
regulation as a bank, including the provisions of Part III, Part IV, Part V and Part VI and any
directives, guidelines and instructions issued thereunder and the existing terms and conditions
of non-bank deposit taking institutions shall stand amended to that effect.

(5A) Notwithstanding section 20, a non-bank deposit taking institution shall

maintain and continue to maintain in Mauritius an amount paid as stated capital of not less
than 200 million rupees or such higher amount as may be prescribed, after deduction of the
accumulated losses of the non-bank deposit taking institution.

(6) The central bank shall encourage proposals to sell or merge the deposit taking
business of an existing non-bank deposit taking institution to -

(a) another non-bank deposit taking institution, with the object of

establishing a bank; or
(b) a bank.

(7) No non-bank deposit-taking institution shall –

(a) be permitted to extend its network of branches; or

(b) close or keep closed a place of business or change the location of its
business,

without the prior written approval of the central bank.

25
13. Licensing of cash dealers

(1) No person shall, subject to subsection (2), engage in the business of cash
dealer in Mauritius without an appropriate licence granted by the central bank.

(2) No person, other than a company, shall be granted a licence under section 14.

(3) No person, other than a bank, shall engage in foreign exchange business in
Mauritius without a foreign exchange dealer licence issued by the central bank or in money-
changer business in Mauritius without a money-changer licence issued by the central bank.

14. Granting of licences to cash dealers

(1) Any body corporate desirous of carrying on business of cash dealer in

Mauritius shall, before commencing any such business, apply to the central bank for a foreign
exchange dealer licence or a money-changer licence, as the case may be.

(2) Any application under subsection (1) shall be made in such medium and in
such form as the central bank may determine and shall be accompanied by -

(a) such information or document as may be required for the purposes of

determining the application; and

(b) payment of the appropriate non-refundable processing fee as may be

prescribed by regulations made by the central bank, with the approval
of the Minister.

(3) The central bank may request the applicant to furnish such additional
information or document as it may require to process the application.

(4) The central bank shall, within 30 days of the receipt of the application, or the
supply of any additional information or document requested under subsection (3), determine
whether to grant or refuse the application and inform the applicant within 7 days of its
decision.

(5) Where the central bank determines to grant a licence under this section, it
shall, upon payment of the annual licence fee as may be prescribed by regulations made by
the central bank, with the approval of the Minister, issue the licence on such terms and
conditions as it may deem fit to impose.

(6) The central bank shall, when granting a foreign exchange dealer licence or a
money-changer licence under this section, comply with section 7(2), (4) and (4A) with such
modifications, adaptations and exceptions as may be necessary.

14A. Licensing of credit information bureau or recognition of external credit

assessment institution

No person, other than a company, shall engage in the business of credit information
bureau or a recognised external credit assessment institution without an appropriate licence or
recognition, granted by the central bank, as the case may be.

26
14B. Granting of licence to credit information bureau

(1) Any company wishing to carry on the business of credit information bureau
shall apply to the central bank for a credit information bureau licence.

(2) Any application under subsection (1) shall be made in such manner and in
such form as the central bank may determine and shall be accompanied by -

(a) such information or document as may be required by the central bank

for the purposes of determining the application; and

(b) payment of such appropriate non-refundable processing fee as may be

prescribed by the central bank.

(3) The central bank shall, within 30 days of the receipt of an application, or the
supply of any additional information or document, determine whether to grant or refuse the
application and inform the applicant within 7 days of its decision.

(4) Where the central bank decides to grant a licence under this section, it shall, on
payment of such licence fee as may be prescribed, issue the licence on such terms and
conditions as it may consider appropriate.

14C. Recognition of external credit assessment institution

(1) Subject to subsection (2), any institution desirous of being recognised by the
central bank as an external credit assessment institution shall submit an application for
recognition to the central bank in such medium and in such form as the central bank may
determine and shall be accompanied by such information or document as may be required for
the purposes of determining the application.

(2) On the coming into operation of this section, any institution whose ratings
have been authorised by the central bank to be used by banks for capital adequacy purposes
shall be deemed to have been recognised by the central bank under this section.

(3) The central bank may issue guidelines governing external credit assessment
institutions including their recognition, suspension or revocation of their recognition by the
central bank and their use by financial institutions.

14D. Repealed

14E. Granting of licences to issuer of money market instruments

(1) No person shall issue a money market instrument unless the person is an
eligible institution which holds an issuer of money market instrument licence issued by the
central bank.

(2) An eligible institution which intends to issue a money market instrument shall
apply to the central bank for an issuer of money market instrument licence.

27
 (3) An application under subsection (2) shall be made in such form and manner as
the central bank may determine and shall be accompanied by –

(a) such information or document as may be required by the central bank

for the purpose of determining the application; and

(b) payment of such non-refundable processing fee as may be prescribed

by regulations made by the central bank, with the approval of the
Minister.

(4) The central bank may request the applicant to furnish such additional
information or document as it may determine to process the application.

(5) The central bank shall, within 30 days of the date of receipt of an application,
or the supply of any additional information or document requested under subsection (4),
determine whether to grant or refuse the application and inform the applicant within 7 days of
its decision.

(6) Where the central bank determines to grant a licence under this section, it
shall, on payment of such licence fee as may be prescribed by regulations made by the central
bank, with the approval of the Minister, issue the licence on such terms and conditions as it
may determine.

(7) An eligible institution which has been licensed to issue a money market
instrument under this section shall comply with such prudential requirements as the central
bank may, by guidelines, instructions or directives, determine.

(8) In this section –

“eligible institution” means –

(a) a financial institution or a company incorporated or registered under

the Companies Act, having –

(i) at any point in time, not earlier than 12 months prior to the
proposed issue of a money market instrument, net assets of a
total value exceeding 300 million rupees, as certified by its
auditors and reflected in its audited financial statements; and

(ii) Repealed

(iii) a credit rating by a recognised external credit assessment

institution; or

(b) a body established under any enactment and which has the power to
borrow funds under that enactment; or

(c) such other body corporate as the central bank may approve;

28
 “money market instrument” means a secured or an unsecured instrument
having a maturity of not more than 12 months, issued, in certificated or book-
entry form, by an eligible institution in rupees or in such convertible currency
as the central bank may approve.

15. Display of licence

Every person licensed under section 12, 14, 14A, 14B or 14D shall at all times
display, in a conspicuous place at its principal place of business, the licence granted to it and
an authenticated copy of the licence shall be displayed in each branch or office of the cash
dealer or the non-bank deposit taking institution.

16. Variation, revocation and surrender of other licences

Sections 10 and 11 shall apply to a licence granted under section 12, 14, 14A, 14B or 14D.

17. Procedure in cases of urgency

(1) Notwithstanding section 10, 11 or 16, the central bank may, in cases of
urgency and in the public interest -
(a) amend, vary or cancel any condition attached to a licence or impose a
condition on a licence; or
(b) suspend or revoke a licence.

(2) Any amendment, variation, cancellation or imposition of a condition of a

licence or any suspension or revocation of a licence specified in subsection (1) shall be
notified to the financial institution and shall have immediate effect and bind the financial
institution accordingly.

(3) The financial institution may, within 7 days of the notification under
subsection (2), make representations to the central bank.

(4) The central bank shall, within 14 days of any representations made under
subsection (3) and after considering those representations, notify the financial institution of
its final decision.

(5) Where a licence is revoked under this section, the central bank shall give
public notice in the Gazette and in at least 3 daily newspapers in wide circulation in
Mauritius.

18. Limitations on management and remuneration

(1) No financial institution incorporated in Mauritius shall be managed by any

person other than the persons on its board of directors or by any person other than persons
appointed by the board of directors.

(2) Any branch of a foreign financial institution shall be managed by persons

appointed by the parent financial institution, which appointment shall be subject to the
approval of the central bank.

29
 (3) Subject to subsection (4), no financial institution incorporated in Mauritius
shall have a board of directors consisting of fewer than -

(a) 5 natural persons; and

(b) 40 per cent independent directors.

(4) The central bank may -

(a) having regard to the size, complexity and ownership of a bank or non-
bank deposit taking institution, require the bank or non-bank deposit
taking institution to have more than 40 per cent independent directors
and the appointment of any such additional director or directors shall
be subject to the prior approval of the central bank;

(b) having regard to the scope of the activities undertaken by a financial

institution, require that its board of directors be composed of such
higher number of persons or, where the financial institution is a
subsidiary or an associate of a foreign banking group of companies, of
40 per cent non-executive directors instead of 40 per cent independent
directors, as the central bank may direct; and

(c) in the case of a cash dealer, require that its board of directors be
composed of such lower number of persons as the central bank may
direct.

(5) No financial institution shall employ any person whose remuneration is linked
to the income of the financial institution or to the level of activities on customers’ accounts.

(6) Without limiting the generality of subsections (1) and (2), the directors of a
financial institution shall -

(a) establish such committees of the board as the board may deem
necessary to discharge its responsibilities effectively;

(b) establish such procedures as may be necessary to resolve conflicts of

interest, including techniques for the identification of potential conflict
situations and for restricting the use of confidential information;

(c) take into account the requirements of the banking laws, establish such
procedures as may be necessary to provide disclosure of information to
customers and other parties having a direct interest in the financial
institution; and

(d) approve major policies of the financial institution, including, as

applicable, investment, lending and risk management policies and
standards and procedures in respect of such policies.

30
 (7) Every director or senior officer of a financial institution shall, in exercising
any of his powers and discharging any of his duties -
(a) act honestly and in good faith and in the best interest of the financial
institution; and

(b) exercise care, diligence and skill that a reasonable and prudent person
would exercise in comparable circumstances.

(8) Every director or senior officer of a financial institution shall comply with the
banking laws, directives, guidelines and instructions issued by the central bank and the
financial institution’s constitution and by-laws.

(8A) Where, in the course of the performance of his duties, a director comes across
transactions or conditions in a financial institution affecting its well-being and he has reason
to believe that –

(a) there has been or there is likely to be a breach of the banking laws or
the Companies Act;

(b) measures to counter the possibility of money laundering or the funding

of terrorist activities in accordance with any enactment have not been
or are not being properly implemented;

(c) directives, guidelines or instructions issued by the central bank have

not been or are not being properly followed;

(d) a criminal offence involving fraud or dishonesty has been, is being or

is likely to be committed;

(e) there may be a conflict of interest or potential conflict of interest; or

(f) any other serious irregularity has occurred or is about to occur,

including any irregularity which is likely to jeopardise the security of
depositors and creditors,

he shall forthwith inform the central bank accordingly.

(8B) Section 54A shall apply to any disclosure made by a director under subsection
(8A).

(9) Every former director or senior officer of a financial institution shall remain
accountable for his obligation to have met the standards of conduct in accordance with
subsection (7) and the compliance requirements of subsection (8) during his term of office.

(10) No provision in any contract or in the constitution of a company or any

resolution of a company shall relieve any director or senior officer from the duty to act in
accordance with the banking laws or from liability for breach thereof.

31
19. Other restrictions

No financial institution shall -

(a) be amalgamated with any other bank or other financial institution except in
accordance with section 32;

(b) cause or permit any person -

(i) to hold any significant interest in any class of shares in its stated
capital, except with the prior approval of the central bank; or

(ii) to acquire, directly or indirectly, any interest in any class of shares in

its stated capital in contravention of section 31;

(c) make, except with the prior approval of the central bank, any alteration to its
constitution or instrument of incorporation; or

(d) with a view to engaging in non-competitive market practices detrimental to

consumers of financial services, make an agreement or arrangement with
another financial institution with respect to -
(i) the rate of interest on a deposit;
(ii) the rate of interest or the charges on a loan or other forms of credit;
(iii) the amount or kind of any charge for a service provided to a customer;
(iv) the amount or kind of credit to a customer;
(v) the kind of service to be provided to a customer, or
(vi) the classes of persons to whom a loan or other service will be made or
provided or from whom a loan or other service will be withheld.

PART III - CAPITAL STRUCTURE, RESERVE ACCOUNT

AND OTHER FINANCIAL PROVISIONS

20. Minimum capital requirements of banks

(1) The central bank shall not grant, and no bank shall hold, a banking licence
unless it maintains and continues to maintain in Mauritius, an amount paid as stated capital or
an amount of assigned capital of not less than 400 million rupees or the equivalent amount in
any freely convertible currency held in assets in or outside Mauritius, as may be approved by
the central bank or such higher amount as may be prescribed, after deduction of the
accumulated losses of the bank.

(2) Every bank shall maintain, in Mauritius, capital of such percentage or ratio as
may be determined by the central bank, of such of that bank’s risk assets and of other types of
risks, as may be specified by the central bank, the basis of computation, including the
definition of capital and risk assets and other types of risks, being specified by the central
bank.

(3) Repealed

32
 (4) In determining the percentage or ratio specified in subsection (2) for different
banks, the central bank shall have regard to -

(a) the nature, scale and risks of the bank’s operations;

(b) other financial resources available to the bank; and

(c) the amount and nature of capital required, in the central bank’s
opinion, to protect the interests of depositors and potential depositors
and the public.

(5) Notwithstanding subsection (2), in the case of a bank in receivership or in an

action contemplated under Part IX of this Act, the central bank may temporarily set a
different percentage or ratio.

21. Maintenance of Reserve Account of banks

(1) Subject to subsection (2), every bank shall maintain a Reserve Account and
shall transfer each year to the Reserve Account out of the net profits of that year, after due
provision has been made for income tax, a sum equal to not less than 15 per cent of the net
profits until the balance in the Reserve Account is equal to -

(a) in the case of a bank incorporated in Mauritius, the amount paid as

stated capital;

(b) in the case of a bank incorporated outside Mauritius and having a

branch in Mauritius, the amount of its assigned capital.

(2) Where a bank makes a loss, the net loss shall be set off against any profit
made in subsequent years until a position of net cumulative profit is reached and the transfer
to the Reserve Account specified in subsection (1) shall be calculated and made on the net
position.

(3) No profit shall be transferred and no dividend shall be declared unless the
transfer specified in subsection (1) has been made, but the central bank may, where it
considers the balance held in the Reserve Account of the bank to be adequate, declare, by
order in writing directed to the bank, that subsection (1) shall not apply to that bank for such
period and subject to such conditions as may be specified in the order.

22. Liquid assets of banks

(1) Every bank shall maintain in Mauritius, adequate and appropriate forms of
liquidity and comply with any guidelines or instructions issued by the central bank in relation
thereto.
(2) The level of liquidity to be maintained by a bank may be expressed as a
percentage of such of that bank's deposits and other liabilities, including contingent liabilities,
as may be determined by the central bank, averaged on a basis to be fixed by the central bank.

(3) Notwithstanding any guidelines or instructions issued under subsection (1), the
central bank may, by order in writing, direct a bank to provide additional liquidity in such
form and amounts and within such time frame as may be determined by the central bank.

33
 (4) In determining the additional liquidity referred to in subsection (3), the central
bank shall in each case have regard to -

(a) the nature, scale and risks of the bank's operations;

(b) other financial resources available to the bank;

(c) the relationship between the bank's liquid assets and its actual or
contingent liabilities;

(d) the times at which the liabilities shall or may fall due and the assets
mature.

(5) For the purposes of this section, “liquid assets” includes cash, balances with
banks in Mauritius, balances with the central bank, balances with foreign banks and freely
tradable securities denominated in freely convertible currencies as may be specified by the
central bank and notified to the bank, Bank of Mauritius Bills, Government securities and
such other assets, of such classes and maturities and for such other aggregate figures, as may
be specified by the central bank and notified to the bank.

23. Failure to maintain minimum holdings

(1) Every bank shall furnish, within a reasonable time and in any event not later
than 7 days from the date of a request to that effect made by the central bank, such
information as may be required by the central bank to indicate whether the bank has complied
with section 22.

(2) No bank shall -

(a) allow its holding of liquid assets to be less than the percentage, level or
proportion which is determined by the central bank under section 22;

(b) grant or permit, for the period during which liquid assets are less than
the percentage level or proportion determined by the central bank
under section 22, any increase in its outstanding loans, overdrafts or
investments.

24. Minimum capital requirements

(1) Every cash dealer shall, at all times, maintain in Mauritius such amount paid
as stated capital as may be approved by the central bank or such higher amount as may be
prescribed, after deduction of accumulated losses of the cash dealer.

(2) No cash dealer shall declare, credit or pay any dividend or make any other
transfer from profits until -

(a) its minimum capital requirement has been met;

(b) adequate provision has been made for existing or contingent liabilities.

34
25. Minimum liquid assets of foreign exchange dealers

Every foreign exchange dealer shall at all times maintain such minimum liquid assets,
equivalent to not less than 10 per cent of its liabilities, as may be determined by the central
bank.

26. Other prudential requirements

(1) Sections 7 and 10 of this Act shall apply to any cash dealer.

(2) Every cash dealer shall at all times comply with such other prudential
requirements as may be specified by the central bank.

PART IV - LIMITATIONS ON OPERATIONS

27. Restriction on payment of dividends

(1) Notwithstanding the Companies Act 1984 and Companies Act 2001, no bank
shall declare, credit or pay, or transfer abroad, any dividend or make any other transfer from
profits until -

(a) the central bank is satisfied that the payment of dividend or any other
transfer from profits will not cause the bank to be in contravention of
the capital adequacy requirements of section 20 or liquidity
requirements of section 22, or likely to impair the future capital
adequacy or liquidity of the bank.

(b) any impairment in its amount paid as stated capital or assigned capital
has been made good; and

(c) adequate provision, to the satisfaction of the central bank, has been
made in respect of impaired credits.

(2) For the purposes of this section, an issue of bonus shares out of profits shall be
deemed to be a payment of dividends.

(3) Every bank shall make quarterly reports to the central bank on the matters
specified in subsection (1) in such form and in such manner as may be approved by the
central bank.

28. Limitation on advances or credits

(1) No bank or non-bank deposit taking institution shall -

(a) grant any advance, or credit against the security of its own shares;

(b) grant to, or permit to be outstanding from, its officers or employees

unsecured advances or unsecured credit which, in the aggregate and in
relation to any officer or employee, exceed the annual emoluments of
that officer or employee; or

35
 (c) grant credits to, or permit to be outstanding from, or purchase securities
issued by or the assets of, an affiliate in an amount which exceeds such
maximum limit as may be determined by the central bank.

(2) The central bank may determine the maximum limits of credits and off-
balance sheet commitments, which a bank or non-bank deposit taking institution may grant to
a related party and to all related parties.

(3) Any transaction with any related party involving credit, or off balance sheet
commitments and the acquisition of securities and other assets shall be made on substantially
the same terms, including interest rates and collateral required, as those prevailing at the time
for comparable transactions with other persons and may not involve more than the normal
risk of repayment or present other unusual features.

(4) The central bank may issue guidelines governing related party transactions
including limitation on such transactions, their approval process and their public disclosure.

29. Limitation on concentration of risk

(1) The central bank shall by way of guidelines set out regulatory credit
concentration limits related to the capital base of a bank in respect of –

(a) individual large credit exposure, including off balance sheet

commitments, to any one customer or group of closely-related
customers; and

(b) aggregate amount of large credit exposure to all customers and groups
of closely-related customers.

(2) The central bank may issue instructions to banks clarifying who is deemed a
customer or group of closely-related customers under subsection (1).

(3) Any instructions issued by the central bank shall be in writing and binding on
the banks.

(4) The central bank may exempt from compliance with this section as it deems
fit, the part of a bank’s banking business or investment banking business that is conducted in
currencies other than Mauritius currency.

30. Limitation on investments and non-banking operations

(1) Subject to the other provisions of this section, no financial institution shall,
except in the course of the satisfaction of debts due to it by the default of the debtor -

(a) engage, whether on its own account or on the basis of a commission, in

the wholesale or retail trade, including the import or export trade, or in
any business other than the business for which the financial institution
is licensed under this Act;

(b) acquire or hold any interest in the capital of any financial, commercial,
agricultural, industrial or other undertaking other than in respect of -

36
 (i) a purchase, for the account of a customer and without recourse,
of shares or stock;
(ii) subject to the approval of the central bank, a shareholding in
any undertaking the object of which is to insure deposits or
promote the development of a money or securities market in
Mauritius;
(iii) subject to the approval of the central bank and to subsection
(8), a shareholding in any undertaking the object of which is to
promote the economic development of Mauritius;
(iv) subject to the approval of the central bank, shareholding in any
other undertaking up to an amount which, in the aggregate,
does not exceed 30 per cent of the financial institution’s current
capital base, the shareholding being valued at its fair market
value or, where it is not practicable to determine the fair market
value, at a valuation approved by the central bank;
(v) a shareholding by a bank licensed to conduct Islamic banking
business or that unit of a bank carrying on Islamic banking
business through a window for the purposes of enabling the
bank or that unit to carry on Islamic banking business.

(1A) The central bank may, on application by a financial institution, waive the
requirements under subsection (1)(b).

(2) The central bank may prescribe the classes of investment permitted under
subsection (1)(b)(iii) and the maximum investment that a financial institution may make in it,
provided that such classes shall be so closely related to banking as to be reasonably incidental
thereto.

(3) (a) A bank engaging in factoring, promoting, operating or managing a

collective investment scheme or securities brokerage operations shall
do so only through a subsidiary of the bank and in such a case,
section 3(3) shall apply to a subsidiary as it applies to a bank.

(b) Subject to section 3(3), a bank may engage in the sale of insurance
policies or distribution of collective investment schemes or such other
products as may be approved by the central bank.

(3A) No bank shall engage in the business of providing operating leases.

(3B) (a) Notwithstanding this Act, a financial institution may buy, sell, hold or
manage such pool of assets as the central bank may determine.

(b) Any financial institution proposing to buy, sell, hold or manage a pool
of assets under subparagraph (a) shall –

(i) obtain the prior approval of the central bank;

(ii) comply with such terms and conditions, including such limit on
the value of these assets, as the central bank may determine;
and
37
 (iii) act in accordance with such guidelines or instructions as the
central bank may issue.

(4) A bank licensed under this Act shall not have a significant interest in another
bank in Mauritius.

(5) Subject to subsection (5A), a financial institution shall not purchase or

otherwise acquire any immovable property or any right therein except as may be reasonably
necessary for the purpose of conducting its operations or engaging in financial leasing of
immovable property, including provision for foreseeable expansion, or for providing housing
or other amenities for its staff.

(5A) Subsection (5) shall not apply to a bank licensed to conduct Islamic banking
business or to that unit of a bank carrying on Islamic banking business through a window
which purchases or otherwise acquires immovable property for the purpose of enabling that
bank or that unit to carry on Islamic banking business.

(6) Where a financial institution, in the course of the satisfaction of debts due to it,
acquires any interest in the capital of any undertaking or in any other property, movable or
immovable, by the default of the debtor, it shall dispose of the interest without undue delay.

(7) Notwithstanding subsection (1), a bank may invest an amount not exceeding
10 per cent of its current capital base in shares of companies quoted on the Official List of the
Stock Exchange established under the Stock Exchange Act, subject to any such investment -

(a) not being made by the bank directly or indirectly in its own shares; and

(b) not exceeding, in the aggregate, 5 per cent of the total shareholdings of
any such company.

(8) A bank may for the purpose of participating in the equity capital of enterprises
and subject to such investment not having the effect of impairing such capital adequacy
requirements as may be imposed from time to time pursuant to section 20, set up or
participate in an equity fund approved by the Financial Services Commission established
under the Financial Services Act 2007.

(9) The central bank may exempt a bank, with respect to its banking business or
investment banking business in currencies other than Mauritius currency, from compliance
with subsections (1)(b) and (5) in so far as activities and operations referred to in those
subsections are carried on outside Mauritius and do not involve the acquisition of any interest
in movable or immovable property in Mauritius.

31. Acquisition of interest in a financial institution

(1) No financial institution shall, except as may be approved by the central bank,
cause or permit any person to pledge or sell any of his shares which may, directly or
indirectly, cause any other person to acquire a significant interest in the financial institution.

(2) Any sale or pledge of shares in contravention of subsection (1) shall be

invalid, null and void and cause the person to forfeit all rights pertaining to voting or payment
of dividends.

38
 (3) A person proposing to acquire significant interest under subsection (1) shall
give 30 days prior notice to the central bank of the acquisition, and such notice shall contain -

(a) the name, personal history, business background and experience of

each person by whom or on whose behalf the acquisition is to be made
and shall be accompanied by a certificate of good conduct in respect of
each person from a competent authority or an affidavit duly sworn
stating any convictions for crimes and any past or present involvement
in a managerial function in a body corporate subject to insolvency
proceedings or having declared personal bankruptcy, in respect of each
of the persons;

(b) a statement of the assets and liabilities of each person by whom or on

whose behalf the acquisition is to be made together with a statement of
income and cash flow statement;

(c) the terms and conditions of the proposed acquisition and the manner in
which the acquisition is to be made;

(d) the identity, source and amount of the funds or other consideration
used or to be used in making the acquisition;

(e) any plans or proposals which any acquiring party making the
acquisition may have to liquidate the financial institution, to sell its
assets or merge it with any company or to make any other major
change in its business, corporate structure or management; and

(f) any additional relevant information that the central bank may require.

(4) The central bank shall not approve any proposed acquisition where -

(a) the proposed acquisition would give rise to undue influence or would
result in a monopoly or substantially lessen competition;

(b) the financial condition of any acquiring person might jeopardise the
financial stability of the financial institution or prejudice the interests
of its depositors;

(c) the competence, experience or integrity of any acquiring person, or of

any proposed director, chief executive officer or other senior officer,
indicates that it would not be in the interest of the depositors of the
financial institution or in the interest of the public to permit such
person to acquire significant interest in the financial institution;

(d) the proposed acquisition will not be conducive to the convenience and
needs of the community or market to be served; or

(e) any acquiring person fails to furnish the central bank all the
information that it requires.

(5) Any shares of a financial institution held by a person without approval of the
central bank in subsection (1) shall be null and void and not entitled to any voting rights or
payment of dividends.
39
32. Mergers

(1) No financial institution shall merge or consolidate with any other financial
institution or acquire, either directly or indirectly, the assets of, or assume liability to pay any
deposit made in, any other financial institution except with the prior approval of the central
bank.

(2) Any financial institution which proposes any merger, consolidation,

acquisition or assumption of liability, under subsection (1) shall give 30 days’ prior notice to
the central bank.

(3) On receipt of a notice under subsection (2), the central bank shall take into
consideration the financial and managerial resources and future prospects of the existing and
proposed financial institutions, and the convenience and needs of the public.

(4) The central bank shall not approve a proposed transaction referred to in
subsection (2) where the proposed transaction would result in a monopoly or substantially
lessen competition unless it finds that the anti-competitive effects of the proposed transaction
are clearly outweighed in the public interest by the probable effect of the transaction in
meeting the convenience and needs of the public.

32A. Transfer of undertaking by bank

(1) Subject to subsection (11), where, for the purpose of restructuring its business
or for such other purpose as the central bank may approve, a bank proposes to transfer the
whole or part of its undertaking to –

(a) its parent;

(b) its wholly owned subsidiary;

(c) a wholly owned subsidiary of its parent; or

(d) another financial institution or a specialised financial institution,

it shall apply, in such form and manner as the central bank may determine, to the
central bank for approval and pay such non-refundable processing fee as the central
bank may, with the approval of the Minister, determine.

(2) Notwithstanding subsection (1), the central bank may require a bank to
restructure its business in the manner referred to in subsection (1).

(3) The central bank shall not give its approval pursuant to subsection (1) or
require a bank to restructure its business pursuant to subsection (2), unless it is of the opinion
that it is expedient to do so, having regard to –

(a) its objects and functions under sections 4 and 5 of the Bank of
Mauritius Act;
(b) any systemic risk that the bank may pose;

(c) any incidence which the bank may have on the stability of the financial
system of Mauritius;
40
 (d) the need to further protect the bank’s depositors and the public.

(4) A bank shall –

(a) on making an application under subsection (1), submit to the central

bank, in such form as the central bank may determine, a provisional list
of its assets and liabilities updated as at the day immediately preceding
the date of the application; or

(b) on being required by the central bank to restructure its business under
subsection (2), submit, in such form as the central bank may determine
and within such time as the central bank may specify, a provisional list
of its assets and liabilities updated as at the day immediately preceding
the date of the submission.

(5) Where the central bank gives its approval for a transfer of the whole or part of
the undertaking of a bank or requires the restructuring of a bank under this section –

(a) the central bank shall require the transferor bank to effect the transfer
of the undertaking in accordance with such terms and conditions as the
central bank may determine;

(b) the transferor bank shall comply with such other regulatory
requirements relating to any part of its business under any enactment
and shall submit to the central bank written confirmation of such
compliance;

(c) (i) the transferor bank shall, within 14 days of the approval or
requirement, give written notice to each of its shareholders
informing him of his right to require the transferor bank to
purchase his shares in lieu of being allotted shares in the
transferee bank; and

(ii) where a shareholder intends to exercise his right under

subparagraph (i), he shall, within 28 days of the date of the
notice referred to in that subparagraph, require the transferor
bank to purchase such shares in the manner set out in section
110 of the Companies Act, provided that reference in section
110 of the Companies Act to –

(A) section 109(2)(a) of the Companies Act shall be

construed as reference to this subparagraph;

(B) the 7-day period under section 110(1) of the Companies

Act shall be construed as if that 7-day period were to
run from the expiry of the 28-day period under this
subparagraph; and
(C) the Board of directors, the Board or the company under
section 110 of the Companies Act shall be construed as
reference to the transferor bank.

41
 (5A) The central bank may exempt a transferor bank from complying with
subsection (5)(c), where the central bank is of the view that such compliance may lead to the
impairment of the capital and capital adequacy ratio of the transferor bank, provided that the
transferor bank gives an undertaking to the central bank that it shall give written notice to its
shareholders of the proposed transfer of its business or the restructuring of the bank and
inform them of their right to sell their shares at any time on the market.

(6) Where the central bank is satisfied that the transferor bank has complied with
the terms and conditions referred to in subsection (5)(a) and the applicable requirements of
this section, the central bank shall –

(a) authorise the transfer of the undertaking of the transferor bank;

(b) give public notice of the transfer of the undertaking of the transferor
bank and notice thereof in at least 3 daily newspapers, specifying the
appointed day as the date on which the transfer shall become effective;
and

(c) notify the Registrar of Companies and the transferor bank accordingly.

(7) Where the central bank has authorised the transfer of the undertaking under
subsection (6) –

(a) the undertaking of the transferor bank shall, on the appointed day, be
transferred to the transferee bank in accordance with this section and
the terms and conditions set out in the Third Schedule;

(b) the Registrar of Companies shall issue a Certificate of Transfer of

Undertaking under section 346A of the Companies Act.

(8) The transferee bank shall, within 8 days of the appointed day, submit the
Certificate of Transfer of Undertaking, together with a final list of the assets and liabilities of
the transferor bank updated as at the day immediately preceding the appointed day, to the
Registrar-General for registration and transcription, and provide a certified copy thereof to
the Conservator of Mortgages.

(9) The Certificate of Transfer of Undertaking shall be evidence of the transfer to

and vesting in the transferee bank of the undertaking.

(10) Notwithstanding any other enactment or anything contained in any contract or

agreement, nothing in or authorised by this section shall –

(a) invalidate or discharge any contract or agreement which had been

entered into before the transfer of the undertaking;

(b) constitute a breach of, or default under, or require compliance with any
notice or consent provision, including express or implied consent for
transfer;

42
 (c) require any obligation to be performed sooner or later than would have
otherwise been the case under any contract or instrument to which the
transferor bank is a party or by which it is bound;

(d) allow any party to any contract to which the transferor bank is a party,
or by which it is bound, to terminate that contract where that party
would not otherwise have been able to terminate that contract or to
treat any interest or right under that contract as terminated;

(e) entitle any party to any contract to which the transferor bank is a party,
or by which it is bound, to modify the terms of that contract where that
party would not otherwise have been able to modify those terms or
confer a right, interest or benefit on that party which it would not
otherwise have had;

(f) release any surety wholly or in part from all or any liability under or in
respect of any contract which had been entered into before the transfer
of the undertaking;

(g) otherwise, in relation to the transferred undertaking, place the

transferee bank in a position which is less favourable than the position
in which the transferor bank would have been if this section were not
in operation; or

(h) result in a change in the ranking of any security interest forming part of
the transferred undertaking.

(11) Nothing in this section shall preclude a bank, other than a bank having made
an application under subsection (1) or having been required to restructure its business under
subsection (2), from initiating such action for the transfer or restructuring of its business as it
considers appropriate otherwise than under this section, provided that the approval of the
central bank is obtained for the restructuring.

(12) In the event of conflict or inconsistency between any of the provisions of this
section and those of the Companies Act or any other enactment, the provisions of this section
shall, to the extent of any such conflict or inconsistency, prevail.

(13) The Minister may make regulations to provide for any matter necessary or
consequential to the implementation of this section and the Third Schedule.

(14) In this section and the Third Schedule –

“appointed day” means the date on which a transfer of undertaking becomes

effective, as specified in the notices under subsection (6);

“assets” means the property, rights, powers, interests and privileges of any
description of the transferor bank and includes but shall not be limited to –
(a) rights, powers, interests and privileges that are –

(i) of a personal character (intuitu personae);

43
 (ii) not lawfully capable of being assigned or performed
vicariously;

(iii) expressly stated under any agreement creating them to be

incapable of being assigned or performed vicariously; or

(iv) held by the transferor bank as trustee;

(b) any shares or interests held by the transferor bank in another entity;
and

(c) rights, powers, interests and privileges existing or arising pursuant to a

foreign law, including a contract governed by that foreign law;

“Certificate of Transfer of Undertaking” means a certificate issued under

section 346A of the Companies Act, as referred to in subsection (7)(b);

“interests” includes –

(a) security interests of any description of the transferor bank, whether

secured or unsecured;

(b) security interests witnessed in pari passu, cession de priorité, security

sharing and similar agreements;

“liabilities” means obligations and commitments of the transferor bank and

includes but shall not be limited to –

(a) obligations or commitments that are –

(i) of a personal character (intuitu personae); or

(ii) not lawfully capable of being assigned or performed

vicariously;

(iii) expressly stated under any agreement creating them to be

incapable of being assigned or performed vicariously; or

(iv) incumbent on the transferor bank as trustee;

(b) obligations existing or arising pursuant to a foreign law, including a

contract governed by that foreign law; and

(c) customer deposit accounts;

“parent” has the same meaning as in the Companies Act;

“Registrar of Companies” means the Registrar of Companies appointed under

the Companies Act;

44
 “transferee bank” includes the parent, the wholly owned subsidiary or the
wholly owned subsidiary of the parent of the bank, the financial institution or
specialised financial institution to which a transfer of undertaking is being or
has been effected under this section;

“transferor bank” –

(a) means a bank which is authorised by the central bank to transfer its
undertaking under this section;

(b) includes a bank which has applied for approval for, or is required by
the central bank to effect, a transfer of undertaking under this section;

“undertaking” includes the whole or part of any business, including a branch.

PART V - FINANCIAL STATEMENTS, AUDIT AND SUPERVISION

33. Records

(1) Every financial institution shall, for the purposes of the banking laws, keep in
relation to its activities, a full and true written record of every transaction it conducts.

(2) The records under subsection (1) shall include -

(a) accounting records exhibiting clearly and correctly the state of its
business affairs, explaining its transactions and financial position so as
to enable the central bank to determine whether the financial institution
has complied with all the provisions of the banking laws;

(b) the financial statements;

(c) account files of every customer, business correspondences exchanged

with every customer and records showing, for every customer, at least
on a daily basis, particulars of its transactions with or for the account
of that customer, and the balance owing to or by that customer;

(d) proper credit documentation; and

(e) such other records as the central bank may determine.

(3) Every record under this section shall be kept -

(a) in written form or kept on microfilm, magnetic tape, optical disk, or

any other form of mechanical or electronic data storage and retrieval
mechanism as the central bank may agree to;

(b) for a period of at least 7 years after the completion of the transaction to
which it relates;

(c) at the principal office of the financial institution, or at such other place
as may be approved by the central bank; and

45
 (d) for identification purposes, in chronological order or sequential order,
as appropriate, in batches of convenient size.

34. Financial statements

(1) Except where otherwise authorised by the central bank, every financial
institution shall, not later than 3 months after the end of its financial year, prepare, in
accordance with the International Accounting Standards and such guidelines, not inconsistent
with such Standards, as may be issued by the central bank, its audited financial statements for
the financial year, in such form as may be approved by the central bank.

(2) The central bank may, having regard to the scope of the activities undertaken
by a financial institution, require the financial institution to prepare in respect of its distinct
types of business its financial statements on such distinct basis as may be determined by the
central bank.

(3) The central bank may, by notice, require a financial institution to prepare, in
addition to the financial statements under subsection (1), its financial statements for such
shorter period as may be specified in the notice.

(4) The financial statements under subsections (1), (2) and (3) shall be audited in
the manner specified in section 39.

(5) The financial statements under this section shall be jointly signed by -

(a) in the case of a financial institution incorporated in Mauritius, its chief

executive officer and 2 of its directors; or

(b) in the case of a financial institution incorporated outside Mauritius and

having a branch in Mauritius, its chief executive officer and the next
most senior officer of the principal office of the financial institution in
Mauritius.

(6) Every financial institution shall -

(a) exhibit at all times, in a conspicuous place, at its principal place of

business in Mauritius and at each of its offices and branches in
Mauritius, an authenticated copy of its latest financial statements under
this section duly audited; and
(b) except where otherwise authorised by the central bank, not later than 3
months after the end of the financial year of the financial institution -

(i) forward to the central bank a duly certified copy of its latest
financial statements under this section duly audited; and

(ii) cause to be published in the Gazette and post on its website, or,
where the financial institution does not have a website, in 3
daily newspapers approved by the Bank, the full or abridged
version of its latest audited balance sheet, income statement,
statement of changes in equity, cash flow statement and the
auditor’s report.

46
 (6A) Subsection (6)(b)(ii) shall not apply to money changers.

(6B) Notwithstanding subsection (6)(a), a financial institution may, with the

approval of the central bank, display at its principal place of business branch or office, an
authenticated copy of its duly audited latest financial statements in such form and manner as
the central bank may approve.

(7) Every financial institution incorporated outside Mauritius and having a branch,
subsidiary or joint venture in Mauritius shall furnish to the central bank, not later than one
month after publication, a copy of its audited annual consolidated financial statements,
together with notes thereon and copies of the reports of the auditor and the board of directors.

35. Monthly statements

(1) Every financial institution shall, not later than the tenth working day of each
month, forward to the central bank a statement, in such form and in such medium as may be
approved by the central bank, showing the assets and liabilities of all its offices and branches
in Mauritius together with an analysis of advances, bills discounted and any other credit as at
the close of business on the last working day of the preceding month.

(2) Every financial institution shall furnish the central bank, within such period
and in such manner as it may require, with such additional statements and information
relating to the operations of the financial institution and those of its affiliates in Mauritius or
its branches and affiliates outside Mauritius as the central bank may consider necessary or
expedient to obtain for the purposes of the banking laws and for carrying out effective
consolidated supervision.

36. Credit assessments and asset appraisals

(1) The central bank may, by notice to any bank, require such bank -

(a) to undergo an independent assessment of credit worthiness or financial

stability by a person or organisation nominated or approved by the
central bank;
(b) to undergo an independent appraisal to assess the value of its assets, in
particular real estate and other related assets, by a person or
organisation nominated or approved by the central bank;
(ba) to undergo an independent valuation of the assets which it holds as
collateral, by a person or organisation nominated or approved by the
central bank; and

(c) to transmit to the central bank the results of an assessment under

paragraph (a) or appraisal under paragraph (b) in such manner as the
central bank may direct.

(2) Where the value determined in subsection (1)(b) varies materially from the
value in the books of accounts of the bank, the central bank may send to the bank, its auditors
and the audit committee a notice of the appropriate value of the assets as determined by the
independent appraisal for appropriate action.

47
 (3) Every person appointed pursuant to subsection (1) shall have a right of access
at all times to the books, accounts, records and vouchers of the bank in relation to which the
person has been appointed and those of its subsidiaries in Mauritius and of its branches and
subsidiaries abroad, if any, and may require from the directors or senior officers, employees
and agents of the bank or its subsidiaries in Mauritius or its branches and subsidiaries abroad,
if any, such information and explanations as may appear to be necessary for the performance
of the person’s duties under this section.

(4) Every bank shall comply at its own expense with an assessment or appraisal
under subsection (1).

37. Disclosure of information

(1) The central bank may, by notice, require all financial institutions or all
members of any class of financial institutions, to publish –

(a) within the time specified in the notice, a disclosure statement; and

(b) within 45 days after the end of each calendar quarter, a quarterly
report,

duly signed by its directors.

(2) The substance of the disclosure statement or quarterly report under subsection
(1) shall be specified by the central bank.

(3) A financial institution shall not be required to publish information relating to

the individual affairs of any particular customer or client of the financial institution.

(4) Subject to any directives, guidelines or instructions issued by the central bank,
where a bank issues a credit or charge card to a person, it shall disclose to him -

(a) his rights and obligations in respect of -

(i) the credit limit authorized under the card and the amount of
indebtedness outstanding at any time;

(ii) the period of time for which each statement is issued;

(iii) any charges and interest costs for which the person becomes
responsible for accepting and using the card;

(iv) the minimum amount in respect of the balance outstanding that

must be paid at the end of each statement period; and

(v) the maximum amount of the cardholder’s liability for

unauthorized use of the card where it is lost or stolen;

(b) the cost of borrowing in respect of any loan obtained through the use
of the card, the exchange rate applied and the manner in which it is
calculated, and in the event the required instalment is not paid on the

48
 due date, particulars of the charges and penalties to be paid by the
cardholder; and

(c) the amount of any charge or fee for which the cardholder is responsible
for accepting or using the card and the manner in which the charge is
calculated.

(5) Where a bank intends to change any of the matters referred to in subsection
(4), the bank shall give the cardholder a written notice of the change at least 30 days prior to
the effective date of the change.

(6) Where a financial institution extends credit to a person, it shall –

(a) disclose to him -

(i) the interest charged and the manner in which it is to be

calculated;

(ii) any applicable fee or other charge and the manner in which it is
to be calculated; and

(iii) every term or condition applicable to the credit, clearly

identifying the obligations of the borrower; and

(b) during the period of the credit agreement, send or make available to
him, a statement of account in written or electronic form, not later than
the end of the month following each period of 6 months, showing –

(i) the amounts outstanding, as principal and interest, at the

beginning and at the end of the 6-month period;

(ii) the payments received, as principal and interest, during the 6-

month period; and

(iii) the annual rate of interest applicable during the 6-month period.

(7) (a) The central bank may require every financial institution to send or
make available to the guarantor of a credit facility extended by it, a
statement of account in written or electronic form, in accordance with
directives, guidelines or instructions issued by the central bank.

(b) The directives, guidelines or instructions referred to in paragraph (a) shall

contain–

(i) the classes or categories of credit facilities for which the

statement shall be sent or made available;

(ii) the circumstances under which the statement shall be sent or

made available; and

(iii) such other information as the central bank considers

appropriate and necessary.
49
 (8) In subsection (6) -

“credit” includes any facility granted under a finance lease.

38. Correction of disclosure statement

Where the central bank considers that a disclosure statement or quarterly report under
section 37 published by a financial institution -

(a) contains information that is incorrect, false or misleading; or

(b) does not contain information which it is required to contain, whether or not the
information contained in the disclosure statement is incorrect, false or
misleading as a result of the omission,

the central bank may, without prejudice to any action it may take under the banking laws, by
notice to the financial institution, require the financial institution to -

(i) publish a disclosure statement that does not contain incorrect, false or
misleading information;

(ii) publish a disclosure statement that contains the information that was
omitted; or

(iii) take such other corrective action as the central bank may specify in the
notice.

39. Appointment, powers and duties of auditors

(1) Subject to this section, a financial institution shall at each annual meeting
appoint, and at all times have, one or more firms of auditors.

(2) Any firm of auditors appointed under subsection (1) shall be subject to the
approval of the central bank.

(2A) The central bank may, where circumstances so warrant, revoke the approval
granted under subsection (2).

(3) In addition to the requirements of the Companies Act 2001 and of the
Financial Reporting Act 2004, the firm of auditors shall be independent, experienced in the
audit of financial institutions and have the necessary resources to undertake audits of
financial institutions on a consolidated basis as determined by the central bank.

(4) No firm of auditors appointed under subsection (1) shall be responsible for the
audit of a financial institution for a continuous period of more than 5 years.

(5) Where a firm of auditors has been responsible for the audit of a financial
institution for a continuous period of 5 years or less, that firm shall not be entrusted the
responsibility for the audit of the same financial institution before a period of 3 years from
the date of termination of his last audit assignment.

50
 (5A) Notwithstanding subsections (4) and (5), the central bank may, upon a request
from a financial institution and on just and reasonable grounds shown, approve, in writing,
the extension of the appointment of its firm of auditors –

(a) for an additional period not exceeding 2 years; or

(b) in the case of a branch or subsidiary of a foreign bank, for an

additional period not exceeding 5 years where –

(i) the firm of auditors is also the auditor of its parent financial
institution which is subject to consolidated supervision by
competent foreign regulatory authorities; and

(ii) the engagement partner of the audit firm is rotated with respect
to the additional period approved by the central bank.

(6) The firm of auditors shall make a report -

(a) in the case of a financial institution incorporated in Mauritius, to the

shareholders of the financial institution, and the report shall be
consolidated to include the affiliates and the overseas branches and
affiliates of the financial institution, if any;

(b) in the case of a financial institution incorporated outside Mauritius, to

the head office of the financial institution.

(7) The auditor's report shall be made on the financial statements of the financial
institution.

(8) The auditor shall, in the report, state whether -

(a) the financial statements have been prepared in accordance with

International Accounting Standards and any additional prudential
requirements set out in guidelines issued by the central bank;

(b) the financial statements are, in his opinion, complete, fair and properly
drawn up;

(c) the financial statements present a true and fair view of the affairs of the
financial institution;

(d) the financial statements have been prepared on a basis consistent with
that of the preceding year; and

(e) the explanations or information called for or given to him by the

officers or agents of the financial institution, are satisfactory to him.

(9) The report shall -

(a) in the case of a financial institution incorporated in Mauritius, be read

together with the report of its board of directors at its annual meeting
of shareholders;

51
 (b) in the case of a financial institution incorporated outside Mauritius, be
transmitted to its head office; and

(c) be transmitted to the board of directors of the financial institution

through the Audit Committee established under section 40.

(10) A certified copy of the report together with the audited financial statements
and notes thereon shall be sent to the central bank by the financial institution within such
period as the central bank may specify and in any event not later than one month after it is
made.

(11) An auditor may be appointed by the central bank in every case where a
financial institution fails to appoint an auditor approved by the central bank.

(12) Every auditor appointed under subsection (1) or (11) shall have a right of
access at all times to the books, accounts and records referred to in section 33(2) of the
financial institution, whether kept electronically or otherwise, in relation to which he has
been appointed and those of its affiliates in Mauritius and of its branches and affiliates
outside Mauritius, if any, and may require from the directors, officers and agents of the
financial institution or its affiliates in Mauritius or its branches and affiliates outside
Mauritius, if any, such information and explanations as may appear to him to be necessary for
the performance of his duties under this section.

(13) Every auditor appointed under subsection (1) or (11) shall be paid by the
financial institution in respect of the appointment and where the appointment is made under
subsection (11), the remuneration shall be determined by the central bank.

(14) The central bank may impose on an auditor, in addition to any duty specified
in subsection (8), a duty to -

(a) carry out any extended scope audit or other examination and make
recommendations as necessary;

(b) submit to the central bank such additional information in relation to the
audit, extended scope audit or other examination as the central bank
considers necessary;

(c) submit to the central bank a report on any matter specified in

paragraphs (a) and (b);

(d) submit to the central bank a report on the financial and accounting
systems and internal controls of the financial institution; and

(e) submit to the central bank a report as to whether, in his opinion, the
systems of credit provisioning and write-offs specified by the central
bank are being complied with and whether or not measures to counter
the possibility of money laundering or the funding of terrorist activities
have been adopted by the financial institution and are being
implemented in accordance with any enactment relating to anti-money
laundering and prevention of terrorism and with directives, guidelines
or instructions issued by the central bank.

52
 (15) A financial institution shall remunerate the auditor in respect of the discharge
by him of any additional duties under subsection (14).

(16) Where in the course of the performance of his duties under the Act, an auditor
comes across transactions or conditions in a financial institution affecting its well being and
he has reason to believe that -

(a) there has been a material adverse change in the risks inherent in the
business of the financial institution with the potential to jeopardise its
ability to continue as a going concern;

(b) there has been or there is a breach of any of the provisions of the
banking laws, or the Companies Act 2001 relating to the accounting
records and audit;

(c) measures to counter the possibility of money laundering or the funding

of terrorist activities in accordance with any enactment have not been
or are not being properly implemented;

(d) directives, guidelines or instructions issued by the central bank have

not been or are not being properly followed;

(e) a criminal offence involving fraud or other dishonesty has been, is

being or is likely to be committed;

(f) losses have been incurred which reduce the amount paid as stated
capital or assigned capital, as the case may be, of the financial
institution by 50 per cent or more;

(g) serious irregularities have occurred, including those that jeopardise the
security of depositors and creditors; or

(h) he is unable to confirm that the claims of depositors and creditors are
still covered by the assets,

he shall immediately inform the central bank of the matter and, as soon as
practicable, submit a report thereon to the central bank.

(17) Where, in the performance of his duties, the auditor finds any matter which in
his opinion is of material importance to the well-being of the financial institution, he shall
call a meeting of the Audit Committee for the purpose of considering the matter.

(18) The central bank shall at least once a year arrange meetings with every
financial institution and its auditors to discuss matters relevant to the central bank's
supervisory functions which have arisen in the supervisory process, including on-site
inspections and off-site monitoring of the financial institution, relevant aspects of the
financial institution's business, its accounting and control systems, and its monthly statements
under section 35, disclosure statement and quarterly reports under section 37 and financial
statements, and any matters arising out of the statutory audit.

(19) The central bank may, where it considers it desirable or necessary in the
interests of depositors, arrange meetings with auditors of financial institutions.
53
 (20) No civil, criminal or disciplinary proceeding shall lie against an auditor by
reason of his communicating in good faith to the central bank, whether or not in response to a
request made by it, any information or opinion which is relevant to the central bank's
functions under this Act or any enactment, directives, guidelines or instructions referred to in
subsection (16)(b), (c) and (d).

40. Audit committee

(1) Every bank and non-bank deposit taking institution incorporated in Mauritius
shall by resolution of its board of directors, establish an audit committee which shall, subject
to subsection (2), comprise only independent directors who shall not be less than 3 in
number.
(2) The central bank may, having regard to the scope of the activities undertaken
by the bank, require that the audit committee be composed of such number of non-executive
directors where the bank is a subsidiary or an associate of a foreign banking group of
companies, as the central bank may direct.

(3) The audit committee of a bank or the non-bank deposit taking institution shall-

(a) review the audited financial statements of the bank or the non-bank
deposit taking institution before they are approved by the directors;

(b) require management of the bank or the non-bank deposit taking

institution to implement and maintain appropriate accounting, internal
control and financial disclosure procedures and review, evaluate and
approve such procedures;

(c) review such transactions as could adversely affect the sound financial
condition of the bank or the non-bank deposit taking institution as the
auditors or any officers of the bank or the non-bank deposit taking
institution may bring to the attention of the committee or as may
otherwise come to its attention;
(d) perform such additional duties as may be assigned to it by the board of
directors; and
(e) report to the directors on the conduct of its responsibilities, with
particular reference to section 39.

(4) (a) The internal auditor of the bank or the non-bank deposit taking
institution shall report to the audit committee.

(b) Subject to paragraph (c), the internal auditor and the external auditor
shall be available to the audit committee to attend its meetings.

(c) The audit committee shall meet the internal auditor and the external
auditor at least once annually.

(5) Every member of the audit committee shall keep confidential, and not
disclose, any information obtained in the course of its functions to third parties, save as
otherwise provided for under this Act.

54
 (6) The central bank may require such other financial institution licensed under
this Act to comply with the provisions of this section.

41. Termination of services of auditor

(1) Any financial institution which decides to terminate the services of an auditor
appointed under section 39(1) or (11) before the expiration of his term of office shall -
(a) by resolution passed at a meeting of its shareholders, or by resolution
in lieu of meeting, in accordance with the Companies Act 2001,
terminate the services of the auditor and at the same time appoint a
new auditor; and

(b) obtain prior approval of the central bank to terminate the services of
the auditor stating the reasons therefor or to appoint a new auditor.

(2) Where the financial institution in Mauritius is a branch of a financial

institution incorporated outside Mauritius, it shall present the approval of its head office to
the central bank before terminating the services of an auditor or appointing a new auditor
under subsection (1).

(3) Where an auditor appointed under section 39(1) or (11) intends –

(a) not to seek reappointment; or

(b) to resign before the expiration of his term of office,

he shall, within at least 30 days before the expiry of his term of office or his
date of resignation, as applicable, give notice thereof to the central bank and
the reasons for such action.

42. Regular examinations

(1) The central bank shall conduct regular examinations of the operations and
affairs of every financial institution at least once every 2 years or within such other period as
the central bank may determine, including, where the central bank so specifies, of affiliates
and overseas branches and affiliates of the financial institution, to be made by its officers or
such other duly qualified person as it may appoint and such examinations may be of a scope
as the central bank deems necessary to assess that the financial institution is duly observing
the provisions of the banking laws, directives, guidelines, and instructions issued by the
central bank and is in a sound financial condition.

(2) Where the central bank appoints a duly qualified person to conduct a regular
examination under subsection (1), the costs incurred in that connection may be recovered, in
whole or in part, by the central bank by deduction from any balance of, or money owing to,
the financial institution, as if it were a civil debt.

43. Special examinations

(1) Where, in relation to any financial institution, a special examination appears to

be necessary or expedient in order to determine whether the financial institution is in a sound
financial condition and whether the banking laws or any enactment relating to anti-money
laundering or prevention of terrorism or directives, guidelines and instructions issued by the
central bank, as the case may be, are being complied with, the central bank may appoint one
55
or more of its officers or such other duly qualified person to conduct a special examination in
respect of the affairs of the financial institution and of its affiliates and overseas branches and
affiliates, if any.

(2) Where the central bank has reason to believe that any person who, either as a
principal or as an agent, carries on, advertises or holds himself out in any way as carrying on
banking business, deposit taking business, business of foreign exchange dealer or money-
changer or accepting deposits from the public, without a licence or written authorisation from
the central bank, it –

(a) shall require the person to produce for examination its books, accounts,
records and financial statements and such other information and
certified copies of all relevant documents as it may require to ascertain
whether the person is carrying on that business;

(b) may cause a notice in writing to be issued, calling upon any person
who is suspected to be involved in engaging in activities under the
banking laws without holding the appropriate licence, to attend the
central bank for the purpose of being examined orally in relation to any
matter which may assist in its investigation and calling upon the person
to produce any book, document or information in his possession within
the period specified in the notice; and

(c) may issue a warning alert to caution the public that the person
specified in the alert may be engaging in activities under the banking
laws without holding the appropriate licence issued by the central
bank.

(3) Where the central bank appoints a duly qualified person to conduct a special
examination in respect of the affairs of a financial institution and of its affiliates and overseas
branches or affiliates, if any, the costs incurred in connection therewith may be recovered, in
whole or in part, by the central bank by deduction from any balance of, or money owing to,
the financial institution, as if it were a civil debt.

(4) The central bank may, when exercising a power under subsection (2)(a),
request such assistance as may be necessary from the Commissioner of Police.

44. Powers of examiners and special examiners

(1) The central bank may authorise in writing any of its officers or any other
person appointed by the central bank for that purpose to conduct, either jointly or separately,
a regular examination under section 42 or a special examination under section 43, and any
such officer or person shall have the power to –

(a) examine all books, minutes, accounts, records, cash, securities,

vouchers and any other document, in the possession or custody of the
financial institution or of its affiliates in Mauritius or its branches and
affiliates outside Mauritius;
(aa) have access to any program or data and take extracts of any file,
document or record held electronically in any computer or other

56
 electronic device of the financial institution or of its affiliates in
Mauritius or its branches and affiliates outside Mauritius; and

(b) require, within such time as may be specified, such information and
copies of all relevant documents, that he may reasonably require
concerning its business, or that of its affiliates in Mauritius, or that of
its branches and affiliates outside Mauritius, if any, as appear
necessary.

(2) Every person appointed by the central bank for the purposes of sections 42 and
43 shall comply with the provisions of confidentiality under the banking laws.

45. Powers of central bank following examination

(1) Where, in relation to any financial institution, the central bank is of the
opinion that as a result of an examination made under section 42 or a special examination
made under section 43 or other information at its disposal, that -

(a) any director or senior officer or employee of the financial institution is

not a fit and proper person;
(b) the financial institution has, or any of its directors or senior officers or
employees have, engaged in unsafe or unsound practices in conducting
its business in a manner detrimental to the interests of its depositors, or
the financial institution has, or has knowingly or negligently permitted
any of its directors or senior officers or employees or agents to violate
any provision of the banking laws or any enactment relating to anti-
money laundering or prevention of terrorism and the regulations,
directives, guidelines, or instructions issued by the central bank to
which the financial institution is subject, or the central bank has
reasonable cause to believe that such actions or violations are about to
occur;

(c) the financial institution has insufficient assets to cover its liabilities;

(d) the amount paid as stated capital or the assigned capital, as the case
may be, of the financial institution is impaired; or

(e) the financial institution is otherwise in an unsafe or unsound condition,

the central bank may -

(i) impose or vary conditions attaching to the financial institution's
licence in accordance with section 10 or 16, as the case may be,
invoking in cases of urgency the procedure specified in section
17;
(ii) require the financial institution forthwith to take such steps as
may appear to the central bank to be necessary to remedy the
situation; and
(iii) appoint a person to advise the financial institution in the proper
conduct of its business and fix the remuneration to be paid by
the financial institution to the person so appointed.

57
 (2) Where the central bank considers that an examination made under section 42
or a special examination made under section 43 or other information at its disposal shows that
the financial institution concerned has or any of its directors or senior officers or employees
or agents have engaged in unsafe or unsound practices in conducting the business of the
financial institution in a manner detrimental to the interests of its depositors, or have
knowingly or negligently permitted any of its directors or senior officers or, employees or
agents to violate any provision of the banking laws or any enactment relating to anti-money
laundering or prevention of terrorism and the regulations made, or directives or guidelines, or
instructions issued by the central bank to which the financial institution is subject, or the
central bank has reasonable cause to believe that such actions or violations are about to occur,
the central bank may -

(a) issue a cease and desist order that requires the financial institution and
its directors, senior officers, employees or shareholders holding a
significant interest, as the case may be, to cease and desist from the
actions and violations specified in the order and may require
affirmative action to correct the conditions resulting from any such
actions or violations;

(b) issue an order to the financial institution to suspend from office any
director or senior officer or employee who has engaged in, or is
otherwise responsible for, such actions or violations.

(3) A suspension under subsection (2)(b) shall be for an initial period of 30 days
and may be extended for similar periods or made permanent by decision of the central bank,
following completion of a hearing under subsections (6) and (7).

(4) Any action proposed to be taken by the central bank, or already taken under
this section, shall be notified in writing to the financial institution and to the director or senior
officer, employee and shareholder holding a significant interest, as the case may be.

(5) Any recipient of a notice under subsection (4) may, within 15 days of the date
of the notice, make a request in writing to the central bank for a hearing.

(6) Where a request is made under subsection (5), the central bank shall give an
opportunity for the recipient to be heard and present arguments within 14 days of the date of
the request and during that period of 14 days, any action taken by the central bank under
subsection (4) shall not be suspended but shall remain in effect.

(7) The decision of the central bank shall be rendered within 15 days of the
completion of the date of the hearing under subsection (6).

45A. Freezing of assets

(1) Where, on an application by the central bank, the Judge in Chambers is

satisfied that the central bank has reasonable ground to suspect that a person has committed,
is committing or is likely to commit an offence under the banking laws, the Judge in
Chambers may order –

(a) the prohibition by the suspect or any other person acting on his behalf,
or any person holding assets on his behalf, from disposing, transferring

58
 or pledging any of his assets or making any withdrawal from any
account or deposit at a financial institution;

(b) the attachment in the hands of any other person named in the order of
all moneys and other property due or owing, or belonging to, or held
on behalf of the suspect;

(c) the suspect to make a full disclosure within such time as may be
specified in the order, of all his possessions, and the nature and source
of such possessions;

(d) any other person named in the order to make a full disclosure of all
moneys and property held on behalf of the suspect; or

(e) the opening, in the presence of a person authorised by the central bank,
of any safe deposit box held on behalf of the suspect.

(2) Where an order is made under subsection (1)(a) or (b), the central bank may –

(a) give public notice of the order, unless the central bank reasonably
believes that such notice is likely to obstruct the conduct of any
investigation under this Act; and

(b) give notice of the order to all notaries and to financial institutions, and
any other person who may hold or be vested with property belonging
to or held on behalf of the suspect.

(3) An order under subsection (1) shall be served on the suspect and on every
person named in the order.

(4) Where a notice is published under subsection (2), any person who allows,
procures or facilitates the disposal of money or property belonging to the suspect shall
commit an offence.

(5) (a) The Judge in Chambers may, on application and on good and sufficient
cause shown, authorise such reasonable amount to be withdrawn from
a bank or other financial institution for the subsistence of the suspect
on such conditions as the Judge thinks fit.

(b) The central bank shall be a party to an application under paragraph (a).

(6) An order under subsection (1)(a) or (b) shall remain in force –

(a) where an investigation is being carried out by the central bank or by

the Commissioner of Police, until the completion of the investigation,
or until such time as the central bank or the Commissioner of Police
decides not to proceed with the investigation or recommends that the
order be lifted; or

59
 (b) where the suspect has been charged with an offence, until the final
determination of that charge by a Court or until such time as the
Director of Public Prosecutions decides not to proceed with the charge.

(7) In this section –

“suspect” means a person whom the central bank has reasonable ground to
suspect has committed, is committing or is likely to commit an offence under
the banking laws.

PART VI - RESPONSIBILITIES OF DIRECTORS AND OTHER OFFICERS OF

FINANCIAL INSTITUTIONS

46. Fit and proper person

(1) No person shall be appointed or reappointed as director of a financial

institution unless the appointment or reappointment takes into account the guidelines issued
by the central bank relating to fit and proper persons.

(2) No financial institution shall appoint or reappoint any person as senior officer
in Mauritius unless -

(a) prior notice to the central bank is given by the financial institution at
least 20 days before the date of the proposed appointment or re-
appointment;

(b) the notice under paragraph (a) is accompanied by a certificate of good

conduct acceptable to the central bank, or a certificate of character
dating back to not more than 3 months, or an affidavit duly sworn
stating any convictions for crimes and any past or present involvement
in a managerial function in a body corporate subject to insolvency
proceedings or having declared personal bankruptcy duly executed by
the person concerned; and

(c) the central bank is satisfied that the person to be appointed or re-
appointed is a fit and proper person.

(2A) No financial institution shall outsource any of its material activities to any
other person unless the central bank is satisfied that the person meets the requirements of
subsection (3).

(3) The central bank shall, for the purposes of determining whether the person is a
fit and proper person, have regard to -

(a) his probity, integrity, diligence, competence and business experience,

(b) his previous conduct and activities in business; and
(c) the person not having been subject to any conviction of an offence
involving fraud or other dishonesty.

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 (4) The central bank shall communicate in writing to the financial institution its
objection, if any, to the appointment or re-appointment of the person within 15 days of the
date of receipt of the notification under subsection (2).

(5) Any person who attempts to assume any office specified in subsection (2) over
the objection of the central bank under subsection (4) shall be subject to a suspension order
by the central bank under section 45(2)(b).

(6) Where the central bank has reason to believe that any person is, by virtue of its
shareholding in the financial institution or otherwise, in a position to influence any person
specified in subsection (1) or (2), and is exercising its influence in a manner which is likely to
be detrimental to the interests of depositors, the central bank may request that the shareholder
holding a significant interest and the financial institution to remedy the situation.

(7) Where a shareholder holding a significant interest or a financial institution

fails to give satisfaction to the central bank following a request made under subsection (6),
the central bank may take action against him under section 45(2)(a).

47. Disqualification

(1) Without prejudice to the provisions of the Companies Act 2001, any person
who is a director or senior officer or an employee concerned with the management of a
financial institution, shall cease to hold office where he is -

(a) declared bankrupt or makes a composition with his creditors; or

(b) convicted of any offence involving fraud or dishonesty.

(2) No director or senior officer or employee of any financial institution shall be

at the same time a director or senior officer or an employee of any other financial institution
except with the approval of the central bank.

(3) No person who has been a director of, or directly or indirectly concerned in
the management of, a financial institution which has been liquidated shall, without the
approval of the central bank, act or continue to act as a director of, or be directly or indirectly
concerned, in the management of a financial institution.

48. Disclosure of interest

(1) Any director or senior officer of a financial institution who is in any manner,
whether directly or indirectly, interested in an advance, loan or credit from the financial
institution, or has any direct or indirect interest in relation to any matter or undertaking which
he may have with the financial institution shall –

(a) disclose in writing the nature and extent of his interest to the board of
directors of the financial institution; and

(b) not take part in any deliberation or any decision-making process in

relation thereto.

(2) Any disclosure of interest under subsection (1)(a) shall be made at the earliest
opportunity or at or before a meeting of the board of directors convened to discuss the matter
or before a decision is made thereon.
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 (3) The board shall cause the disclosure of interest under subsection (1)(a) to be
circulated forthwith to all the directors individually.

(3A) Every financial institution shall implement policies and procedures requiring
their employees to disclose any direct or indirect interest in relation to any matter or
undertaking which they may have with the financial institution.

(4) Where a director or senior officer of a financial institution who holds any
office or acquires property whereby, whether directly or indirectly, duties or interests might
be created in conflict with his duties or interests as director as a consequence thereof or
otherwise or senior officer of the financial institution, he shall disclose in writing, at a
meeting of the board of directors of the financial institution, the fact, nature and extent of the
conflict and where the board of directors determines that the director or senior officer is in a
situation of conflict of interest, he shall abstain from taking part in any decision on or vote
taken by the board of directors on the matter.

(5) The disclosure under subsection (4) shall be made at the first meeting of the
board of directors held -

(a) after the declarant becomes a director or senior officer of the financial
institution; or

(b) where he is already a director or senior officer of the financial

institution after he commences to hold the office or comes into
possession of the property, as the case may be; and

(c) such disclosure shall be recorded in the minutes of the meeting.

(6) Every disclosure under subsection (1) or (4) shall be chronologically recorded
by the financial institution in a separate register which, as and when required, shall be
produced for examination by officers or other persons duly authorised by the central bank.

49. Indemnity insurance

The central bank may require any financial institution to provide protection and
indemnity against burglary, defalcation, and other similar insurable losses.

PART VII - ELECTRONIC BANKING

50. Automated teller machines

(1) Where any bank sets up automated teller machines for the use by customers to
make deposits or cash withdrawals, it shall, notwithstanding section 7(7), inform the central
bank accordingly.

(2) Where a bank sets up automated teller machines, it shall provide such security
for their operation, and such systems for customer authentication, terminal receipts and
periodic statements and for physical and logical protection against unauthorized access in any
form.

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51. Computer access

(1) Any bank may provide to its customers remote access to their accounts
through computers using proprietary software or the Internet.

(2) Where a bank permits computer access to customers’ accounts, it may permit
customers, by computer access, to transfer funds between accounts, initiate payments, apply
for credit or to use such other facilities as may be provided by the bank.
(3) Any bank that permits computer access to customers shall -
(a) provide the customers with a privacy policy statement which shall
include information to be accessed and retrieved and how the
information shall be used by the customers; and
(b) permit any customer to opt out of information sharing concerning him
by banks with affiliates or with third parties.

(4) Where a bank provides computer access to its customers, it shall provide such
security for their Internet or proprietary platforms, and such systems for customer
authentication, appropriate documentation and for physical and logical protection against
unauthorized external access in any form whether by individual penetration attempts,
computer viruses, denial of service, and other forms of electronic access, as the central bank
considers adequate.

52. Electronic Delivery Channel

(1) Banks may provide services to customers through electronic delivery channels
such as the Internet.

(2) Banks shall have such systems to identify, monitor, and control transactional
risk from the bank’s use of technology and shall provide such security for their Internet
platforms, including such systems for customer authentication and for physical and logical
protection against unauthorized external access by individual penetration attempts, computer
viruses, denial of service, and other forms of electronic access.

(3) Banks may provide operational functions themselves or contract with third-
party service providers, provided that third-party service providers agree that their services to
the bank will be subject to regulation and examination by the central bank to the same extent
as if such services were being performed by the bank itself on its own premises.

(4) The operational functions under subsection (3) may include item processing,
web-hosting, credit checking, credit and other payment card services, customer service, data
processing, Internet service access, and processing loan operations.

(5) Banks may host web-pages of third parties or provide links to third-party
websites to enable banks’ customers to receive financial and non-financial products and
services, provided that banks shall make clear to customers when they -

(a) are establishing a transaction with the bank and when they are not; and

(b) are leaving the website of the bank.

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 (6) Any bank which provides services under subsection (5) -

(a) shall advise customers that they do not provide or guarantee the
products or services available to customers through third-party
websites; and

(b) may receive finder’s fees for purchases by their customers of third-
party products or services originated from banks’ websites.

53. Clearing house and payments system

Every bank shall comply with the instructions issued by the central bank for the
smooth functioning of the clearing house and payments system including the Mauritius
Automated Clearing and Settlement System (MACSS), set up by the central bank.

53A. New products, business practices, delivery mechanisms and technologies

Every financial institution and every holder of a licence shall, in relation to the
development of new products and new business practices, including new delivery
mechanisms, and the use of new or developing technologies for both new and pre-existing
products –

(a) undertake a risk assessment prior to the launch or use of such products,
business practices and technologies;

(b) identify and assess the money laundering and terrorism financing risks that
may arise in relation to the launch or use of such products, business practices
and technologies; and

(c) take appropriate measures to manage and mitigate the risks identified.

PART VIII - ADMINISTRATION OF FINANCIAL INSTITUTIONS

54. Internal control systems

Every financial institution shall maintain adequate internal control systems,

commensurate with the nature and volume of its activities and various types of risks to which
it is exposed, regarding–

(i) operations and internal procedures;

(ii) the organisation of accounting and information processing systems;

(iii) risk and result measurement systems;

(iv) documentation and information systems; and

(v) cash flow transactions monitoring systems.

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54A. Protection of whistleblowers

(1) Subject to subsection (4), where a director, a senior officer, an employee or an

agent of a financial institution –

(a) discloses to the central bank that the financial institution or a customer
of the financial institution may have been involved in an act which
constitutes a breach of the banking laws; and

(b) at the time he makes the disclosure, has reasonable grounds to believe
that the information he discloses may be true,

he shall incur no civil or criminal liability as a result of such disclosure and no

disciplinary action shall be initiated against him by reason of such disclosure.

(2) The central bank shall not, without the consent of the person making the
disclosure, disclose the identity of that person.

(3) Any person who commits an act of victimisation against a person who has
made a disclosure under subsection (1) shall commit an offence and shall, on conviction, be
liable to a fine not exceeding one million rupees and to imprisonment for a term not
exceeding 5 years.

(4) Any person who wilfully makes a false disclosure under subsection (1) shall
commit an offence and shall, on conviction, be liable to a fine not exceeding one million
rupees and to imprisonment for a term not exceeding 5 years.

(5) In this section –

“victimisation” means an act –

(a) which causes injury, damage or loss;

(b) of intimidation or harassment;

(c) of discrimination, disadvantage or adverse treatment in relation to a

person’s employment; or

(d) amounting to threats of reprisals.

55. Identity of customers

(1) Every financial institution shall only open accounts for deposits of money and
securities, and rent out safe deposit boxes, where it is satisfied that it has established the true
identity of the person in whose name the funds or securities are to be credited or deposited or
the true identity of the lessee of the safe deposit box, as the case may be.

(2) Every financial institution shall require that each of its accounts be properly
named, at all times, so that the true owner of the accounts can be identified by the public and
no name shall be allowed that is likely to mislead the public.

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56. Validity of thumb print

In all the transactions connected with the opening of deposit into, or withdrawal from,
a savings account or a fixed deposit account, the thumb print of a depositor who is unable to
sign shall, where it is affixed in the presence of, and certified by, 2 officers of the financial
institution, have the same legal effect as if the depositor had signed his name.

57. Bank’s obligations towards customers

(1) A drawee bank upon which cheques have been drawn by its customer shall
send or make available to the customer a statement of account in written or electronic form,
showing payment of the cheques for the account and shall either return or make available to
the customer the cheques paid or provide information in the statement of account sufficient to
allow the customer reasonably to identify the cheques paid.

(2) The statement of account shall -

(a) provide sufficient information where the cheque is described by

transaction date, description or particulars and amount; and

(b) specify the different charges in respect of the cheque book facilities
provided by the bank to the customer.

(3) The frequency required for sending such statements of account shall be agreed
with the central bank.

(4) Where the cheque is not returned to the customer, the bank retaining the
cheque shall keep it in its physical form or in a legible copy by use of microfilm, magnetic
tape, optical disk, or any other form of mechanical or electronic data storage and retrieval
mechanism as the central bank may approve, for a period of at least 7 years as from the date
the cheque is drawn.

(5) Where a bank has paid a cheque, the customer drawing the cheque may
request the bank to return him the cheque and the bank shall provide within a reasonable time
either the cheque or, where the cheque has been destroyed, presented for payment by
electronic means under section 44A of the Bills of Exchange Act or is not otherwise
obtainable, a legible copy of the cheque at a charge that shall not exceed the maximum
charge determined by the central bank.

(5A) (a) Subject to paragraph (b), a bank shall send or make available to its
customer a statement of account, on a regular basis but at least once
every year, showing the balance maintained on the account together
with the transactions effected in the account during the relevant period
of the statement.

(b) Where an account has remained inactive and the statement of account
sent to the customer under paragraph (a) has returned undelivered on
more than 3 consecutive instances during the period the account has
remained inactive, the bank may, subject to the bank taking action to
obtain the postal address of the customer within a reasonable period,
cease to send the statement of account to the customer.

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 (6) Where a customer’s deposit or money lodged with a financial institution for
any purpose, becomes less than the minimum balance requirement in force in a financial
institution from time to time and it has been left untouched for a period of one year and the
customer has not responded within 6 months to a letter from the financial institution
informing him of any service fees or charges that may be applicable on the deposit or money
for reason of it having fallen below the minimum balance, sent by registered post to the
customer’s last known address, the deposit or money, as the case may be, shall, without
formality, be handed over forthwith by the financial institution to the customer concerned in
person, failing which it shall be transferred to the central bank to be dealt with in the manner
referred to in section 59.

(7) Every financial institution shall at all times display, in a conspicuous place in
the public part of its principal place of business and in each branch or office of the financial
institution, the rates of the fees or charges in respect of services provided by the financial
institution in such form and manner as may be determined by the central bank.

(8) The rates of the fees or charges referred to in subsection (7) shall be posted on
the website of the financial institution.

(9) In this section ˗

“cheque” includes any payment by means of credit card or any payment order
or transaction, whether made electronically or otherwise;

“inactive” refers to an account where there has not been any customer induced
transaction during one year or more.

58. Customer’s duty to report unauthorised signature or alteration

(1) Where a bank sends or makes available a statement of account or cheque

pursuant to section 57, the customer shall exercise reasonable promptness in examining the
statement or the cheque to determine whether any payment was not authorised because of an
alteration of a cheque or because a purported signature by or on behalf of the customer was
not authorised.

(2) Where, based on the statement or cheque provided, the customer ought to have
reasonably discovered the unauthorised payment, the customer shall promptly notify the bank
of the relevant facts.

(3) Where the bank proves that the customer failed, with respect to a cheque, to
comply with the duties imposed on the customer by subsections (1) and (2), the customer
shall be precluded from asserting against the bank -

(a) the unauthorised signature or the alteration on the cheque, where the
bank also proves that it suffered a loss by reason of the failure; and

(b) the unauthorised signature or the alteration by the same wrongdoer on

any other cheque paid in good faith by the bank where the payment
was made before the bank received notice from the customer of the
unauthorised signature or alteration and after the customer had been
afforded a reasonable period of time, not exceeding 30 days, in which
to examine the cheque or statement of account and notify the bank.

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 (4) Where subsection (3) applies and the customer proves that the bank failed to
exercise ordinary care in paying the cheque and that the failure substantially contributed to
loss, the loss shall be allocated between the customer precluded and the bank asserting the
preclusion according to the extent to which the failure of the customer to comply with
subsections (1) and (2) and the failure of the bank to exercise ordinary care contributed to the
loss.

(5) Where the customer proves that the bank did not pay the cheque in good faith,
the preclusion under subsection (3) shall not apply.

(6) Without regard to care or lack of care of either the customer or the bank, a
customer who does not within one year after the statement or cheques are made available to
the customer, pursuant to section 57, discover and report any unauthorised signature on or
any alteration on the cheque shall be precluded from asserting against the bank the
unauthorised signature or alteration.

(7) Every bank shall notify its customers of their duties under subsections (1) and
(2) and a notice to that effect shall be printed on the face of each bank statement of the
customer.

(8) Notification under subsection (7) shall, in the case of existing customers be
made within 60 days of the coming into force of this Act and in the case of new customers, at
the time the account is opened.

59. Abandoned funds

(1) Notwithstanding anything in any agreement between a financial institution and

its customer and irrespective of the amount, where a customer's deposit, or money lodged
with a financial institution for any purpose, has been left untouched and not reclaimed for 7
years or more and the customer has not responded within 6 months to a letter from the
financial institution about the dormant deposit or money sent by registered post to the
customer's last known address, the deposit or money, as the case may be, shall be deemed to
have been abandoned and shall, without further formality, be transferred forthwith by the
financial institution concerned to the central bank to be dealt with as decided by the central
bank.

(2) The central bank shall maintain such records of any deposit or money
abandoned as to enable the financial institution to refund to the owner or his heirs or assigns
the deposit or money to which a rightful claim is established to the satisfaction of the central
bank.

(3) No refund made under subsection (2) shall carry any interest.

60. Evidence in relation to banker's books

(1) Notwithstanding any other enactment, a copy of any entry in a banker's books
shall be prima facie evidence of such entry and of the matters, transactions and accounts
recorded where -

(a) the book was, at the time the entry was made, one of the ordinary
books of the bank;

(b) the entry was made in the usual course of the business of the bank;
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 (c) the book is in the custody of the bank; and
(d) the copy of the entry is certified by a responsible person to have been
compared with, and is a correct copy of, the original entry.

(2) No director or senior officer, employee or agent of a bank shall, in any

proceedings to which the bank is not a party, be compelled to produce any banker's book, the
contents of which can be proved under subsection (1) or to appear as a witness to prove the
matters, transactions and accounts recorded except by order of a Judge in Chambers or any
court and on good cause shown.

(3) A Judge in Chambers or any court may, on the application of any party to
legal proceedings, order that such party be permitted to obtain copies of any entry in a
banker's book where such entry is material to the proceedings.

(4) Any application made under subsection (3) shall be served on the bank in
respect of whose banker's books the application is made.

(5) For the purposes of this section, "banker's books" includes ledgers, day books,
cash books, account books, records, financial statements or other documents used in the
ordinary course of business of a bank, whether all these are in written form or are kept on
microfilm, magnetic tape, or any other form of mechanical or electronic data retrieval
mechanism.

60A. Certificate of senior officer of financial institution as evidence

In any proceedings before any Court, or before any person authorised by law or by
consent of parties to hear, receive and examine evidence, a certificate under the hand of a
senior officer of a financial institution shall be sufficient evidence of a fact stated in it without
proof of the handwriting of such officer, unless the Court or the person is of opinion that the
officer’s attendance is necessary.

61. Control of advertisement

(1) No advertisement respecting deposits shall be made on behalf of a financial

institution unless a copy of such advertisement has been submitted to the central bank not less
than 7 days before the intended date of publication or other dissemination.

(2) For the purpose of this section, an advertisement means any material, written,
published, broadcast or otherwise, containing an invitation to make a deposit or obtain other
financial services or information such as might lead directly or indirectly to the making of a
deposit.

(3) Where in the opinion of the central bank an advertisement is misleading, the
central bank may direct the financial institution or other person responsible for the
dissemination of such advertisement to withdraw or modify it as directed by the central bank,
and the person to whom the direction is given shall comply with it.

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62. Hours of business

(1) Subject to this Part, the central bank shall -

(a) determine the daily minimum working hours of a financial institution;

and

(b) inform every financial institution of the hours during which the central
bank shall give facilities to it for the purposes of clearing and
settlement of payments under the Mauritius Automated Clearing and
Settlement System (MACSS) set up by the central bank.

(2) Subject to this Part, every financial institution shall inform the central bank of-

(a) the hours during which it shall remain open for the transaction of
business with the public; and

(b) in the case of a bank, the hours during which it shall give facilities to
its customers to effect electronic transactions on their accounts for
same day value.

(3) Where a financial institution proposes to review its hours of business on any
day, it shall –

(a) forthwith inform the central bank; and

(b) give notice thereof to the public at least 24 hours before the day on
which the revised business hours are proposed to be observed.

63. Bank holidays

(1) The central bank may, with the approval of the Minister, declare by public
notice, any day, or any part thereof, to be a bank holiday.

(2) Where a financial institution proposes to transact business with the public on a
bank holiday or a public holiday, it shall

(a) forthwith inform the central bank; and

(b) give notice to the public at least 24 hours before the day on which it
proposes to transact business.

(3) Any obligation which is required to be fulfilled at a financial institution and

which falls due on any Saturday, bank holiday or public holiday shall be deemed to fall due
on the following working day.

64. Confidentiality

(1) (a) Subject to this Act, every person, including a service provider who by
virtue of his professional relationship with a financial institution, has
access to the books, accounts, records, financial statements or other

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 documents, whether electronically or otherwise, of a financial
institution shall –

(i) in the case of a director or senior officer, take an oath of

confidentiality in the form set out in the First Schedule;
(ii) in the case of a director or service provider who is a non-
resident, take an oath of confidentiality before the competent
court or authority in the country of residence of the director or
service provider, in such form as the central bank may approve;
or

(iii) in any other case, make a declaration of confidentiality before

the chief executive officer or deputy chief executive officer of
the financial institution in the form set out in the Second
Schedule,

before he begins to perform any duties under the banking laws.

(aa) Paragraph (a) shall not apply where a service provider provides a
financial institution with a written undertaking signed by its officer in
charge and all its employees to the effect that they shall not, during and
after their relationship with the financial institution, disclose, directly
or indirectly to any person, any information relating to the affairs of
any of its customers, including any deposits, borrowings, or
transactions or other personal, financial or business affairs, without the
written consent of the customer or his personal representative, and the
financial institution requires the officer in charge of the service
provider to make, on behalf of the service provider and all its
employees, the declaration of confidentiality in the form set out in the
Second Schedule.

(ab) Notwithstanding paragraphs (a) and (aa), the central bank may, where
the circumstances so warrant, require a financial institution or a service
provider to comply with such confidentiality requirements as it may
specify in such guidelines, directives or instructions as it may issue.

(b) For the purpose of paragraph (a) –

“banking laws” includes the National Payment Systems Act 2018;

“professional relationship” means any relationship between a financial

institution and a service provider, of which the central bank has been
made aware.

(1A) Any person –

(a) to whom any information pertaining to a customer or financial

institution is disclosed and who knows or has reasonable grounds to
believe, at the time of the disclosure, that the information was
disclosed to him in contravention of this section;

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 (b) who is in possession of information relating to the affairs of a customer
or financial institution without just or reasonable grounds or in
contravention of this section; or

(c) who publishes, in any form whatsoever, any information relating to the
affairs of a customer or financial institution without the express written
consent of the customer or financial institution or in contravention of
this section,

shall commit an offence and shall, on conviction, be liable –

(i) in the case of an individual, to a fine not exceeding 500,000

rupees and to imprisonment for a term not exceeding 3 years;
or

(ii) in any other case, to a fine not exceeding one million rupees.

(1B) Where a person is prosecuted for an offence under subsection (1A)(a) or (b), it
shall be a defence for the person to prove that –

(a) the disclosure was made without his consent;

(b) where the disclosure was made in a written form, he, as soon as
practicable, surrendered or took all reasonable steps to surrender the
information and all copies thereof to the central bank; and

(c) where the disclosure was made in an electronic form, he, as soon as
practicable, took all reasonable steps to ensure that all electronic copies
of the information were deleted and that the information and all copies
thereof in other forms were surrendered to the central bank.

(2) Except for the purpose of the performance of his duties or the exercise of his
functions under the banking laws or as directed in writing by the central bank, no person
referred to in subsection (1) shall, during or after his relationship with the financial
institution, disclose directly or indirectly to any person any information relating to the affairs
of any of its customers including any deposits, borrowings or transactions or other personal,
financial or business affairs, without the prior written consent of the customer or his personal
representative.

(3) The duty of confidentiality imposed under this section shall not apply where -

(a) a customer who had been issued a credit card or charge card by a
financial institution, has his card suspended or cancelled by the
financial institution by reason of his default in payment, and the
financial institution discloses information relating to the customer’s
name and identity, the amount of his indebtedness and the date of
suspension or cancellation of his credit card or charge card to other
financial institutions issuing credit cards or charge cards in Mauritius;

(b) the customer is declared bankrupt in Mauritius or, in a case of a

company, is being wound up;

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(c) the customer has passed away, testate or intestate, and the information
is required by his appointed personal representative or his testamentory
executor solely in connection with the succession estate;

(d) civil proceedings arise involving the financial institution and the
customer or his account;

(da) disclosure is necessary to –

(i) enable the financial institution to make a complaint or lodge a

report to an officer authorised under any enactment to –

(A) receive a complaint or report; or

(B) carry out an investigation or prosecution,

in relation to a person involved or suspected to be involved in

an offence;

(ii) any Court;

(e) the information is required by a colleague in the employment of the

same financial institution in Mauritius or an auditor or legal
representative of the financial institution who requires and is entitled to
know the information in the course of his professional duties;

(f) the information is required by another financial institution for the

purpose of assessing the credit-worthiness of a customer, provided that
the information is being sought for commercial reasons and is of a
general nature;

(fa) the information is required to be disclosed by the financial institution

for the purpose of discharging its responsibilities under Part VIIIA;

(fb) with respect to payable-through accounts, the customer due diligence

information is required to be disclosed, upon request, by the financial
institution to another institution with which it maintains a
correspondent banking relationship, provided that the institution has
given to the financial institution a written undertaking regarding the
confidentiality of the information provided;

(fc) the customer due diligence information is required to be disclosed by

the financial institution for the purpose of meeting the requirement set
out by the central bank with respect to domestic or cross-border wire
transfers or reliance on a third party;

(g) the financial institution has been served with a garnishee order
attaching monies in the account of the customer;

(h) any person referred to in subsection (1) is summoned to appear before

a court or a Judge in Mauritius and the court or the Judge orders the
disclosure of the information;

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 (i) the information is required for transmission to the Credit Information
Bureau, the Credit Scoring Services Agency or the Central KYC and
Accounts Registry established under the Bank of Mauritius Act 2004;

(j) the financial institution is required to make a report or provides

additional information on a suspicious transaction to the Financial
Intelligence Unit under the Financial Intelligence and Anti-Money
Laundering Act 2002;

(k) the financial institution is required to provide information in

compliance with section 48 or an order pursuant to the Asset Recovery
Act 2011;

(l) the financial institution, other than a cash dealer, is required to provide
information and particulars, and to do any other act, under Sub-Part
BA of Part VIII or Part IX of the Income Tax Act;

(m) in respect of credit information, the information is required for

transmission to the guarantor of a credit facility contracted by the
customer;

(n) disclosure of information is required for the purposes of section 30, 32

or 32A;

(o) the information is required by the central bank for the purpose of
assisting the Financial Services Commission established under the
Financial Services Act in the discharge of its functions under that Act
or its obligations under any international agreement, convention or
treaty to which it is a party; or

(p) the financial institution is required to provide information, documents

and particulars to the Ombudsperson for Financial Services to enable
him to discharge, or assist him in discharging, his functions under the
Ombudsperson for Financial Services Act 2018.

(4) Subject to subsections (6) and (7), where the head office of a financial
institution -
(a) incorporated outside Mauritius requires information from its branch in
Mauritius about any transaction of that branch; or
(b) incorporated in Mauritius requires information from its branch outside
Mauritius about any transaction of that branch,
the information shall be disclosed.

(5) Subject to subsections (6) and (7), where the parent financial institution of a
subsidiary operating in Mauritius and subject to consolidated supervision requires
information from the subsidiary about any transaction of the subsidiary, the information shall
be disclosed.

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 (6) Where the information which is required under subsection (4) or (5) relates to
a transaction with a customer other than a financial institution, no information other than
credit facilities granted to or foreign exchange transactions with the customer shall be
disclosed.

(7) No information relating to deposits taken from or foreign exchange

transactions with a central bank or any other entity or agency, by whatever name called,
which performs the functions of a central bank, shall be disclosed.

(7A) (a) Nothing in this section shall preclude a financial institution from
disclosing to the head office or the holding company of the financial institution, whether in or
outside Mauritius, or any other person, designated by the head office or holding company to
perform such functions, any information relating to the affairs of the financial institution or
its customers for the purpose of conducting such risk management functions as may be
approved by the central bank or centralised functions of audit, risk management, compliance,
finance, information technology or such other centralised function as the central bank may
approve.

(b) Any person who has access to any information disclosed by the
financial institution under paragraph (a) shall comply with the duty of confidentiality
imposed under this section.

(8) Where an officer of a foreign financial institution or an officer of a central

bank or banking regulator in a foreign country or any other entity or agency, by whatever
name called, having the responsibility to supervise financial institutions or performing the
functions of a central bank or a foreign supervisory authority having the responsibility of
carrying out supervisory functions in respect of money laundering or terrorism financing,
proposes to conduct an inquiry, audit or inspection of a branch or a subsidiary of such
financial institution in Mauritius or to conduct such other action that would involve the duty
of confidentiality imposed under this section, he shall obtain the prior written authorisation of
the central bank and be subject to the duty of confidentiality imposed under this section and
any conditions that the central bank may impose before information of a confidential nature
be made available to him.

(8A) (a) A financial institution shall seek the prior approval of the central bank
before providing any confidential information to any person who intends to carry out due
diligence on the financial institution with a view to acquiring a shareholding in the financial
institution.

(b) Any person involved in the due diligence exercise under paragraph (a) shall –

(i) make a declaration of confidentiality before the chief executive

officer or deputy chief executive officer of the financial
institution in the form set out in the Second Schedule;

(ii) take an oath of confidentiality in the manner set out in

subsection (1)(a)(ii); or

(iii) comply with subsection (1)(aa) with such adaptations and

modifications as may be necessary.

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 (9) The Director-General under the Prevention of Corruption Act 2002, the Chief
Executive of the Financial Services Commission established under the Financial Services Act
2007, the Commissioner of Police, the Director-General of the Mauritius Revenue Authority
established under the Mauritius Revenue Authority Act, the Enforcement Authority under the
Asset Recovery Act 2011, or any other competent authority in Mauritius or outside Mauritius
who requires any information from a financial institution relating to the transactions and
accounts of any person, may apply to a Judge in Chambers for an order of disclosure of such
transactions and accounts or such part thereof as may be necessary.

(10) The Judge in Chambers shall not make an order of disclosure unless he is
satisfied that -

(a) the applicant is acting in the discharge of his or its duties;

(b) the information is material to any civil or criminal proceedings,

whether pending or contemplated or is required for the purpose of any
enquiry into or relating to the trafficking of narcotics and dangerous
drugs, arms trafficking, offences related to terrorism under the
Prevention of Terrorism Act 2002 or money laundering under the
Financial Intelligence and Anti-Money Laundering Act 2002; or

(c) the disclosure is otherwise necessary, in all the circumstances.

(11) Subject to the other provisions of this Act, the central bank or any person
making an inspection or conducting an examination for it under Part V shall not reveal,
unless required by a court so to do, to any person any information in relation to the affairs of
a customer obtained in the course of an inspection made or of an examination conducted
under Part V.

(12) Notwithstanding subsection (11), the central bank may disclose to the auditor
of a financial institution any information received under or for the purposes of this Act where
it considers that disclosing the information would enable or assist it in the discharge of its
supervisory responsibilities.

(13) The central bank may publish at such times as it may determine, information
or data furnished under this Act provided that the information or data do not disclose the
particular financial situation of any financial institution or customer, unless the consent of the
financial institution or the customer, as the case may be, has been specifically obtained.

(14) Nothing in this section shall preclude the disclosure of information by the
central bank, under conditions of confidentiality, and subject to the satisfaction of such
conditions as the central bank may determine -

(a) to a central bank or any other entity or agency, by whatever name

called, which performs the functions of a central bank in a foreign
country for the purpose of assisting it in exercising functions
corresponding to those of the central bank under this Act;

(b) to Statistics Mauritius, to enable the Director of Statistics Mauritius to

discharge, or assist him in discharging, any of his functions under the
Statistics Act;

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 (c) to a domestic or foreign supervisory authority where the information is
required by the supervisory authority for the sole purpose of carrying
out its supervisory functions in respect of money laundering or
terrorism financing.

(15) This section shall be without prejudice to the obligations of Mauritius under
any international treaty, convention or agreement and to the obligations of the central bank
under any concordat or arrangement or under any existing or future memorandum of
understanding for cooperation and exchange of information between the central bank and the
Financial Services Commission established under the Financial Services Act 2007, or
between the central bank and any other foreign regulatory agency performing functions
similar to those of the central bank.

(16) In the event of any conflict or inconsistency between any provision of this
section and the provisions of any other enactment, other than the Bank of Mauritius Act
2004, section 11(5)(a) of the Commissions of Inquiry Act, the Financial Intelligence and
Anti-Money Laundering Act 2002, sections 123, 123D and 124 of the Income Tax Act and
the Mutual Assistance in Criminal and Related Matters Act 2003, the provisions of this
section shall prevail.

PART VIIIA – PREVENTION OF MONEY LAUNDERING AND TERRORISM

FINANCING

64A. Programmes against money laundering and terrorism financing

(1) (a) Every financial institution and every holder of a licence, including its
branches and subsidiaries, shall implement programmes against money laundering and
terrorism financing, which are commensurate with the money laundering and terrorism
financing risks to which it or he is exposed and the size of its or his business.

(b) The programmes referred to in paragraph (a) shall include the

following internal policies, procedures and controls –

(i) compliance management arrangements, including the

appointment of a compliance officer at management level;

(ii) screening procedures to ensure high standards when hiring

officers;
(iii) ongoing training programmes for its or his directors and
officers; and

(iv) an independent audit function to test the programme.

(2) (a) Every financial institution and every holder of a licence, including its
branches and subsidiaries, operating in a group structure shall implement group-wide
programmes against money laundering and terrorism financing.

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 (b) The group-wide programmes referred to in paragraph (a) shall include –

(i) the internal policies, procedures and controls referred to in

subsection (1)(b);

(ii) policies and procedures for sharing information required for the
purposes of customer due diligence and money laundering and
terrorism financing risk management;

(iii) procedures to ensure that group level compliance, audit and

anti-money laundering and combating the financing of
terrorism functions shall have the power to request customer,
account and transaction information from branches and
subsidiaries, as necessary to perform their functions in order to
combat money laundering and terrorism financing;

(iv) the provision by group level functions to branches and

subsidiaries, of information and analysis of transactions or
activities which appear unusual when relevant and appropriate
to risk management; and

(v) adequate safeguards on the confidentiality and use of

information exchanged, including safeguards to prevent
tipping-off.

64B. Customer due diligence information

(1) The central bank may, from time to time, issue such guidelines, directives or
instructions to any financial institution, class of financial institutions or holder of a licence, as
the central bank considers necessary for the prevention of money laundering or terrorism
financing, which may provide for –

(a) customer due diligence measures to be undertaken by financial

institutions or holders of a licence to prevent money laundering and the
financing of terrorism;

(b) an on-going duty to keep customer due diligence information up to

date in respect of both new and existing customers; and

(c) the keeping of records for the purpose of paragraphs (a) and (b).

(2) A financial institution or holder of a licence which or who fails to comply with
any guideline, directive or instruction issued to it under subsection (1) shall commit an
offence and shall, on conviction, be liable to a fine not exceeding 10 million rupees and, in
the case of a continuing offence, to, after conviction, a further fine of 100,000 rupees for
every day or part of a day during which the offence continues.

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64C. Examination of financial institutions or holders of licence

(1) (a) The central bank may, from time to time, conduct an examination of
the operations and affairs of every financial institution or holder of a licence to assess
whether the financial institution or holder of a licence is complying with the guidelines,
directives or instructions issued under section 64B.

(b) Paragraph (a) shall apply to any affiliate, subsidiary, branch, agency or
office outside Mauritius of the financial institution or holder of a licence incorporated or
established in Mauritius.

(2) Sections 42 to 45 shall apply to an examination carried out under subsection

(1) with such modifications, adaptations and exceptions as may be necessary.

(3) The frequency and intensity of an examination conducted under this section
shall be determined on the basis of –

(a) the money laundering or terrorism financing risks and the policies,
internal controls and procedures associated with the financial
institution or holder of a licence or its group, as identified by the
central bank’s assessment of the institution’s or group’s risk profile;

(b) the money laundering or terrorism financing risks present in Mauritius;

and

(c) the characteristics of the financial institution or holder of a licence or

its group, in particular the diversity and number of financial
institutions or holder of a licence and the degree of discretion allowed
to them under the risk-based approach implemented by the central
bank.

(4) The central bank shall review the assessment of the money laundering or
terrorism financing risk profile of a financial institution or holder of a licence or group,
including the risks of non-compliance, periodically and when there are major events or
developments in the management and operations of the financial institution, holder of a
licence or its group.

64D. Confidentiality of examination reports

(1) Where a written report is made in respect of a financial institution or holder of

a licence by the central bank following an examination conducted pursuant to section 64C,
the report shall, subject to subsection (2), not be disclosed to any person by –

(a) the financial institution or holder of the licence; or

(b) any officer or auditor of the financial institution or holder of the

licence.

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 (2) The report referred to in subsection (1) may be disclosed –

(a) by the financial institution or holder of the licence to any officer or

auditor of that financial institution or holder of that licence solely in
connection with the performance of the duties of the officer or auditor,
as the case may be, in that financial institution;

(b) by any officer or auditor of the financial institution or holder of the

licence to any other officer or auditor of that financial institution or
holder of that licence, solely in connection with the performance of
their respective duties in that financial institution or as an officer of the
holder of that licence;

(c) with the approval of the central bank, to the head office or the holding
company of the financial institution, whether in or outside Mauritius,
for the purpose of conducting centralised functions of audit, risk
management or compliance; or

(d) to such other person as the central bank may approve in writing.

(3) In granting approval for any disclosure under subsection (2)(c), the central
bank may impose such conditions or restrictions as it thinks fit on the financial institution or
holder of the licence, any officer or auditor of that financial institution or holder of that
licence or the person to whom disclosure is made, and that financial institution, the holder of
that licence, officer, auditor or person, as the case may be, shall comply with those conditions
or restrictions.

(4) The obligations of an officer or auditor under subsections (1) and (3) shall
continue after the termination or cessation of the employment or appointment of the officer or
auditor by the financial institution or holder of the licence.

(5) Any person who contravenes subsection (1), or fails to comply with any
condition or restriction imposed by the central bank under subsection (3), shall commit an
offence and shall, on conviction, be liable –

(a) in the case of an individual, to a fine not exceeding 500,000 rupees and
to imprisonment for a term not exceeding 3 years; or

(b) in any other case, to a fine not exceeding one million rupees.

(6) Any person to whom the report referred to in subsection (1) is disclosed and
who knows or has reasonable grounds to believe, at the time of the disclosure, that the report
was disclosed to him in contravention of subsection (1) or who is in possession of the report
without reasonable justification, shall commit an offence and shall, on conviction, be liable –

(a) in the case of an individual, to a fine not exceeding 500,000 rupees and
to imprisonment for a term not exceeding 3 years; or

(b) in any other case, to a fine not exceeding one million rupees.

80
 (7) Where a person is charged with an offence under subsection (6), it shall be a
defence for the person to prove that –

(a) the disclosure was made without the person’s consent;

(b) where the disclosure was made in any written or printed form, he, as
soon as practicable, took all reasonable steps to surrender the report
and all copies of the report to the central bank; and

(c) where the disclosure was made in an electronic form, he, as soon as
practicable, took all reasonable steps to ensure that all electronic copies
of the report were deleted and that the report and all copies thereof in
other forms were surrendered to the central bank.

PART IX - CONSERVATORSHIP

65. Appointment of conservator

Where the central bank deems it necessary in order to protect the assets of a financial
institution for the benefit of its depositors and other creditors, it may appoint a conservator,
which may be the central bank or any other person directed by the central bank to be
conservator, if the central bank has reasonable cause to believe that -

(a) the capital of the financial institution is impaired or there is a threat of such
impairment; or

(b) the financial institution has, or its directors have -

(i) engaged in practices detrimental to the interests of its depositors;

(ii) knowingly or negligently permitted its chief executive officer, any of

its other managers, officers or employees or agents to violate any
provision of the banking laws, any enactment relating to anti-money
laundering or prevention of terrorism or directives, guidelines and
instructions issued by the central bank; or

(c) actions or violations referred to in paragraph (b)(ii) are about to occur, or the
assets of the financial institution are not sufficient to give adequate protection
to the bank’s depositors or creditors.

66. Powers and duties of conservator

(1) The conservator shall take charge of the financial institution and all of its
property, books, records and effects and shall exercise all powers necessary to preserve,
protect and recover any of the assets of the financial institution, collect all monies and debts
due to it, assert causes of action belonging to the financial institution and file, prosecute and
defend suits on its behalf.

(1A) The conservator shall have all the powers of the shareholders, directors
and officers of the financial institution and may operate the financial institution in its own
name unless otherwise specified by the Board.

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 (1B) The conservator may, with the approval of the Board –

(a) succeed to all rights, titles, powers and privileges of the financial
institution or any of its shareholders with respect to the financial
institution and its assets; and

(b) without the approval or consent of the financial institution, offer the
assets or shares of the financial institution for sale.

(2) The conservator may -

(a) overrule or revoke actions of the board of directors and management of

the financial institution; or

(b) suspend the powers of the board of directors of the financial institution
during the period of the conservatorship.

(3) The conservator may -

(a) subject to subsection (4), suspend, in whole or in part, the repayment

or withdrawal of deposits and other liabilities of the financial
institution;

(b) subject to subsection (5), disaffirm or repudiate any contract or lease to

which the financial institution is a party other than a financial contract
such as a securities contract, forward contract, repurchase agreement,
swap agreement or other similar agreement that the Board determines
to be a financial contract for the purposes of this provision;

(c) enforce any contract, other than a financial contract, entered into by the
financial institution, notwithstanding any provision of the contract
providing for termination, default or acceleration by reason of
insolvency or the appointment of a conservator;

(d) execute any instrument in the name of the financial institution; or

(e) initiate, defend and conduct in its name any action or proceedings to
which the financial institution may be a party.

(4) Any deposit and other credits received while the financial institution is under
conservatorship shall not be subject to any limitation as to repayment or withdrawal but shall
be segregated and not used to liquidate any indebtedness of the financial institution existing
at the time the conservator was appointed or subsequent indebtedness incurred in order to
discharge such indebtedness.

(5) The conservator may disaffirm or repudiate a financial contract that, in his
opinion, is fraudulent.

(6) The conservator, where it is not the central bank itself, shall report to and be
responsible to the Board.

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67. Term of office and remuneration of conservator

(1) The term of office of the conservator shall continue, unless replaced by a
successor, until such time as the Board finds that -

(a) the financial institution is rehabilitated or reorganised, so that it may be

returned to management or a new management under such conditions
as are necessary to prevent recurrence of the conditions that gave rise
to the conservatorship; or

(b) the financial institution is in such condition that its continuance in

business would involve probable loss to its depositors and other
creditors, in which case Part XI shall apply.

(1A) Notwithstanding subsection (1), a financial institution shall not be placed

under conservatorship for more than 180 days unless the Board determines otherwise.

(2) The remuneration of the conservator and the indemnification of the

conservator from liability to third persons on account of all actions taken in good faith shall
be borne by the financial institution.

68. Resumption of office by directors upon conclusion of conservatorship

(1) Subject to subsection (2), every director of the financial institution shall return
to his office following the conclusion of the conservatorship.

(2) Subsection (1) does not apply to a director who has, after conclusion of the
conservatorship, been found by the central bank to cease to be a fit and proper person for a
directorship.

69. Rehabilitation or reorganisation of financial institution

(1) The conservator shall seek authority from the Board to -

(a) rehabilitate the financial institution and return it to management; or

(b) reorganise the financial institution in accordance with this Part.

(2) Where the Board authorises the conservator to proceed to reorganise the
financial institution, the conservator shall, after granting a hearing to all interested parties,
propose a reorganisation plan and send a copy of it to all depositors and other creditors who
shall not receive full payment under the plan.

(3) The copy of the reorganisation plan shall be accompanied by a notice stating
that where the reorganisation plan is not refused in writing within a period of 30 days by
persons holding not less than one-third of the aggregate amount of deposits and creditors
comprising not less than one-third in value of the aggregate of the claims of creditors other
than subordinated creditors, the conservator shall, with the approval of the Board, proceed to
carry out the reorganisation plan.

(3A) Where the reorganisation plan is refused in writing within a period of 30 days
by persons holding not less than one third of the aggregate amount of deposits and creditors
comprising not less than one third in value of the aggregate of the claims of creditors other
83
than subordinated creditors, the conservator may, subject to subsection (3), propose another
reorganisation plan to all depositors and other creditors who shall not receive full payment
under the plan.

(4) The approval of a reorganisation plan by the Board shall be subject to its
finding that the reorganisation plan shall -

(a) be equitable under the circumstances, to depositors, other creditors and

shareholders;

(b) provide for bringing in new funds so as to establish adequate ratios

between -
(i) capital and deposits;
(ii) capital and risk assets;
(iii) liquid assets and deposits; and

(c) provide for the removal of any director, chief executive officer,
manager, officer or employee responsible for the circumstances which
necessitated the appointment of the conservator.

(5) Where in the course of reorganisation it appears that circumstances render the
plan inequitable or its execution undesirable, the conservator may recommend to the Board to
order the compulsory liquidation of the financial institution in accordance with Part XI.

PART X - VOLUNTARY LIQUIDATION

70. Procedures to go into voluntary liquidation

(1) Notwithstanding any other enactment, any financial institution which proposes
to go into voluntary liquidation shall obtain the authorisation of the Board.
(2) The Board may, where -
(a) the financial institution is solvent and has sufficient liquid assets to
repay its depositors and other creditors without delay; and
(b) the proposed liquidation has been approved by shareholders
representing three-quarters of the voting rights at a meeting called
expressly for this purpose,
authorise the financial institution to go into liquidation.

(3) Where the financial institution has received the authorisation of the Board
under subsection (2), it shall -

(a) immediately cease to do business, retaining only the powers to do the

necessary business for the purpose of effecting an orderly liquidation;

(b) repay its depositors and other creditors;

84
 (c) wind up all operations undertaken prior to the receipt of the
authorisation.

(4) The procedures for voluntary liquidation shall be in accordance with the
relevant sections and Parts of the Insolvency Act 2009 and those sections and Parts shall
apply to the extent that they are consistent with the provisions of this Part.

71. Notice and publication of voluntary liquidation

The financial institution shall -

(a) not later than 30 days from the receipt of an authorisation under section 70,
send by mail a notice of voluntary liquidation, specifying such information as
the central bank may prescribe, to all depositors, other creditors, and persons
otherwise entitled to the funds or property held by the financial institution as a
fiduciary, lessor of a safe deposit box, or bailee;
(b) post a notice of voluntary liquidation conspicuously on the premises of each
office and branch of the financial institution; and
(c) give publication of the voluntary liquidation in such manner as the central
bank may direct.

72. Rights of depositors and creditors

(1) The authorisation to go into voluntary liquidation shall not prejudice the rights
of a depositor or other creditor to payment in full of his claim nor the right of an owner of
funds or other property held by the financial institution to the return thereof.

(2) All lawful claims shall be paid promptly and all funds and other property held
by the financial institution shall be returned to their rightful owners within such maximum
period as the central bank may prescribe.

73. Distribution of assets

(1) Where, in the opinion of the central bank, the financial institution has
discharged all of its obligations, its licence shall be revoked and the remainder of its assets
shall be distributed among its shareholders in proportion to their respective rights.

(2) No distribution shall be made before -

(a) all claims of depositors and other creditors have been paid or, in the
case of a disputed claim, before a financial institution has turned over
to the central bank, or to any other person proposed by the liquidating
financial institution and approved by the central bank, sufficient funds
to meet any liability that may be judicially determined;

(b) any funds payable to a depositor or other creditor who has not claimed
them have been turned over to the central bank or to any other person
proposed by the liquidating financial institution and approved by the
central bank;

(c) any other funds and property held by the financial institution that could
not be returned to the rightful owners in accordance with section 72

85
 have been transferred to the central bank, or to any other person
proposed by the liquidating financial institution and approved by the
central bank, together with the relevant inventories.

(3) Any funds or property not claimed within a period of 10 years following their
transfer shall be presumed to be abandoned funds or property and shall be dealt with as
determined by the Board.

74. Insufficient assets

Where the central bank finds that the assets of a financial institution whose voluntary
liquidation has been authorised shall not be sufficient for the full discharge of all of its
obligations or that completion of the voluntary liquidation is unduly delayed, it shall appoint
any person as receiver, to take possession of the financial institution and commence
proceedings leading to its compulsory liquidation in conformity with the procedures specified
in Part XI.

PART XI - COMPULSORY LIQUIDATION

75. Board to appoint a receiver

The Board shall, notwithstanding any other enactment, appoint any person as receiver
to take possession of a financial institution where -

(a) the capital of the financial institution is impaired or its condition is otherwise
unsound;

(b) the ratio of its capital to total assets is less than 2 per cent;

(c) the business of the financial institution is being conducted in an unlawful,

unsafe or unsound manner;

(d) the continuation of the activities of the financial institution is detrimental to

the interests of its depositors;

(e) the licence of the financial institution has been revoked.

76. Notice of appointment of receiver

(1) Where the receiver takes possession of a financial institution, he shall post on
the premises of the financial institution a notice announcing its action under this Part and the
time when such possession shall be deemed to take effect which shall not be earlier than the
posting of the notice.

(2) A copy of the notice shall be transmitted to the Bankruptcy Court.

77. Duties of receiver

The receiver shall -

(a) commence proceedings leading to compulsory liquidation of the assets of the

financial institution;

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 (b) take such other measures as it thinks fit in accordance with section 78 in
respect of a financial institution of which it has taken possession within a
period of not more than 30 days from the date of the taking of possession; or

(c) terminate the taking of possession.

78. Powers of receiver

(1) After entering into possession of a financial institution, the receiver may -
(a) manage and control the financial institution;
(b) discontinue its operations;
(c) stop or limit the payment of its obligations;
(d) employ any necessary staff;
(e) execute any instrument in the name of the financial institution;

(f) initiate, defend and conduct in its name any action or proceedings to
which the financial institution may be a party; and

(g) -

(h) liquidate or take such other measures as it thinks fit under this section.

(2) The receiver shall succeed to all rights, titles, powers and privileges of the
financial institution, of any shareholder, account holder, depositor, officer, or director of the
financial institution with respect to it and its assets.

(3) The receiver may, with the approval of the Board under section 79 -

(a) merge or consolidate a financial institution with any other financial

institution;

(b) transfer any asset or liability of the financial institution; or

(c) without the approval or consent of the financial institution, offer the
assets or shares of a financial institution for sale to the central bank or
as security for loans from the central bank.

79. Powers of central bank under this Part

(1) The central bank may, at the direction of its Board -

(a) confirm and facilitate the actions of the receiver under section 78;
(b) purchase any assets of the financial institution or assume any of its
liabilities; and
(c) make loans to any other financial institution merging or consolidating
with or assuming the liabilities and purchasing the assets of the
financial institution.

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 (2) The central bank may provide any investor acquiring control of, merging with,
consolidating with or acquiring the assets of a financial institution with the financial
assistance that it is authorised to provide under this section.

(3) The central bank may, pending such further action as is contemplated under
subsection (1) or (2), grant a licence for the operation of a temporary financial institution for
not more than 2 years.

(4) The temporary financial institution may -

(a) assume such deposits and other liabilities; and
(b) purchase such assets of a financial institution that becomes subject to
this Part,

as the central bank thinks fit.

(5) The board of directors of the temporary financial institution shall be appointed
by and be responsible to the central bank.

(6) In determining the course of action to be taken in any given case, the Board
shall have regard to -

(a) the financial implications thereof, and any funds that it may administer
in order to protect depositors, taking into consideration the ultimate
viability of the temporary financial institution;

(b) the convenience to the community in maintaining banking facilities;

and

(c) the tendency to create a monopoly or to restrict competition in the area

served.

79A. Licensing of temporary financial institution

(1) An application for a licence to operate as a temporary financial institution

shall be made in such form and medium as the central bank may determine.

(2) An application made under subsection (1) shall be accompanied by such

information as the central bank may determine.

(3) The central bank may, following the determination of an application under
subsection (1), grant or refuse the application.

(4) The central bank shall give notice of its determination to the applicant within
15 working days of the receipt of a complete application under subsection (1) or the supply of
any supplementary information called for by the central bank.

(5) Where the central bank grants a licence under this section, it shall notify the
applicant in writing within 7 days of its decision, and shall issue a licence to the temporary
financial institution.

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 (6) The licence under subsection (5) shall –

(a) specify the name of the licensee; and

(b) be subject to such terms and conditions as the central bank may
impose.

(7) The temporary financial institution shall comply with such prudential
requirements as the central bank may specify.

(8) The central bank may, by guidelines, instructions or directives, require the
temporary financial institution to comply with such provision of this Act as it considers
appropriate so as to ensure effective supervision of the temporary financial institution.

(9) The central bank may cause an inspection of the operations and affairs of a
temporary financial institution to be made by its officers or such other duly qualified person
as it may appoint so as to assess whether the temporary financial institution complies with the
banking laws and any guidelines, instructions or directives issued by the central bank.

(10) Any person who contravenes this section shall commit an offence and shall,
on conviction, be liable to a fine not exceeding one million rupees and to imprisonment for a
term not exceeding 5 years.

80. Receiver taking possession of financial institution

(1) Where the receiver has taken possession of a financial institution -

(a) any term, statutory, contractual or otherwise, on the expiration of

which a claim or right of the financial institution would expire or be
extinguished shall be extended by 6 months from the date of the taking
of possession;

(b) any attachment or lien, other than a lien existing 6 months prior to the
taking of possession of the financial institution, shall be vacated and no
attachment or lien, other than a lien created by the receiver in the
application of these provisions, shall attach to any of the property or
assets of the financial institution so long as such possession continues;
and

(c) subject to subsection (2), any transfer of an asset of the financial

institution made after or in contemplation of its insolvency or the
seizure of the assets with intent to effect a preference within 5 years
thereof shall be void.

(2) The receiver may recover the asset transferred or its value from the initial
transferee or any subsequent transferee other than a transferee who has acquired the asset for
value in good faith.

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81. Execution against assets of a financial institution

No execution shall be returned against the seized assets of a financial institution

except, in the discretion of the Bankruptcy Court, an execution effected pursuant to a
judgment delivered prior to the date of the seizure for an amount not exceeding 100,000
rupees.

82. Further powers of receiver

(1) The receiver may -

(a) suspend, in whole or in part, the repayment or withdrawal of deposits

and other liabilities of the financial institution;

(aa) suspend or reduce, as from the date of his appointment or any

subsequent date, the right of creditors of the financial institution to
claim or receive interest on any money owing to them by that financial
institution;

(ab) cancel any agreement between the financial institution and any other
party to advance moneys becoming due after the date of the receiver’s
appointment, or cancel any agreement to extend any existing facility,
where –

(i) in the opinion of the receiver such advance or any loan under
such facility would not be adequately secured or would not be
repayable on terms satisfactory to the receiver;

(ii) the financial institution lacks the necessary funds to meet its
obligations under any such agreement; or

(iii) any such act would not otherwise be in the interests of the
financial institution;

(b) disaffirm or repudiate any contract or lease to which the financial

institution is a party other than a financial contract, such as securities
contract, forward contract, repurchase agreement, swap agreement or
other similar agreement that the Board determines to be a financial
contract for the purposes of this section;

(c) disaffirm or repudiate a financial contract that in his opinion is

fraudulent; or

(d) enforce any contract, other than a financial contract entered into by the
financial institution, notwithstanding any provision of the contract
providing for termination, default or acceleration by reason of
insolvency or the appointment of a receiver.

(2) The receiver shall, as soon as possible, take the necessary steps to terminate all
fiduciary functions performed by the financial institution, return all assets and property held
by the financial institution as a fiduciary to the owner thereof, and settle its fiduciary
accounts.
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83. Inventory of assets

(1) The receiver shall, as soon as possible after taking possession, make an
inventory of the assets of the financial institution and transmit a copy thereof to the
Bankruptcy Court.

(2) A copy of the inventory shall be available for examination by interested

parties at the Bankruptcy Court.

(3) The receiver shall not later than 120 days after his appointment, send by mail,
at the address shown on the financial institution’s books, to all depositors, other creditors,
safe deposit box lessees, and the bailors of property held by the financial institution, a
statement of the nature and amount for which their claim is shown on the financial
institution’s books.

(4) The statement shall note that any objection shall be filed with the receiver
before a specified date not later than 60 days thereafter and shall invite safe deposit box
lessees and bailors to withdraw their property in person.

84. Safe deposit box

(1) Any safe deposit box the contents of which have not been withdrawn before
the date specified shall be opened in the manner specified by the receiver.

(2) The contents specified in subsection (1) and any unclaimed property held by
the financial institution as bailee, together with inventories pertaining thereto, shall be
deposited in the central bank or in such depository as the central bank may direct and shall be
kept for 10 years, unless claimed by the owner before the expiration of that period.

(3) On the expiration of the time specified in subsection (2), any funds or property
not claimed shall be presumed to be abandoned funds or property and shall be dealt with as
determined by the Board.

85. Receiver dealing with claims

(1) Within 60 days after the last day specified in the notice for the filing of claims,
the receiver shall -

(a) reject any claim where it doubts the validity thereof;

(b) determine the amount, if any, owing to each known depositor or other
creditor and the priority class of his claim under this Part;

(c) prepare for filing with the Bankruptcy Court a schedule of the steps
proposed to be taken; and

(d) notify each person whose claim has not been allowed in full and
publish once a week for 3 consecutive weeks, in a newspaper of
general circulation approved by the Bankruptcy Court, a notice of the
date and place where the schedule of the steps it proposes to take will
be available for inspection, and the date, which shall be not less than
30 days from the date of the third publication in the newspaper, on
which the receiver shall file the schedule with the Bankruptcy Court.
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 (2) Within 20 days after the filing of the schedule specified in subsection (1)(c),
any depositor, other creditor or shareholder, and any other interested party may file with the
receiver an objection to any step proposed.

(3) Any objection filed under subsection (2) shall be considered by the
Bankruptcy Court upon such notice to the receiver, and any interested parties as the court
may designate.

(4) Where an objection is sustained, the Bankruptcy Court shall direct that an
appropriate modification of the schedule be made.

(5) After filing the schedule, the receiver may make partial distribution to the
holders of claims which are undisputed or which have been allowed by the Bankruptcy Court,
on condition that a proper reserve is established for the payment of disputed claims.

(6) After all objections have been decided upon, the receiver shall make final
distribution.

86. Priority of claims

(1) Notwithstanding any other enactment, including the Code Civil Mauricien,
claims as set out hereunder against the general assets of a financial institution, shall be settled
in the following order of priority -

(a) necessary and reasonable costs, charges and expenses incurred by the
receiver, including his remuneration, in application of this Part;

(b) wages and salaries of officers and employees of the financial

institution in liquidation for the 3-month period preceding the taking
possession of the financial institution;

(c) taxes, rates and deposits owed to the Government of Mauritius;

(d) savings and time deposits not exceeding in amount 100,000 rupees per
account;

(e) other deposits;

(f) other liabilities.

(2) In the event of the winding up of a financial institution holding a banking

licence, section 91 shall apply.

(3) After payment of all other claims filed, with interest thereon at a rate to be
fixed by the receiver with the approval of the Bankruptcy Court, any remaining claims which
were not filed within the prescribed time shall be paid.

(4) Where the amount available for any class is insufficient to provide payment in
full, the amount shall be distributed pro rata among the members of that class.

(5) Any assets remaining after all claims have been paid shall be distributed
among all the shareholders in proportion to their participation.

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 (6) Unclaimed funds remaining after the final distribution shall be deposited by
the receiver in the central bank or in such depository as the central bank may direct and shall
be kept for 10 years, unless claimed by the owner before the expiration of that period.

(7) On the expiration of the period specified in subsection (6), any funds or
property remaining unclaimed shall be presumed to be abandoned funds or property and shall
be dealt with as determined by the Board.

87. Submission of audited accounts to Bankruptcy Court

(1) Where all assets have been distributed in accordance with this Part, the
receiver shall submit audited accounts to the Bankruptcy Court.

(2) On approval of the accounts by the Bankruptcy Court -

(a) the licence of the financial institution shall be revoked;

(b) the Registrar of Companies shall be notified; and

(c) the receiver shall be relieved of any liability in connection with the
liquidation.

88. Liquidation of a financial institution

On completion of the procedures provided under section 87, the Bankruptcy Court
shall declare the liquidation of the financial institution and shall terminate its juridical
existence in Mauritius.

89. Civil and criminal actions

The conservator or receiver or the central bank may bring a civil action against any
director, chief executive officer, manager, officer, employee, agent or independent contractor
of a financial institution for gross negligence or intentional wrong for damages caused to that
financial institution and may recommend to the Director of Public Prosecutions the criminal
prosecution of any such person.

PART XII - WINDING UP OF FINANCIAL INSTITUTIONS GENERALLY

90. Winding up of financial institutions

(1) The provisions of Sub-Part II of Part III, Part IV and Part VII of the
Insolvency Act 2009 and such regulations as may be prescribed shall apply in relation to the
winding up of a financial institution, where the provisions of Parts X and XI are not resorted
to, or any of the provisions of those Parts are not otherwise applicable.

(2) The amounts shown in the books of a financial institution as standing to the
credit of depositors shall, unless the liquidator shows that there is reason to doubt the entry,
be presumed to be proof of those amounts without further proof from the depositors.

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91. Priority of deposit liabilities

Subject to section 92, where a financial institution becomes unable to meet its
obligations or becomes insolvent or suspends payment, the assets of the financial institution
in Mauritius shall be available to meet all deposit liabilities of the financial institution in
Mauritius, and those deposit liabilities shall have priority over all unsecured liabilities of the
financial institution other than those expenses and debts specified in the Insolvency Act 2009
to have priority of claim over all other liabilities of the company in the event of a winding up.

92. Priority of deposit and other liabilities in case of winding up of a bank and non-
bank deposit taking institution

(1) Notwithstanding any other enactment, in the event of a winding up of a bank

and non-bank deposit taking institution, the deposit liabilities of the bank and non-bank
deposit taking institution shall be settled in the manner specified in subsection (2).

(2) All assets of the bank and non-bank deposit taking institution shall be
available to meet all deposit liabilities of the bank and non-bank deposit taking institution in
the following order of priority -

(a) deposit liabilities incurred by the bank and non-bank deposit taking
institution with non-bank and non-bank deposit taking institution
customers;

(b) deposit liabilities incurred by the bank and non-bank deposit taking
institution with other banks and non-bank deposit taking institutions;

(c) other liabilities of the bank and non-bank deposit taking institution.

(3) The deposit or other liabilities in each class specified in subsection (2) shall
rank in the order specified in that subsection but as between deposit or other liabilities of the
same class shall rank equally between themselves and shall be paid in full unless the assets of
the financial institution are insufficient to meet them in which case they shall be settled in
equal proportions between themselves.

(4) For the purposes of section 91 and this section, "deposit liabilities" means
sums of money paid on terms -

(a) under which they shall be repaid, with or without interest or at a

premium, and either on demand or at a time or in circumstances agreed
by or on behalf of the persons making the payments and the bank and
non-bank deposit taking institution receiving them;

(b) which are not referable to the provisions of property or services or to

the giving of security;

(5) For the purposes of subsection (4), money shall be paid on terms which are
referable to the provisions of property or services or to the giving of security only where -

(a) it is paid by way of advance or part-payment for the sale, hire or other
provision of property or services of any kind and shall be repayable
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 only in the event that the property or services is or are not in fact sold,
hired or otherwise provided;

(b) it is paid by way of security for payment for the provision of property
or services of any kind provided or to be provided by the bank and
non-bank deposit taking institution by whom or on whose behalf the
money is accepted; or

(c) it is paid by way of security for the delivery or return of any property,
whether in a particular state of repair or otherwise.

PART XIII - MISCELLANEOUS

93. Deposit insurance scheme

(1) There shall be established and maintained, in such manner as may be

prescribed, a deposit insurance scheme to provide insurance against the loss of part or all of
deposits in a bank in a manner that will contribute to the stability of the financial system in
Mauritius and minimize the exposure to loss.

(2) Without prejudice to the generality of the foregoing, regulations made under
subsection (1) shall set out the terms and conditions of the scheme which shall include -

(a) financing of the deposit insurance scheme through a deposit insurance

fund to which shall be credited premiums levied on banks and shall be
charged all costs associated with the payment of deposits, any
restructuring of banks to reduce or avert a threatened loss to the
scheme, or to pay cost of their liquidation;

(b) types of deposits covered and the ceiling of coverage;

(c) powers of the body administering the scheme; and

(d) administration of the scheme.

(3) The central bank may advance funds to the deposit insurance fund on such
repayment terms and conditions as it deems fit for the administration of the deposit insurance
scheme.

94. Derogations from articles 1659, 1660, 1661, 1673, 2087 and 2088 of the Code
Civil Mauricien for the purposes of repurchase transactions

(1) Pursuant to the second alinea of article 2094 of the Code Civil Mauricien and
notwithstanding any other enactment -

(a) articles 1659, 1660, 1661 and 1673 of the Code Civil Mauricien shall
not apply to commercial contracts involving purchases made with a
provision for repurchase of -

(i) Government securities;

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 (ii) Bank of Mauritius Bills; or

(iii) such other instruments as the central bank may specify,

among banks and such other financial institutions as the central bank
may specify; and

(b) articles 2087 and 2088 of the Code Civil Mauricien shall not apply to
securities given for the repurchase of instruments referred to in
paragraph (a).

(2) The central bank shall, by direction, specify the terms and conditions under
which repurchase transactions may be entered into.

95. Immunity

No action shall lie against the Government, the central bank, any officer or employee
of the central bank or any person acting under the direction of the central bank for anything
done or omitted to be done in good faith in the administration of this Act, or in the execution
of any powers or duties authorised or required under any other enactment that are relevant to
this Act.

96. Repealed

96A. Protection of customers of financial institutions

(1) For the purposes of discharging its functions, the central bank may develop
and promote such programmes and initiatives, where it thinks necessary in collaboration with
financial institutions or bodies representing the financial institutions, to inform and educate
customers or potential customers of financial products and financial services.

(2) Every financial institution, other than a cash dealer, shall appoint an officer to
deal with complaints and grievances from their customers.

(3) (a) Any customer of a financial institution who is aggrieved by any act or
omission of the financial institution may, subject to paragraph (b),
make a complaint in writing to the financial institution for remedial
action.

(b) The financial institution shall not entertain a complaint where it is

made more than 7 years from the date of the act or omission giving rise
to the complaint.

(4) (a) Any complaint made under subsection (3) shall be dealt with by the
financial institution in the manner and within such period as provided
for in the Ombudsperson for Financial Services Act 2018 or any
guideline, instruction or requirement issued thereunder.

(b) Where the complainant is dissatisfied with the reply or does not
receive a reply within the period referred to in paragraph (a), he may
refer the complaint to the Ombudsperson for Financial Services in the

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 manner provided for in the Ombudsperson for Financial Services Act
2018.

(5) Repealed

(6) The central bank may issue such instructions or guidelines as may be
necessary for the purposes of this section.

96B. Limitation of interest

(1) Notwithstanding articles 1154 and 2202-6 of the Code Civil Mauricien, where
the amount of the principal of a non-performing loan or credit facility granted in Mauritius
currency on or after 1 January 2014 in respect of an individual is outstanding and the interest,
in accordance with the contract between the bank or non-bank deposit taking institution and
the individual, is equal to the outstanding amount of the principal, only simple interest at the
prevailing Repo rate determined by the central bank shall be charged on the outstanding
balance of the principal.

(2) Notwithstanding section 16 of the Borrower Protection Act, no bank or non-

bank deposit taking institution shall, in respect of any individual, charge penalty interest at a
rate exceeding 2 per cent per annum above the normal interest rate chargeable under the
contract referred to in subsection (1).

(3) No penalty or interest on a penalty shall, in respect of an individual, be

charged by a bank or non-bank deposit taking institution, on the early repayment of any
outstanding amount of a loan taken by, or credit facility referred to in subsection (1) granted
to, that individual.

96C. Decision of United Nations Security Council

(1) The central bank may, from time to time –

(a) make such regulations –

(i) concerning any financial institution, class of financial

institutions or holder of a licence; or

(ii) relating to the activities of any financial institution, class of

financial institutions or holder of a licence; and

(b) issue such guidelines, directives or instructions to a financial

institution, class of financial institutions or holder of a licence,

as the central bank considers necessary in order to discharge, or facilitate the

discharge of, any obligation binding on Mauritius by virtue of a decision of the
United Nations Security Council.

(2) Notwithstanding any enactment or contract to which a financial institution or

holder of a licence is a party, the financial institution or holder of the licence to which
regulations made under subsection (1)(a) apply or which is bound by guidelines, directives or
instructions made under subsection (1)(b) shall comply with those regulations, guidelines,
directives or instructions, as the case may be.
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 (3) A financial institution or holder of a licence shall not, in carrying out any act
in compliance with the regulations, guidelines, directives or instructions made under
subsection (1), be treated as being in breach of any such enactment or contract.

(4) Except where a Court orders such disclosure, a financial institution or holder
of a licence shall not disclose the guidelines, directives or instructions issued under
subsection (1)(b) where the central bank notifies the financial institution that the central bank
is of the opinion that the disclosure of those guidelines, directives or instructions is against
the public interest.

(5) A financial institution or holder of a licence which –

(a) contravenes any regulations made under subsection (1)(a);

(b) fails or refuses to comply with guidelines, directives or instructions

issued to it under subsection (1)(b); or

(c) discloses a guideline, a directive or an instruction issued to it in

contravention of subsection (4),

shall commit an offence and shall, on conviction, be liable to a fine not

exceeding one million rupees.

97. Offences and penalties

(1) Any person who transacts banking business, Islamic banking business, digital
banking business, private banking business, deposit taking business, business of cash dealer,
without a licence, or, if applicable, the written authorisation from the central bank, shall
commit an offence and shall, on conviction, be liable to a fine not exceeding one million
rupees and to imprisonment for a term not exceeding 5 years.

(2) Any person who fails to comply with the requirements of the central bank
under section 43(2) shall commit an offence and shall, on conviction, be liable to a fine not
exceeding 500,000 rupees and to imprisonment for a term not exceeding 2 years.

(3) Any person who, without any valid reason, hinders or obstructs the central
bank in the exercise of its powers of special examination under section 43 shall commit an
offence and shall, on conviction, be liable to a fine not exceeding 100,000 rupees for each
day on which the offence occurs or continues and to imprisonment for a term not exceeding 2
years.

(4) Any person who knowingly furnishes any document or information which is
false or misleading in a material way or particular in relation to an application for a banking
licence under section 5 or to an application for a licence under section 14 shall commit an
offence and shall, on conviction, be liable to a fine not exceeding one million rupees and to
imprisonment for a term not exceeding 5 years.

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 (5) Any financial institution which -

(a) fails to display its licence in accordance with section 9 or 15; or

(b) fails to comply with section 57(7) or (8),

shall commit an offence, and shall, on conviction, be liable to a fine which shall not be less
than 10,000 rupees and not more than 50,000 rupees for each day on which the offence
occurs or continues.

(6) Any financial institution which opens or keeps open a new place of business,
closes or keeps closed an existing place of business or changes its location without the
approval of the central bank shall commit an offence.

(7) Any person who, without being licensed, or without written authorisation by
the central bank, under this Act -

(a) uses the word “bank”, “foreign exchange dealer”, “money-changer”

“deposit taking” or any of their derivatives in any language in the
description or title under which that person is carrying on his activities
in Mauritius;

(b) uses, as part of the name, description or title under which he carries on
his activities, any word or term likely to indicate the nature of his
activities to be those of a bank or any other financial institution;

(c) makes any representation or uses any word or term in any billhead,
letter, notice, advertisement or in any manner whatsoever indicating
that he is carrying on the activities of a bank or any other financial
institution,

shall commit an offence.

(8) Any director or senior officer who commits an offence under subsection (5),
(6) or (7) shall, on conviction, be liable to a fine which shall be not less than 25,000 rupees
for each day on which the offence occurs or continues.

(9) (a) Any bank or non-bank deposit taking institution which contravenes
section 23(2) shall commit an offence and shall, on conviction, be
liable to a fine not less than 10,000 rupees and not more than 50,000
rupees for each day on which the offence occurs or continues.

(b) Upon a conviction pursuant to paragraph (a), the Court shall, in

addition to the fine, order the bank or non-bank deposit taking
institution to pay to the central bank a charge at a rate of interest which
shall not be more than 3 times the legal rate of interest, calculated on -

(i) the amount by which the minimum holding of liquid assets

have been proved in Court to be deficient; and

(ii) the period over which the minimum holding of liquid assets has
been proved in Court to be deficient.
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 (c) The charge ordered to be paid under paragraph (b) may be recovered
by the central bank by deduction of any balance of, or money owing to,
the bank or non-bank deposit taking institution concerned, or as if it
were a civil debt.

(d) Paragraphs (b) and (c) shall apply notwithstanding anything to the
contrary in any other enactment.

(10) Any person who fails to comply with section 31 shall commit an offence and
shall, on conviction, be liable to a fine not exceeding one million rupees and to imprisonment
for a term not exceeding 5 years.

(11) Any financial institution which fails to comply with section 34(5), (6) or 35
shall commit an offence and shall, on conviction, be liable to a fine which shall be not less
than 10,000 rupees and not more than 50,000 rupees for each day on which the offence
occurs or continues.

(12) Any person who does not take the necessary corrective action mandated under
section 38 shall commit an offence and shall, on conviction, be liable to a fine which shall not
be less than 10,000 rupees and not more than 50,000 rupees for each day the offence occurs
or continues.

(13) Any financial institution or its affiliate which fails to produce any book or
other document or information required under section 44, shall commit an offence and shall,
on conviction, be liable to a fine which shall be not less than 10,000 rupees and not more than
50,000 rupees for each day on which the offence occurs or continues.

(14) Any financial institution or its affiliate which gives information or produces
any book or other document required under section 44, which is false in any material
particular shall commit an offence and shall, on conviction, be liable to a fine which shall be
not less than one million rupees and not more than 5 million rupees.

(15) (a) Where any financial institution has not taken the measures specified by
the central bank pursuant to section 45(1)(ii), it shall commit an
offence and shall, on conviction, be liable to a fine not exceeding
500,000 rupees in respect of each day on which the offence occurs or
continues and the director, chief executive officer, manager, officer,
employee or shareholder holding a significant interest responsible shall
commit an offence and shall, on conviction, be liable to a fine not
exceeding one million rupees and to imprisonment for a term not
exceeding 5 years.

(b) Where a financial institution or any of its directors, senior officers,

employees or shareholders holding a significant interest, fails to -

(i) cease or desist from actions and violations specified in a cease

and desist order issued by the central bank under paragraph (a)
of section 45(2);

100
 (ii) take such affirmative action, as is specified in the order, to
correct the conditions resulting from any such actions or
violations,

the financial institution or any of its directors, senior officers,

employees or shareholders, as the case may be, shall commit an
offence and shall, on conviction, be liable to a fine not exceeding 5
million rupees.

(c) Where a financial institution fails to comply with an order issued under
paragraph (b) of section 45(2), it shall commit an offence and shall, on
conviction, be liable to a fine not exceeding 5 million rupees.

(16) Any person who contravenes section 47 shall commit an offence and shall, on
conviction, be liable to a fine not exceeding one million rupees and to imprisonment for a
term not exceeding 5 years.

(17) Any director or senior officer who fails to comply with section 48, shall
commit an offence and shall, on conviction, be liable to a fine not exceeding one million
rupees and to imprisonment for a term not exceeding 5 years.

(18) Any bank which fails to comply with the requirements of section 50(2), 51(3),
51(4), 52(2), 52(6)(a) or 53 shall commit an offence and shall, on conviction, be liable to a
fine not less than 10,000 rupees and not more than 50,000 rupees for each day on which the
offence occurs or continues.

(19) Any financial institution which contravenes section 55 shall commit an

offence and shall, on conviction, be liable to a fine which shall be not less than one million
rupees and not more than 5 million rupees.

(20) Any person who contravenes section 64 shall commit an offence and shall, on
conviction, be liable to a fine not exceeding one million rupees and to imprisonment for a
term not exceeding 5 years.

(21) Any person who, being a director, chief executive officer, manager, officer,
employee or agent of a financial institution -

(a) makes, with intent to deceive, any false or misleading statement or

entry or omits any statement or entry in any book, account, report or
statement of the financial institution;

(b) obstructs an inspection or examination, by an officer of the central

bank or such other duly qualified person as it may authorise, of the
affairs of the financial institution or the proper performance by an
auditor of his duties under this Act;

(c) fails to take all reasonable steps to ensure compliance by the financial
institution with this Act; or

(d) is privy to any offence committed under this subsection and fails to
report it to a senior officer or, in the case of a director, to the Board of
the central bank,

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shall commit an offence and shall, on conviction, be liable to a fine not exceeding one million
rupees and to imprisonment for a term not exceeding 5 years.

(22) Any person who contravenes any provisions of this Act shall commit an
offence and shall -

(a) in the case of the offences referred to in the preceding subsections, be

liable, on conviction, to the penalties specified in those subsections;

(b) in any other case, be liable, on conviction, to a fine not exceeding

500,000 rupees and to a term of imprisonment not exceeding 2 years.

98. Prosecution for offence

No prosecution for an offence under this Act or any regulations made thereunder shall
be instituted except by or with the consent of the Director of Public Prosecutions.

99. Compounding of offences

(1) The central bank may, with the consent of the Director of Public Prosecutions,
compound any offence committed by a person under this Act which is prescribed as a
compoundable offence, where the person agrees in writing to pay such amount not exceeding
the maximum penalty specified for the offence, acceptable to the central bank.

(2) Every agreement to compound shall be final and conclusive and on payment
of the agreed amount, no further proceedings in regard to the offence shall be taken against
the person who agreed to the compounding.

(3) (a) The Bank may cause to be published, in such form and manner as it
thinks fit, a public notice setting out the particulars of the agreed amount under subsection
(1).

(b) A notice under subparagraph (a) shall not contain any information
which the Bank considers to be sensitive.

100. Directives, guidelines or instructions

(1) The central bank may make such directives, guidelines or instructions as it
thinks fit for the purposes of this Act.

(2) Any directives, guidelines or instructions made under subsection (1) shall
apply to all financial institutions or to one or more categories of financial institutions and
shall take effect on the date of their issue to the financial institutions or on such later date as
may be specified in the directives, guidelines or instructions.

(2A) Notwithstanding subsection (2), the central bank may issue specific
instructions to any financial institution and such instructions shall take effect on the date of
their issue to the financial institution or on such later date as may be specified in the
instructions.

(2B) The central bank may issue such guidelines, instructions or directives as it
may determine to ultimate and intermediate financial holding companies incorporated in
Mauritius which have, within the group, at least one subsidiary or joint venture or such other
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ownership structure as the central bank may determine, which is a bank or a non-bank
deposit-taking institution.

(2C) The central bank may, by guidelines, instructions or directives issued under
subsection (2B), require the ultimate and intermediate financial holding companies
incorporated in Mauritius which have, within the group, at least one subsidiary or joint
venture or such other ownership structure as the central bank may determine, which is a bank
or a non-bank deposit-taking institution, to comply with such specific provision of this Act as
it considers appropriate so as to ensure effective supervision of the institution.

(3) Any person to whom directives, guidelines or instructions are issued shall
comply with those directives, guidelines and instructions.

(4) Any person who fails to comply with the directives, guidelines or instructions
made under this section shall commit an offence and shall, on conviction, be liable to a fine
not exceeding one million rupees and, in the case of continuing offence, to, after conviction, a
further fine of 100,000 rupees for every day or part of a day during which the offence
continues and to imprisonment for a term not exceeding 2 years.

101. Regulations

(1) The Minister may -

(a) make such regulations as he thinks fit for the purposes of this Act;

(b) by regulations, prescribe the offences which shall be compoundable

offences for the purposes of section 99;

(c) by regulations, amend the Schedules, other than the Third Schedule.

(2) Any regulations made under this section may -

(a) provide for the payment of fees and the levying of charges; and

(b) provide that any person who contravenes them shall commit an offence
and shall, on conviction, be liable to a fine not exceeding 200,000
rupees and to imprisonment for a term not exceeding 3 years.

(3) Notwithstanding subsections (1) and (2), the central bank may, with the
approval of the Minister, make regulations for the purpose of prescribing any processing fee
or licence fee under section 7(7A) or 11A(3)(a) and (c) and of discharging or facilitating the
discharge of any obligation binding on Mauritius by virtue of a decision of the United Nations
Security Council.

102. Transitional provision

Any bank licensed before the commencement of section 4(b) of the Finance
(Miscellaneous Provisions) Act 2017 shall, on the commencement of that section, raise its
capital to not less than –

(a) 300 million rupees by 30 June 2018; and

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 (b) 400 million rupees by 30 June 2019.

103. Spent

104. Repeal and savings

(1) The following enactments are repealed -

(a) The Banking Act; and

(b) The Foreign Exchange Dealers Act.

(2) Notwithstanding the repeal of the enactments specified in subsection (1) -

(a) any licence or certificate issued, any approval given or authorisation

granted under the repealed enactments and in force on the date
immediately before the coming into operation of this Act shall be
deemed to have been issued, given or granted under this Act and any
such licence, certificate, approval or authorisation shall remain valid
for the period specified therein;

(b) any Category 1 Banking Licence or Category 2 Banking Licence

issued under the repealed enactment referred to in subsection (1)(a)
shall, on the commencement of this Act, be deemed to be a banking
licence issued under this Act;

(c) any licence fee paid under the repealed enactments referred to in
subsection (1) shall, on the commencement of this Act, be deemed to
have been paid under this Act for the remaining period to which it
applies;

(d) any guidelines or instructions issued by the central bank under the
repealed enactments and in force on the date immediately before the
coming into operation of this Act shall be deemed to have been issued
under this Act;

(e) all proceedings, judicial or otherwise under the repealed enactments

commenced before and pending on the date immediately before the
coming into operation of this Act shall be deemed to have been
commenced and may be continued under this Act;

(f) any act or thing done under the repealed enactments shall be deemed to
have been done under this Act.

105. Commencement

(1) Subject to subsection (2), this Act shall come into operation on a date to be
fixed by Proclamation.

(2) Different dates may be fixed for the coming into operation of different
provisions of this Act.

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 Passed by the National Assembly on the seventh day of September two thousand
and four.

Bhupendranath Dwarka
Deputy Clerk of the National Assembly

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 FIRST SCHEDULE
[Section 64(1)(a)]

OATH OF CONFIDENTIALITY

IN THE SUPREME COURT OF MAURITIUS

I, ......................................................................................................................, being appointed

...................................................... do hereby swear/solemnly affirm/declare* that I shall
maintain during or after my relationship with …………………………………………... the
confidentiality of any matter relating to the banking laws which comes to my knowledge in
my capacity as ……………………..…….. or in any other capacity with
………………………………. and shall not, on any account and at any time, disclose
directly or indirectly to any person, any matter or information relating to the affairs of
………………………………………….. otherwise than for the purposes of the performance
of my duties or the exercise of my functions under the banking laws or when lawfully
required to do so by a Judge in Chambers or any Court of law or under any enactment.

Signature of declarant ……..………………………

Taken before me, ……………………………………………..…………………………..., the

Master and Registrar of the Supreme Court on …………………………….. (date).

*Delete as appropriate

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 SECOND SCHEDULE
(Section 64(1)(a))

Declaration of confidentiality

I ...................................................................................................................... being appointed

....................................................... do hereby declare that I shall maintain during or after my
relationship with ……………………………………………………….... the confidentiality
of any matter relating to the banking laws which comes to my knowledge and shall not, on
any account and at any time, disclose directly or indirectly to any person, any matter or
information relating to the affairs of ………………………………………….. otherwise than
for the purposes of the performance of my duties or the exercise of my functions under the
banking laws or when lawfully required to do so by a Judge in Chambers or any court of law
or under any enactment.

Signature of declarant ……………………….

Made before me this ......................………………..

Signature ………………………………………...
Name ………………………………………………..
Chief Executive Officer/Deputy Chief Executive Officer

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 THIRD SCHEDULE

(Section 32A)

1. Where the central bank authorises the transfer of the whole or part of the undertaking
of a bank under section 32A –

(a) all assets and liabilities that form part of the undertaking of the transferor bank
on the day immediately before the appointed day and are listed in the final list
of assets and liabilities submitted to the Registrar-General under section
32A(8), shall, on the appointed day, vest in and continue to be the assets and
liabilities of the transferee bank, without the need for any further formality;

(b) the transferor bank shall, in respect of the transferred undertaking, on the
appointed day, be released from all liabilities and obligations that form part of
its undertaking on the day immediately before the appointed day;

(c) all proceedings started and pending by or against the transferor bank that form
part of the undertaking of the transferor bank on the day immediately before
the appointed day shall, in respect of the transferred undertaking, on the
appointed day, be continued by or against the transferee bank, and the
transferee bank shall, in respect of the transferred undertaking, be entitled to
all defences, claims, counterclaims and rights of set-off or compensation
which would have been available to the transferor bank in relation to such
proceedings;

(d) any ruling, order or judgment in favour of or against the transferor bank in
respect of the undertaking of the transferor bank on the day immediately
before the appointed day shall, in respect of the transferred undertaking, on the
appointed day, be enforceable by or against the transferee bank;

(e) any mortgage, privilege, charge, bond, pledge, guarantee or any other security
interest that form part of the undertaking of the transferor bank on the day
immediately before the appointed day and was made or given to secure past,
present and future advances, facilities or services by the transferor bank shall,
in respect of the transferred undertaking, on the appointed day, remain in full
force and be considered to be a mortgage, privilege, bond, pledge, guarantee
or instrument given to or in favour of the transferee bank, as security for past,
present and future advances, facilities or services by the transferee bank,
without the need for any further formality;

(f) every book, record and other document of the transferor bank that form part of
its undertaking on the day immediately before the appointed day shall, in
respect of the transferred undertaking, on the appointed day, vest in the
transferee bank.

2. (a) Every person who, in relation to the transferred undertaking, on the day
immediately before the appointed day, is employed by the transferor bank shall be entitled to
be transferred to the transferee bank on terms and conditions which shall be not less
favourable than those of his previous employment at the transferor bank.

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 (b) The period of service of every person employed by the transferor bank who is
transferred to the transferee bank shall be deemed to be an unbroken period of service with
the transferee bank.

(c) No person employed by the transferor bank shall, on account of his transfer to
the transferee bank or any resulting change in his job title, be entitled to claim that his
employment has been terminated or adversely affected in breach of any enactment.

(d) Any pension or similar scheme operated by the transferor bank for the benefit
of its employees on the day immediately before the appointed day shall, as from the
appointed day, be operated by the transferee bank.

3. (a) Subject to paragraph (b), every person who is a shareholder of the transferor
bank on the day immediately before the appointed day –

(i) shall, on the appointed day, be considered to hold in the transferee

bank a number of shares representing his proportionate share of the net
asset value that the transferred undertaking bears to the net asset value
of the transferee bank following the completion of the transfer; or

(ii) may exercise his right to require the transferor bank to purchase his
shares in accordance with section 32A(5).

(b) Paragraph (a) shall be without prejudice to the right of any shareholder, other
than the Government, to cease to be a shareholder –

(i) of the transferor bank immediately before the appointed

day; or

(ii) of the transferee bank on or after the appointed day.

----

FOURTH SCHEDULE

(Repealed)

_______________

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