Financial Crime World

CENTRAL BANK CLamps Down on Foreign Ownership of Local Financial Institutions

The Central Bank has issued new guidelines to regulate foreign ownership of local financial institutions in Grenada. The guidelines aim to ensure that these institutions remain stable, viable, and transparent.

Disclosure Requirements

  • No person shall hold five per cent or more of the total voting rights of a local financial institution without disclosing the beneficial owner of such shares.
  • Directors of local financial institutions are required to disclose any transfer made in violation of this provision to the Central Bank.
  • Anyone who knowingly acquires an interest in violation of this provision commits an offence.

Compliance and Enforcement

  • The Central Bank may issue an order requiring the divestment of so much of the offending interest as is necessary to secure compliance with the provisions.
  • The Minister, acting upon the recommendation of the Central Bank, has the power to revoke any licence to carry on banking business in Grenada if a licensed financial institution fails to comply with its licence conditions or measures required by the Central Bank.

Asset Transfer Restrictions

  • No financial institution shall transfer the whole or any substantial part of its assets or liabilities in Grenada without the approval of the Minister acting upon the recommendation of the Central Bank.
  • Foreign financial institutions must notify the Minister and the Central Bank of any amendment to their instrument or charter within sixty days of such amendment.

Appeal Process

  • A financial institution that is aggrieved by any decision made under the guidelines may appeal to the High Court within fourteen days of such decision.

Purpose of the Guidelines

The purpose of these new guidelines is to ensure that local financial institutions remain stable and viable, while also protecting the interests of depositors and the national interest. By regulating foreign ownership and requiring transparency, the Central Bank aims to maintain confidence in the financial system and safeguard the well-being of Grenada’s citizens.