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Mauritius Banking Regulations: A Shield for Vulnerable Borrowers
In a bid to protect vulnerable borrowers from exploitative lending practices, the Government of Mauritius has implemented a robust regulatory framework governing moneylending activities in the country. The Financial Services Commission, a key body responsible for financial services regulation, has been entrusted with the supervision and licensing of moneylenders.
A Brief History
The Moneylenders Act 1959 was initially enacted to regulate moneylending practices in Mauritius. However, on December 21, 2018, the Financial Services (Money Lenders) Regulations 2018 came into force, replacing the existing legislation. The new regulations aim to provide a more comprehensive framework for the licensing and supervision of moneylenders.
Who Needs a Moneylending Licence?
- A Global Business Company (GBC) engaged or intending to engage in the business of moneylending in Mauritius must apply for a moneylending licence.
- However, if the GBC is solely engaged in the business of moneylending outside Mauritius, it will not require a licence.
License Requirements
To obtain a moneylending licence, applicants must: + Maintain a minimum stated unimpaired capital of MUR 30,000,000 (or its equivalent) or 5% of the moneylender’s total liabilities. + Register with the Money Credit Information Bureau (MCIB).
Inspections and Penalties
- The Financial Services Commission may appoint a duly qualified person or an officer to carry out inspections on the operations and affairs of moneylenders to ensure compliance with financial services laws and guidelines.
- Any contravention of the regulations can result in penalties, including:
- Fines not exceeding one million rupees
- Imprisonment for up to 5 years
Frequently Asked Questions
The Financial Services Commission has issued FAQs on moneylending licences to address queries and ensure effective supervision of moneylenders. Key questions have been clarified regarding: + GBCs engaged in the business of moneylending + Minimum capital requirements + Registration with the MCIB
Conclusion
Despite being a relatively small fraction of the credit market, moneylending remains a vital part of the economic structure. Licensing of moneylenders is crucial to protect vulnerable borrowers from exploitative lending practices and promote financial stability in the economy. The regulatory framework in place ensures ongoing access to credit for those who need it most, while promoting fair practices and financial stability.