New Law on Banks Grants National Bank More Power to Regulate Financial Institutions
The National Bank of Macedonia has recently introduced significant changes to its regulatory powers with the new Law on Banks. This law grants the governor of the National Bank more authority to take measures against banks, bank groups, and bank authorities that violate regulations.
Increased Powers for the Governor
According to Article 132 of the Law, the governor can take corresponding measures if there is a violation of regulations related to money laundering prevention. In cases where a bank is involved in money laundering or other criminal offenses, the governor has the right to withdraw the permit for taking up and pursuit of business.
Efficiency in Addressing Banking Issues
The new law also allows the National Bank to pronounce misdemeanor sanctions without mediation by a court, increasing its efficiency in addressing issues within the banking system. The law applies to savings banks and branches of foreign banks operating in Macedonia as well.
Prevention of Money Laundering
In addition, the Council of the National Banks has adopted a decision on the manner and procedure for establishment and application of bank programs for prevention of money laundering and financing terrorism. This decision aims to strengthen the efficiency of applying such programs, especially in areas related to:
- Enhanced client due diligence
- Business relations with high risk
The decision also specifies the obligations of banks regarding creation of risk profiles based on relevant information and data about clients and business relationships. This approach allows for a more targeted application of client due diligence based on the degree of risk arising from money laundering and financing terrorism.
Amendments to Laws on Fast Money Transfer and Currency Exchange Operations
The Law on Fast Money Transfer has been amended, strengthening criteria for licensing providers of fast money transfer services. The governor can withdraw licenses in cases where there is evidence of non-compliance with laws related to money laundering prevention and other crimes.
Similarly, the Law on Currency Exchange Operations has been amended, defining conditions, manner, and procedure for obtaining licenses for currency exchange operations. Authorized currency exchange entities are required to possess a program for prevention of money laundering and financing terrorism. Failure to comply can result in license revocation.
Conclusion
The National Bank’s new powers and responsibilities aim to improve the efficiency and effectiveness of its regulation and supervision of financial institutions in Macedonia, ultimately strengthening the country’s banking system.