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Banking Act 2015: Key Provisions

The Banking Act 2015 has been introduced to regulate the banking sector in Grenada and ensure that financial institutions operate in a safe and sound manner. The act defines key terms, outlines licensing requirements, and establishes penalties for non-compliance.

Definition of Significant Shareholding

A significant shareholding is defined as owning or controlling more than 10% of the shares or total voting rights of a licensed financial institution. This definition applies to both direct and indirect ownership.

Licensing Requirements

To carry on banking business in Grenada, a person must obtain a licence from the Central Bank. The licence application must include detailed information about the applicant’s organization, including its structure, ownership, and management.

Penalties for Non-Compliance

The act imposes severe penalties for non-compliance with licensing requirements. A person found to be carrying on banking business without a licence can face fines of up to $1 million or imprisonment for up to three years. Directors and officers of such companies can also face similar penalties.

Examination of Books and Records

The Central Bank has the power to examine the books and records of financial institutions to ensure compliance with licensing requirements. The bank can also appoint a receiver to manage the institution if it is found to be operating without a licence.

Repayment of Funds Obtained Without Licence

Financial institutions that have obtained funds by carrying on banking business without a licence must repay those funds in accordance with directions from the Central Bank.

Conclusion

The Banking Act 2015 aims to promote stability and confidence in the financial system of Grenada. It is an important step towards ensuring that financial institutions operate in a safe and sound manner, protecting the interests of depositors and investors.