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Bank Regulation: Administrative Structure and Committees
The Central Payments Office has issued a new regulation to govern the administrative structure and committees of banks in East Timor. The regulation aims to ensure that banks are properly managed and supervised, and that they operate in a transparent and accountable manner.
Governing Board and Audit Committee
Under the regulation, each bank must have a governing board and an audit committee. The governing board is responsible for establishing policies for the operations of the bank and supervising their implementation. The audit committee is responsible for reviewing the bank’s financial statements and ensuring compliance with regulatory requirements.
Risk Management Committees
The regulation also requires banks to establish risk management committees to oversee credit appraisal, loan administration, and asset and liability management. Banks may also establish separate credit committees and asset and liability management committees to perform these functions.
Qualifications of Bank Administrators and Principal Shareholders
In addition, the regulation sets out guidelines for the qualifications of bank administrators and principal shareholders. It also provides for the disqualification and removal of bank administrators who are found to be unsuitable or who have engaged in unethical behavior.
Confidentiality and Secrecy
The regulation further requires banks to maintain secrecy regarding non-public information obtained during their operations. This includes customer account information, loan data, and other confidential information.
Prevention of Money Laundering
Finally, the regulation addresses the prevention of money laundering by requiring banks to report suspicious transactions and providing for penalties for banks that fail to comply with anti-money laundering regulations.
Key Provisions
- Each bank must have a governing board and an audit committee
- Banks must establish risk management committees to oversee credit appraisal, loan administration, and asset and liability management
- Bank administrators and principal shareholders must meet certain qualifications
- Banks must maintain secrecy regarding non-public information obtained during their operations
- Banks must report suspicious transactions and comply with anti-money laundering regulations
Penalties for Non-Compliance
Banks that fail to comply with the regulation may be subject to penalties, including fines and suspension or revocation of their banking license. The Central Payments Office has emphasized the importance of compliance with the regulation and will closely monitor banks’ activities to ensure that they are operating in a safe and sound manner.
Contact Us
For more information on the new regulation, please contact the Central Payments Office at [insert contact details].