Financial Crime World

Namibia’s Banking Industry Set to Embrace New Standards for Compliance

In a bid to strengthen the country’s financial sector, Namibia has introduced new standards for compliance in the banking industry. The Banking Institutions Act of 2023 (Act No. 13 of 2023) replaces two previous acts and aims to consolidate and amend laws relating to banking institutions, microfinance banking institutions, and controlling companies.

Key Provisions of the New Law

  • Authorizes individuals or entities to conduct business as a banking institution or microfinance banking institution
  • Regulates ownership and shareholding structures
  • Introduces recovery plans and prudential requirements
  • Establishes an Appeal Board to hear appeals against certain decisions made by the Bank of Namibia

Bylaws Issued Under the Banking Institutions Act

Circulars and Guidelines

  • Notices issued by the Bank of Namibia for promoting sound and prudent banking practices
  • Delivered directly to the principal officers of banking institutions

Determinations

  • Gazette notices issued by the Bank of Namibia on matters required or permitted by the Banking Institutions Act
  • Address issues necessary for determining the prudent conduct of banking business

Regulations

  • Gazette notices issued by the Minister of Finance on recommendation by the Bank of Namibia
  • Cover any matter required or permitted by the Banking Institutions Act

Other Bylaws

  • Secondary laws issued by the Bank of Namibia to ensure sound and prudent banking practices
  • Examples include guidelines and public Gazette notices

Bylaws Issued Under the Bank of Namibia Act

Directive on Minimum Reserve Requirement

  • Issued under the Bank of Namibia Act of 1997 and 2004
  • Sets out the minimum reserve requirements for commercial banks operating in Namibia

Registration of Building Societies

The Bank of Namibia is empowered to regulate and supervise building societies under the Building Societies Act of 1986 (Act 2 of 1986). Any person intending to register a building society must apply for authorization in terms of Section 4 of the Act.

Expected Outcomes

These new standards are expected to enhance compliance and stability within the banking industry, thereby protecting the interests of depositors. The Bank of Namibia has issued various bylaws and guidelines to support the implementation of these new regulations.