Financial Crime World

BANKING BUSINESS ACT AMENDMENTS TO EXEMPT CERTAIN INSTITUTIONS FROM REGULATION

The Minister of Finance has announced significant amendments to the Banking Business Act, which will exempt certain financial institutions from regulation under the Act. This move is expected to promote financial inclusion and stability in Namibia.

Exemptions Under the Amendments

The amendments provide for exemptions from regulation under the Act for:

  • International banks and financial organizations
  • Building societies
  • Postal savings banks
  • National housing enterprises
  • Industrial development agencies
  • Co-operatives
  • Non-banking financial institutions whose business activities are regulated by law

Additional Powers Granted to the Minister

The Minister has been granted powers to:

  • Designate certain activities as excluded from the definition of “banking business” if they are performed in accordance with specified conditions
  • Determine the maximum amount that can be granted as a microloan by a microfinance banking institution through a notice in the Gazette
  • Exempt non-banking financial institutions from engaging in banking or microfinance business without written authorization from the Bank
  • Prescribe specific regulatory requirements for these institutions, which may differ from those applicable to banking and microfinance institutions regulated under the Act

Flexibility and Adaptability

The amendments also provide for:

  • The Minister’s power to remove or add institutions to the list of exempted entities through a notice in the Gazette
  • The application of provisions of the Act to certain institutions despite their establishing Acts
  • The withdrawal or amendment of such notices

Clarification on Deposits

A person who holds deposits for or on behalf of not more than 20 persons or an aggregate amount of N$500,000 excluding interest payable on the deposits will not be considered as accepting deposits.

Industry Reaction and Implementation

Industry players have welcomed the amendments, which they believe will promote financial inclusion and stability in Namibia. The Bank has been working closely with the Minister to ensure that the amendments align with international best practices and standards.

Timeline for Implementation

The amendments are expected to come into effect soon after publication in the Gazette.