Banking Act 1987: Overview of Key Provisions

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The Banking Act 1987 regulates banking activities in the Marshall Islands. Here’s a breakdown of its key provisions.

Appointment of Commissioner

• Commissioner Appointment: The President appoints a Commissioner with Cabinet concurrence to administer and enforce the Act.
• Employee Status: The Commissioner is an employee of the government and cannot hold other offices unless empowered by law or assigned by Cabinet.

Disqualifications for Appointment as Commissioner

• A person is disqualified from appointment if they are:
  • A member of the Nitijela
  • A judicial officer
  • An officer of the Attorney-General’s or Auditor-General’s office
  • A director, officer, employee, or shareholder of a licensed institution

Delegation of Powers and Duties

• The Commissioner can delegate powers and duties to other staff officers, subject to general or special directions.

Banking Licenses

• License Requirement: No banking business can be transacted in the Republic without a valid license from the Commissioner.
• Incorporation Approval: Corporations with names containing “bank,” “banking,” “savings,” or “savings and loan” must obtain approval from the Commissioner before incorporation.

Application Requirements

• Applications for licenses require submission of specific information, including:
  • Corporation name and address
  • Articles of incorporation and bylaws
  • Authorized and paid-up capital
  • Shareholder information
  • Director and officer information
  • Audited balance sheet
  • Auditor’s professional qualification