Central Bank’s Mandate Expanded: New Responsibilities and Powers
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The Central Bank of [Sultanate] has been granted additional powers and responsibilities by law, aimed at ensuring the stability and integrity of the financial system. This expansion of mandate is a significant development in the country’s banking sector.
Key Responsibilities
- Reviewing reports submitted by licensed banks
- Setting standards for foreign exchange transactions
- Regulating currency circulation
- Overseeing bank operations
- Withdrawing licenses or imposing sanctions on underperforming banks
- Exercising general administrative supervision over its own officers and employees
Expanded Mandate
The Central Bank’s new mandate includes:
- Reviewing applications from banks seeking to operate in the Sultanate
- Setting rates for foreign exchange transactions
- Regulating currency circulation
- Promulgating regulations related to currency control, including limits on foreign currency holdings by licensed banks
Penalties for Non-Compliance
In cases where a bank fails to comply with directives or policies of the Central Bank, it may face:
- License withdrawal
- Suspension
- Imposition of sanctions
- Disciplinary action against officers and employees
Bank Ownership Rules
The revised law includes new rules governing reorganization and change in control of licensed banks. Specifically:
- No licensed bank can amend its constitution or effect a change in its organization without obtaining prior approval from the Central Bank.
- The institution must ensure that its ownership structure is transparent and compliant with relevant laws and regulations.
Undercapitalization
In cases where a bank becomes undercapitalized, it is required to balance out its capital to meet the minimum requirements set by the Central Bank. Failure to do so may result in:
- Fines
- License cancellation
International Cooperation
The Central Bank will also represent the Sultanate in international financial and monetary agencies and participate in activities with other central banks and supranational organizations.
This expansion of mandate is a significant development in the country’s banking sector, aimed at ensuring the stability and integrity of the financial system.