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Central Bank Issues Guidelines for Banking Licences

In an effort to strengthen the banking sector and ensure stability in the financial system, the Central Bank has issued new guidelines governing the grant and operation of banking licences.

Revised Regulations

Under the revised regulations, banks must demonstrate that their directors and senior officers have:

  • Technical knowledge
  • Experience in banking or finance
  • Are fit and proper persons to carry on the proposed banking business

The bank must also show:

  • Sufficient financial resources
  • An adequate capital structure to support its operations

The Central Bank will assess the applicant’s plans for the future conduct and development of the business, including:

  • Accounting systems
  • Internal control systems

Additionally, the bank must demonstrate its ability and willingness to comply with conditions imposed by the Central Bank under the banking laws.

Key Changes

• New requirement for banks to demonstrate technical knowledge, experience, and fitness of directors and senior officers • Increased scrutiny of applicant’s financial resources and capital structure • Stricter conditions on the grant of banking licences, including requirements for accounting and internal control systems • Mandatory prior approval from Central Bank for opening or closing branches, or changing location • Prohibition on banks engaging in business other than specified in licence

Comment

The revised guidelines are aimed at strengthening the banking sector and ensuring stability in the financial system. The new regulations will provide greater transparency and accountability in the granting of banking licences and operation of banks.

Industry experts have welcomed the move, stating that it will help to restore confidence in the banking sector and promote a more stable and resilient economy.

Source

The Central Bank has issued a statement confirming the introduction of the revised guidelines. The full text of the regulations can be accessed on the Central Bank’s website.