Timor-Leste Takes Strong Step Towards Financial Sector Strengthening with New Banking Regulations

The United Nations Transitional Administration in East Timor (UNTAET) has announced a significant milestone in the country’s efforts to establish a robust financial system with the issuance of a new regulation on Bank Licensing and Supervision.

Objectives and Scope

The UNTAET Regulation No. 2000/8 aims to safeguard depositors, prevent systemic risks, and promote a competitive and sound banking sector in Timor-Leste. The regulations apply to all banks, their shareholders, administrators, employees, agents, and affiliated entities operating in the country.

Key Provisions

• Licensing Requirements: New banks must meet a minimum capital requirement of $2 million.
• Application Process: Applicants seeking to obtain a license must provide detailed information on their qualifications, business plans, financial statements, and other required documents.
• Central Payments Office: The Central Payments Office has been designated as the sole authority responsible for issuing bank licenses, setting minimum capital requirements, and determining the financial activities in which licensed banks can engage.

Benefits

The objectives of these measures are clear:

• Establish a legal framework for effective bank oversight
• Minimize fraudulent activities
• Ensure the stability of the financial sector
• Attract foreign investors
• Contribute to the development of a robust and competitive banking sector in Timor-Leste

Next Steps

For further information on the new regulations, interested parties are encouraged to contact the Central Payments Office or the United Nations Transitional Administration in East Timor.

This regulation marks a significant step forward in promoting confidence in Timor-Leste’s financial system and paving the way for sustainable economic growth.