Banking Institutions Act, 2023

Act 13 of 2023

Citation: Act 13 of 2023
Date: 27 July 2023
Language: English
Type: Act
Publication: Download PDF (741.9 KB)

Banking Institutions Act, 2023

Act 13 of 2023

Published in Government Gazette 8155 on 27 July 2023
Assented to on 19 July 2023
Commenced on 8 August 2023 by Banking Institutions Act, 2023: Commencement
[This is the version of this document from 27 July 2023 and includes any amendments published up to 3 January 2025.]

ACTTo consolidate and amend the laws relating to banking institutions, microfinance banking institutions and controlling companies; to provide for the authorisation of a person to conduct business as a banking institution or microfinance banking institution; to provide for the registration of controlling companies in respect of authorised banking institutions or microfinance banking institutions; to authorise foreign banking institutions to open branches in Namibia; to provide for regulation of the ownership and shareholding of banking institutions, microfinance banking institutions and controlling companies; to provide for recovery plans and prudential requirements for banking institutions, microfinance banking institutions and controlling companies; to provide for consolidated supervision of banking institutions, microfinance banking institutions and controlling companies; to protect the interests of persons making deposits with banking institutions and microfinance banking institutions; to provide for the resolution of failing institutions and winding-up, judicial management and cancellation of authorisations; to prohibit and criminalise illegal financial schemes; establish an Appeal Board to hear and determine appeals against certain decisions of the Bank; to repeal the Banking Institutions Act, 1998; and to provide for incidental matters.BE IT ENACTED as passed by the Parliament, and assented to by the President, of the Republic of Namibia as follows:

Part 1 – PRELIMINARY PROVISIONS

1. Definitions and interpretation

(1)In this Act, unless the context otherwise indicates—“affiliate”, in relation to any person, means any entity in which—(a)25 per cent or more of the shares or voting rights is directly or indirectly owned or controlled by that person, including through trusts or bearer shareholdings for the entity; or(b)the election of the majority of directors, or persons responsible for managing the affairs, of the entity is in any manner controlled by that person;“associate”, in relation to any person but subject to subsection (2), includes—(a)the holding company of that person;(b)a subsidiary company or a fellow subsidiary of that person;(c)a subsidiary company of any of the companies referred to in paragraph (a) or (b);(d)a substantial shareholder of that person or a substantial shareholder of that person’s holding company;(e)a business partner of—(i)that person;(ii)that person’s substantial shareholder;(iii)a substantial shareholder of that person’s holding company; or(iv)any of the companies referred to in paragraph (a), (b) or (c);(f)any person who is an officer of—(i)that person;(ii)any of the companies referred to in paragraph (a), (b) or (c); or(iii)any shareholder or business partner referred to in paragraph (d) or (e);“auditor” means a person registered as an accountant and auditor under section 23 of the Public Accountants and Auditors Act, 1951 (Act No. 51 of 1951), and who has been admitted as a member of the Institute of Chartered Accountants of Namibia as provided for in section 29 of that Act;“authorised” means authorised under this Act to conduct banking business or microfinance banking business;“authorised officer” means a staff member of the Bank authorised by the Bank in terms of section 106 to perform functions in terms of or exercise powers under this Act;“Bank” means the Bank of Namibia referred to in section 2 of the Bank of Namibia Act;“Bank of Namibia Act” means the Bank of Namibia Act, 2020 (Act No. 1 of 2020);“banking business” means the business that consists of—(a)accepting sums of money in the form of deposits from the public, whether or not such deposits or sums of money involve the issue of securities or other obligations howsoever described, irrespective of whether such sums of money are raised through a private or public placement, withdrawable or repayable on demand, after a fixed period or after notice;(b)the use of the sums of money referred to in paragraph (a), either in whole or in part, together or with any other sums of money, for the account and at the risk of the person carrying on such business for—(i)loans, advances or investments;(ii)any other purpose or activity authorised by law or by customary banking practice in terms of this Act; or(iii)any other activity designated as an authorised use of money for banking business by the Minister by a notice issued under subsection (3)(a); and(c)such other services as are incidental and necessary to banking business, but does not include—(i)any activity of any public sector or private sector institution or of any person or category of persons, designated as excluded from this definition by the Minister by a notice issued under subsection (3)(b); and(ii)the acceptance of money against securities or other obligations, if such money is—(aa)not used for the purpose of granting advances, loans or credit to the public; or(bb)used for investments for the purpose of expanding the business infrastructures of the issuer of such securities or in the equity of other entities;“banking group” means a group consisting of two or more persons, whether natural or juristic persons, that are predominantly engaged in provision of financial service activities and one or more of which is a banking institution or microfinance banking institution and—(a)each of which person is an associate of any one of the others; or(b)which persons are so interconnected that should one of them experience financial difficulties, another one or all of them would likely be adversely affected, irrespective of whether any of those persons is domiciled in the same state, country, colony or territory as any of the others;“banking institution” means a public company authorised under this Act to conduct banking business;“beneficial owner”, “beneficial shareholder” or “beneficiary”, in relation to a share, right or an interest held by any natural person or entity in a banking institution, microfinance banking institution or controlling company, means—(a)a natural person who ultimately owns or effectively controls another natural person, including the natural person on whose behalf the share, right or interest is held; or(b)a natural person who ultimately owns or exercises effective control over the entity, and a natural person is considered to ultimately own or effectively exercise control over an entity when that person—(i)owns or controls, directly or indirectly, including through trusts or bearer shareholdings for the entity, 25 per cent or more of the shares or voting rights of the entity;(ii)together with a related party owns or controls, directly or indirectly, including through trusts or bearer shareholdings for the entity, 25 per cent or more of the shares or voting rights of the entity;(iii)has the right, directly or indirectly, to appoint or remove the majority of the board of directors of the entity;(iv)has the power to materially influence the decision-making or policy of the entity;(v)despite a less than 25 per cent shareholding or voting rights, derives economic benefits, including dividends, rights to profit, enjoyment of assets of the entity or is able to use significant assets of the entity, even if the person has no other formal link to the entity; or(vi)otherwise exercises control over the management of the entity in his or her capacity as executive officer, non-executive director, independent non-executive director, director, manager or partner;“Board of the Bank” means the Board of the Bank established in terms of section 9 of the Bank of Namibia Act;“branch” means a business unit of a banking institution or microfinance banking institution that meets the following requirements—(a)business is conducted from its own premises;(b)has its own management or is under the control of a shared management; and(c)provides a full spectrum of customary banking business or microfinance banking business facilities and services;“branch of a foreign banking institution” means a branch of a foreign banking institution authorised to conduct banking business under section 26;“bridge bank” means a temporary institution established by the Bank in terms of section 70(7) to administer the assets and liabilities of a failing banking institution, microfinance banking institution or controlling company;“capital funds” has the meaning determined by the Bank under section 39 or 40;“claim”, in relation to a person, means the obligation of any other person to pay or to deliver to such person anything of value in accordance with an agreement or the law establishing such claim;“close relative”, in relation to a natural person, means—(a)the spouse of that person, including a spouse in a marital union in terms of customary law or practice;(b)that person’s child, step-child, adopted child, brother, sister, step-brother, step-sister, parent or step-parent, except that this provision applies only in relation to a child, step-child, an adopted child, a brother, sister, step-sister, step-brother, parent or step-parent who is reasonably known to the executive officers, board members or substantial shareholders of the banking institution, microfinance banking institution or controlling company; or(c)the spouse, or any person who has a relationship as a spouse in a marital union in terms of customary law or practice, of any of the persons mentioned in paragraph (b);“Companies Act” means the Companies Act, 2004 (Act No. 28 of 2004);“company” means a company registered as a public company under the Companies Act;“conservation buffer” means capital set aside to promote the conservation of capital and to build-up adequate funds above the minimum capital during normal times which can be drawn down as losses are incurred during a period of financial distress;“controlling company” means a company approved under section 18 as a controlling company in respect of a banking institution or microfinance banking institution;“core banking systems” means information technology systems and applications that are used to process and record the execution of the core functions of a banking institution or microfinance banking institution, excluding transactions initiated through third-party service providers;“credit bureau” means an entity specialised in the collection and sale of credit performance information of individuals and businesses and registered and licensed as such under the regulations made under the Bank of Namibia Act;“day” means any day other than a Sunday or a public holiday referred to in, or declared under, the Public Holidays Act, 1990 (Act No. 26 of 1990);“debt instrument” includes debentures as defined in section 1(1) of the Companies Act or any other security or document issued by a company, evidencing or acknowledging the liability of a person or the company to repay an amount of money specified in the security or other document, subject to the conditions under which the security or document is issued;“deposit” means an amount of money paid by one person to another person or by a customer to a banking institution or microfinance banking institution, subject to an agreement in terms of which the full amount of money or any part of the amount will, conditionally or unconditionally and with or without interest or a premium, be repaid to such person or to the customer on demand—(a)at a specified or an unspecified date;(b)after a predetermined period of time;(c)after a predetermined period of notice of withdrawal; or(d)subject to an agreement entered into by the parties concerned,even if the payment is limited to a fixed amount or a transferable or non-transferable certificate or other instrument providing for the repayment of the amount issued in respect of such amount, but a deposit does not include an amount of money—(i)paid as an advance or as a part payment in terms of a contract for the sale, letting, hiring or other provision of movable or immovable property or for services;(ii)paid as security for the performance of a contract or as security in respect of any loss which may result from the non-performance of a contract;(iii)paid as security for the delivery or return of any movable or immovable property;(iv)paid by a holding company to its subsidiary or by a subsidiary to its holding company or by one subsidiary to a fellow subsidiary; or(v)paid by a person who, at the time of the payment—(aa)is a close relative of the person to whom the money is paid;(bb)is a director or an officer concerned in the management of the person to whom the money is paid; or(cc)is a close relative of a director or of an officer referred to in item (bb);“Deputy Governor” means a Deputy Governor of the Bank referred to in section 1 of the Bank of Namibia Act;“determination” means a determination made by the Bank under section 108(3);“director” means a director as defined in section 1(1) of the Companies Act;“entity” means a corporate body, syndicate, trust, partnership, fund, an association, a joint venture and any other body of persons, corporate or unincorporated;“exchange” means a stock exchange and includes an exchange, by whatsoever name it is known, registered or licensed under the laws of any foreign state, country, colony or territory to perform functions similar those of a stock exchange;“executive officer” means a person, by whatever name described, who—(a)could exercise significant influence over a banking institution, microfinance banking institution or controlling company;(b)is in the direct employment of, or acting for, or by arrangement with, a banking institution, microfinance banking institution or controlling company; or(c)is principally responsible for the management and conduct of the credit provisions, risk management, compliance, accounting, auditing, secretarial, treasury and operational functions of a banking institution, microfinance banking institution or controlling company,and includes a chief executive officer, deputy chief executive officer and any manager of a significant business unit;“exposure” means any form of exposure, including—(a)loans, advances, investments and irrevocable commitments to lend;(b)leasing;(c)guarantees;(d)any other form of finance; or(e)any other exposure contemplated for the purpose of capital requirements under sections 39 and 40;“failing institution” means a banking institution, microfinance banking institution or controlling company that—(a)experiences or continues to experience, or becomes subject to, any of the conditions or circumstances contemplated in subsection (1) of section 69 and the provisions of that section or any other action reasonably taken are considered inadequate to resolve the situation; or(b)fails or is unlikely to comply with an order issued or to be issued under subsection (2) of section 69 and the conditions or circumstances contemplated in subsection (1) of that section continue to deteriorate;“fellow subsidiary”, in relation to a company which is a subsidiary of a holding company, means any other company which is a subsidiary of such holding company;“financial distress” means a condition where a banking institution, microfinance banking institution or controlling company cannot meet, or has difficulty paying off, its financial obligations to its creditors, typically due to high fixed costs, illiquid assets or revenues sensitive to economic downturns;“financial records” includes banking and accounting records;“foreign banking institution” means a person authorised or registered to conduct banking business under the laws of any foreign state, country, colony or territory, and which conducts banking business in such foreign state, country, colony or territory;“Governor” means the Governor of the Bank referred to in section 1 of the Bank of Namibia Act;“High Court” means the High Court of Namibia constituted by Article 80(1) of the Namibian Constitution;“holding company” means a holding company as defined in section 1(6) of the Companies Act;“incorporated”, in relation to a banking institution, microfinance banking institution or controlling company, means registered as a public company under the Companies Act;“Insolvency Act” means the Insolvency Act, 1936 (Act No. 24 of 1936);“insolvent”, in relation to a banking institution, microfinance banking institution or controlling company, means a banking institution, microfinance banking institution or controlling company—(a)of which the liabilities exceed its assets; or(b)which has committed an act of insolvency in terms of the Insolvency Act;“Labour Act” means the Labour Act, 2007 (Act No. 7 of 2007);“listed banking institution” means a banking institution or microfinance banking institution that issued shares through an exchange, and whose shares are traded on that exchange;“merger” means an occurrence where one or more banking institutions, microfinance banking institutions or controlling companies directly or indirectly acquire or establish direct or indirect control over the whole or part of the business of another banking institution, microfinance banking institution or controlling company by any means including—(a)the purchase or lease of shares, an interest or assets of that other banking institution, microfinance banking institution or controlling company; or(b)the amalgamation or other combination with any other banking institution, microfinance banking institution or controlling company;“microfinance banking business” means the business that primarily consists of—(a)accepting sums of money in the form of deposits withdrawable or repayable on demand or after a fixed period or after notice; and(b)the use of the sums of money or referred to in paragraph (a), either in whole, in part or together with any other sums of money, for the account and at the risk of the person carrying on that business for—(i)microloans, advances or investments; and(ii)any other activity designated as an authorised use of money for microfinance banking business by the Minister by a notice issued under subsection (3)(c);(c)any other activity that the Minister designates as an authorised business activity for microfinance banking institutions by a notice issued under subsection (3)(d), but does not include—(i)any activity of any public sector or private sector institution, or of any person or category of persons, designated as excluded from this definition by the Minister by a notice issued under subsection (3)(e);(ii)the acceptance of money against securities or other obligations, if such money is—(aa)not used for the purpose of granting advances, loans or credit to the public; or(bb)used for investments for the purpose of expanding the business infrastructure of the issuer of such securities or in the equity of other entities;“microfinance banking institution” means a public company authorised under this Act to primarily conduct microfinance banking business;“microloan” means a loan of not greater than an amount as may be determined by the Bank by a notice issued under subsection (3)(f);“Minister” means the Minister responsible for finance;“Ministry” means the Ministry responsible for administering finance matters;“Namibia Financial Institutions Supervisory Authority” means the Namibia Financial Institutions Supervisory Authority referred to in section 2 of the Namibia Financial Institutions Supervisory Authority Act;“Namibia Financial Institutions Supervisory Authority Act” means the Namibia Financial Institutions Supervisory Authority Act, 2001(Act No. 3 of 2001);“officer”, in relation to a company, means any director having executive responsibilities in the company or any manager, secretary or other employee of the company, but does not include a juristic person holding any such position;“prescribe” means prescribe by regulation made under this Act;“principal officer”, in relation to a banking institution, microfinance banking institution or controlling company, includes—(a)the executive chairperson, managing director, executive director, chief executive officer or manager, or any other person by whatever title referred to, who is mainly responsible for the management of the affairs of the banking institution, microfinance banking institution or controlling company in Namibia, and whose name and title the banking institution, microfinance banking institution or controlling company must submit to the Bank for approval in terms of section 53;(b)a person who, in terms of section 11, applies for an authorisation to establish a banking institution or microfinance banking institution;“public”, in the context of banking or microfinance banking business, refers to any natural or juristic person, whether or not such person is a depositor with a banking institution or microfinance banking institution, but excludes its controlling company or the associate or affiliates of such banking institution or microfinance banking institution, statutory bodies and other institutions referred to in section 2(2);“related party,” in relation to a person or shareholder contemplated in section 28, 29, 33 or 34, but subject to subsection (4), means—(a)an associate or close relative of that person or shareholder; or(b)any other person who has entered into an agreement with that person or shareholder relating to—(i)the acquisition, holding or disposal; or(ii)the exercising of voting rights in respect, of shares in a banking institution, microfinance banking institution, controlling company or in any trust controlled or administered by that person or shareholder;“representative office”, in relation to a foreign banking institution, means an office of the foreign banking institution in Namibia;“risk weighting” means attaching a weight to each class of assets or other exposures of a banking institution, microfinance banking institution or controlling company in accordance with the determinations by the Bank for the purpose of calculating the minimum capital requirements under sections 39 and 40;“securities”, for purposes of the definition of banking business or microfinance banking business, means securities as defined in section 1 of the Stock Exchanges Control Act;“significant business unit”, for the purposes of the definition of executive officer, means a functional and strategic division of a banking institution, microfinance banking institution or controlling company that works towards the achievement of the strategic objectives of the institution;“stock exchange” means a stock exchange as defined in section 1 of the Stock Exchanges Control Act;“Stock Exchanges Control Act” means the Stock Exchanges Control Act, 1985 (Act No. 1 of 1985);“subsidiary” means a subsidiary company as defined in section 1(3) of the Companies Act, and includes a subsidiary company of a subsidiary;“substantial shareholder” means any person or registered shareholder that, directly or indirectly, holds, controls or is entitled to exercise the voting rights in not less than 10 per cent of any class of voting shares of a banking institution, microfinance banking institution or controlling company, and for the purpose of determining whether a person is a substantial shareholder—(a)a person that controls a substantial shareholder is considered to be a substantial shareholder; and(b)any shares owned or controlled, or the voting rights of which are exercisable, by a person’s close relative are considered to be owned or controlled by such person;“this Act” includes the regulations, determinations and any other subordinate legislative instruments made or issued under this Act;“Unit Trusts Control Act” means the Unit Trusts Control Act, 1981(Act No. 54 of 1981).

(2)For the purposes of—

(a)paragraph (e) of the definition of “associate” in subsection (1), a business partner means a business partner who is able, by virtue of his or her own shareholding, to contribute to or to affect the influence which the person, substantial shareholder or company referred to in that paragraph is able or in a position to exercise, in his or her capacity as a shareholder; and

(b)paragraph (f) of the definition of “associate” in subsection (1), an officer means an officer who is able, by virtue of his or her own shareholding, to contribute to or to affect the influence which the person, company, shareholder or business partner referred to in that paragraph is able or in a position to exercise, in his or her capacity as a shareholder.

(3)For the purposes of—

(a)paragraph (b)(iii) of the definition of “banking business” the Minister, on recommendation of the Bank, may by notice in the Gazette designate any activity as an authorised manner of using funds for the purpose of conducting banking business;

(b)paragraph (c)(i) of the definition of “banking business” the Minister, on recommendation of the Bank, may by notice in the Gazette designate any activity of the public or private sector, or of any person or category of persons as excluded from that definition, if that activity is performed in accordance with the conditions that the Minister may specify in the notice;

(c)paragraph (b)(ii) of the definition of “microfinance banking business” the Minister, on recommendation of the Bank, may by notice in the Gazette designate any activity as an authorised manner of using funds for the purpose of conducting microfinance banking business;

(d)paragraph (c) of the definition of “microfinance banking business” the Minister, on recommendation of the Bank, may by notice in the Gazette designate any activity as an authorised business activity for microfinance banking business;

(e)paragraph (c)(i) of the definition of “microfinance banking business” the Minister, on recommendation of the Bank, may by notice in the Gazette designate any activity of the public or private sector, or of any person or category of persons as excluded from that definition, if that activity is performed in accordance with the conditions that the Minister may specify in the notice; and

(f)the definition of “microloan” the Bank may, by notice in the Gazette determine the maximum amount of money which can be granted as a microloan by a microfinance banking institution.

(4)For purposes of the definition of “related party”, if—

(a)the nominal value of shares in a banking institution, microfinance banking institution or controlling company issued or to be registered in the name of any person; and

(b)the nominal value of the shares already held by the person referred to in paragraph (a),

amounts to the lesser of N$100 000 or one per cent of the value of all the shares issued in the banking institution, microfinance banking institution or controlling company, the banking institution, microfinance banking institution or controlling company may, unless it has knowledge to the contrary, accept that the person is not a related party of any other shareholder in the banking institution, microfinance banking institution or controlling company.

(5)Any application or notice made or given, or any other communication, in terms of this Act must—

(a)be in the official language of Namibia; and

(b)unless otherwise provided for in this Act, be in writing.

2. Limitation of rights and non-application of Act

(1)This Act, in so far as it provides for a limitation on the fundamental freedoms contemplated in Article 21 of the Namibian Constitution by authorising restrictions relating to the conducting of trade or business, is, unless otherwise provided, enacted on the authority conferred by Sub-Article (3) of that Article.

(2)This Act does not apply to—

(a)the Bank, except insofar as it confers upon the Bank the power to perform the functions contained in this Act;

(b)any international bank or international financial organisation, or any associated or affiliated bank or financial organisation of such international bank or international organisation, of which the Government of Namibia, or the Bank, is a member;

(c)any building society registered under the Building Societies Act, 1986 (Act No. 2 of 1986);

(d)the Post Office Savings Bank as defined in the Posts and Telecommunications Act, 1992 (Act No. 19 of 1992);

(e)the National Housing Enterprise established by the National Housing Enterprise Act, 1993 (Act No. 5 of 1993);

(f)the Namibia Industrial Development Agency established by the Namibia Industrial Development Agency Act, 2016 (Act No. 16 of 2016);

(g)a co-operative registered under the Co-operatives Act, 1996 (Act No. 23 of 1996);

(h)the Development Bank of Namibia established by the Development Bank of Namibia Act, 2002 (Act No. 8 of 2002);

(i)the Agricultural Bank of Namibia established by the Agricultural Bank of Namibia Act, 2003 (Act No. 5 of 2003);

(j)any non-bank financial institution whose business activities are governed by law and regulated by the Namibia Financial Institutions Supervisory Authority, except that this exemption is limited to the extent that the business activities of that non-bank financial institution are regulated by the Namibia Financial Institutions Supervisory Authority; and

(k)any other institution or body exempted by the Minister by notice under subsection (5).

(3)A non-banking financial institution exempted from the application of this Act in terms of subsection (2)(j) may not engage in banking business or microfinance banking business without the written authorisation of the Bank.

(4)The Minister may prescribe the specific regulatory requirements applying to deposit taking institutions or entities that have been authorised to conduct banking business or microfinance banking business under subsection (3) which requirements may differ from those applicable to banking institutions and microfinance banking institutions regulated by or under this Act.

(5)The Minister on the recommendation of the Bank may—

(a)by notice in the Gazette, remove any institution or body from, or add any institution or body to, the institutions or bodies exempted from the application of this Act under subsection (2);

(b)despite the provisions of the establishing Act of an institution or a body referred to in subsection (2), apply any provision of this Act to that institution or body, or prescribe differentiated prudential requirements for such institution or body, as the Minister may consider appropriate in the circumstances; or

(c)withdraw or amend a notice issued under paragraph (a) by notice in the Gazette.

(6)A person, other than a person who solicits or advertises for deposits, is not considered to be accepting deposits if he or she at any time holds deposits—

(a)for or on behalf of not more than 20 persons; or

(b)amounting in aggregate to not more than N$500 000, excluding interest payable on the deposits.

(7)The Minister, on the recommendation of the Bank, may by notice in the Gazette amend—

(a)the number of persons specified in paragraph (a); or

(b)the amount specified in paragraph (b),

of subsection (6).

(8)Where there is a conflict between the provisions of this section and any provision of any law establishing a non-banking financial institution relating to a matter regulated under or governed by this Act, the provisions of this section prevail to the extent of the conflict.

Part 2 – ADMINISTRATION OF ACT

3. Guidelines, circulars or notices by Bank

(1)For the purpose of promoting sound and prudential banking practices, the Bank may provide banking institutions, microfinance banking institutions or controlling companies with guidelines, circulars or notices not inconsistent with this Act, relating to the application of this Act by banking institutions, microfinance banking institutions or controlling companies or to the conducting of business as a banking institution, microfinance banking institution or controlling company in general.

(2)The guidelines, circulars or notices contemplated in subsection (1) must be in writing and the Bank must deliver those guidelines, circulars or notices to the principal officer of the banking institution, microfinance banking institution or controlling company concerned.

4. Limitation of liability

(1)No liability attaches—

(a)to the Government of Namibia or the Bank;

(b)to—

(i)the Minister;

(ii)the Governor or a Deputy-Governor, any member of the Board, or staff member, of the Bank; or

(iii)any person acting on behalf of the Government or of the Bank,

either in his or her personal or official capacity,

for any loss sustained by or damage caused to any person as a result of anything done or omitted by any person in good faith in the performance of any function or duty under this Act, unless it is established that the act or omission was committed in a grossly negligent manner or intentionally.

(2)The expenses incurred by the Bank or by any person referred to in subsection (1)(b)(ii) or (iii) in any legal proceedings under that subsection must be borne by the Bank.

5. Delegation of powers and assignment of functions

(1)The Board of the Bank may, as contemplated in section 79(2) of the Bank of Namibia Act, in writing delegate a power or assign a function conferred or imposed on the Board by or under this Act to the Governor, a Deputy Governor or a staff member of the Bank.

(2)The Governor of the Bank may, as contemplated in section 79(3) of the Bank of Namibia Act in writing and on such conditions as the Governor may determine, delegate a power or assign a function conferred or imposed on the Governor under or in terms of subsection (1) or under or in terms of this Act to a Deputy Governor or staff member of the Bank.

Part 3 – AUTHORISATION TO ESTABLISH BANKING INSTITUTION OR MICROFINANCE BANKING INSTITUTION

6. Prohibition on conducting of banking business or microfinance banking business by unauthorised persons

(1)A person may not—

(a)conduct banking business or microfinance banking business;

(b)receive, accept or take a deposit;

(c)by any means, including advertising or soliciting, procure or attempt to procure a deposit;

(d)represent himself or herself or itself to be a banking institution or microfinance banking institution; or

(e)subject to subsection (2), use the expression or derivative “bank”, “banking institution”, “microfinance banking institution” or any expression, name, title or symbol indicating or calculated to create the impression that the person is conducting, or is authorised to conduct, business as a banking institution or microfinance banking institution,

unless that person is authorised to so conduct business as a banking institution or microfinance banking institution under this Act.

(2)Subsection (1) does not apply if the expression “bank”, “microfinance banking business” or any equivalent or derivative of the expression is—

(a)included in the name or title of a staff members association or similar organisation of a banking institution or microfinance banking institution;

(b)included in the name or title of an association of banking institutions or microfinance banking institutions; or

(c)used for any other purpose approved by the Bank in writing.

(3)A person who contravenes or fails to comply with subsection (1) commits an offence and is liable to the penalties provided for in section 92(2)(a).

7. Investigations

(1)For the purposes of this section, “premises” includes any building or structure or part of such building or structure, whether above or below the surface of the land or water, or any vehicle, vessel or aircraft.

(2)This section, in so far as it provides for a limitation on the fundamental rights contemplated in Sub-Article (1) of Article 13 of the Namibian Constitution by authorising interference with the privacy of any person’s home, correspondence or communication, is enacted on the authority conferred by that Article.

(3)If the Board of the Bank has reason to believe that a person is conducting banking business or microfinance banking business in contravention of section 6, the Bank may request an authorised officer to exercise any of the powers conferred by subsection (4) or (5).

(4)An authorised officer may, subject to subsection (6), at any time and without prior notice—

(a)enter any premises which the Bank or authorised officer has reason to believe is occupied or used by any person for the purpose of, or in connection with, the conducting of banking business or microfinance banking business in contravention of section 6;

(b)search for any book, record, statement, document or other item used, or which is believed to be used, in connection with the banking business or microfinance banking business referred to in paragraph (a); or

(c)seize or make a copy of any book, record, statement, document or other item referred to in paragraph (b) or seize any money found on the premises,

as if the authorised officer were, subject to necessary changes, a police official referred to in Chapter 2 of the Criminal Procedure Act, 1977 (Act No. 51 of 1977) and the book, record, statement, document or other item were used in the commission of a crime.

(5)An authorised officer may—

(a)by notice in writing addressed and delivered to any person who has control over or custody of any book, record, statement, document or other item referred to in subsection (4)(b), require that person to produce the book, record, statement, document or other item to the authorised officer issuing or delivering the notice at the place, on the date and at the time specified in the notice;

(b)examine any book, record, statement, document or other item referred to in subsection (4)(b), and may require from any person referred to in paragraph (a) an explanation regarding any entry in the book, record, statement, document or other item;

(c)with the approval of the Bank, by notice in writing delivered to any banking institution, microfinance banking institution or controlling company, instruct such banking institution, microfinance banking institution or controlling company to—

(i)summarily freeze any banking account or accounts of any person referred to in this section with such banking institution or microfinance banking institution or a banking institution or microfinance banking institution controlled by such company; and

(ii)retain all moneys in any banking account or accounts pending further instructions from the Bank;

(d)with the approval of the Bank, by notice in writing delivered to any person referred to in this subsection, direct that the business of such person be summarily suspended pending an investigation by the Bank under this section;

(e)if any person has been convicted of an offence in terms of section 6, by notice in writing delivered to that person direct the person to close down his or her or its business;

(f)require a member of the Namibian police force to assist the authorised officer in the exercise of powers or performance or execution of duties or functions under this section; or

(g)request any other person who—

(i)is aged 18 years or above; and

(ii)the authorised officer reasonably believes is able to assist the authorised officer in the exercise of powers or performance or execution of duties or functions under this section,

to assist the authorised officer in the exercise of powers or performance or execution of duties or functions under this section.

(6)In the exercise of powers or performance or execution of duties or functions conferred by subsection (4) or (5), the authorised officer may not enter any premises or part of premises being used as a private home, except where—

(a)the owner or occupier of those premises consents to the entry and search of the premises;

(b)the entry and search of the premises are authorised by a warrant issued by a judge of the High Court of Namibia or a magistrate who has jurisdiction in the area in which the premises in question are situated; or

(c)the authorised officer on reasonable grounds believes that—

(i)a warrant of entry and search would be issued to him or her if he or she applied for it; and

(ii)the delay in obtaining the warrant would defeat the object of the investigation.

(7)A warrant for entry and search of premises or part of premises being used as a private home may be issued in accordance with subsection (6)(b) if it appears to the judge or magistrate from information on oath or affirmation that there are reasonable grounds for believing that—

(a)section 6 has been or is being contravened in those premises; or

(b)a book, record or any other document or other article required for inspection is in those premises.

(8)A warrant must—

(a)identify the premises that may be entered and searched; and

(b)authorise the person named in the warrant to enter and search the premises and exercise any of the powers conferred by subsection (4) or (5).

(9)A warrant continues in force for a period of 30 days from the date it is issued but lapses if—

(a)the purpose for which it was granted is fulfilled; or

(b)it is cancelled by the judge or magistrate by whom it was issued or by any other judge of the High Court or any other magistrate.

(10)A warrant may be executed on any day between 07:00 and 18:00 unless a different time that is reasonable in the circumstances is authorised and specified in the warrant by the judge or magistrate granting the warrant.

(11)On first entering any premises under a warrant the authorised officer must—

(a)provide to the owner or occupier of the premises proof of—

(i)his or her authority to enter the premises by handing a copy of the warrant to that person; and

(ii)his or her identity; or

(b)if none of the persons mentioned in paragraph (a) is present, affix a copy of the warrant to the premises in a prominent and visible place.

(12)A person in charge or control of premises entered by an authorised officer under subsection (4) or (6) must provide such reasonable facilities and assistance as the authorised officer may require for performing a function under this section, including providing access to any computer on the premises and rendering assistance to the authorised officer to search for any data contained in such computer and, on request of the authorised officer, provide any data contained in that computer in printed form to the authorised officer.

(13)A person—

(a)who, without lawful or reasonable excuse, fails or refuses to produce any book, record, statement or other document which an authorised officer requires to be produced to him or her for inspection under subsection (5)(a);

(b)who, without lawful or reasonable excuse, fails or refuses to explain any entry in a book, record, statement or other document which an authorised officer requires him or her to explain;

(c)who removes or tampers with any book, record, statement or other document seized by the authorised officer under subsection (4)(c);

(d)who, without lawful or reasonable excuse, fails or refuses to comply with a direction issued by an authorised officer under subsection (5)(d);

(e)who, without a lawful or reasonable excuse, refuses or fails to comply with any request made by an authorised officer as contemplated in subsection (5)(g) in the exercise, performance or execution of such officer’s powers, duties or functions; or

(f)who, without lawful or reasonable excuse, fails or refuses to provide an authorised officer with reasonable facilities and assistance required by an authorised officer in terms of subsection (12),

commits an offence and is liable on conviction to a fine not exceeding N$20 000 or to imprisonment for a period not exceeding four years or to both such fine and such imprisonment.

(14)A banking institution, microfinance banking institution or controlling company that or any other person who contravenes or fails to comply with an instruction issued by an authorised officer under subsection (5)(c) commits an offence and is liable to the penalties provided for in section 93(1).

8. Repayment of monies by unauthorised persons

(1)If the Bank is satisfied that a person has obtained any money in contravention of section 6, the Bank must in writing direct the person to repay all the money so obtained by him or her, including any interest or other amounts which may be owing by the person in respect of that money—

(a)to the respective persons from whom he or she has obtained the money as verified;

(b)in the manner and in accordance with the requirements imposed; and

(c)within the period of time imposed,

by the Bank and specified in the directive.

(2)A person referred to in subsection (1) who refuses or fails to comply with a direction under that subsection must, for the purposes of—

(a)section 350 of the Companies Act, be considered to be unable to pay his or her or its debts; or

(b)section 8 of the Insolvency Act, be considered to have committed an act of insolvency,

and the Bank may apply to the High Court for the winding-up or for the sequestration of the estate of such person.

(3)Any action taken under subsection (2) is in addition to, and does not derogate from, any criminal liability in terms of this Act or of any other law, of a person referred to in that subsection.

(4)Section 74, with necessary changes, applies to—

(a)money referred to in subsection (1); or

(b)any other property which a person referred to in subsection (1) may have in his or her possession as a lessor of a safe deposit box, a trustee, a fiduciary or in any other capacity on behalf of any other person.

(5)A person who contravenes or fails to comply with a directive issued by the Bank under subsection (1) commits an offence and is liable to the penalties provided for in section 92(2)(a).

9. Name of banking institution or microfinance banking institution

(1)The Bank may not issue an authorisation to conduct banking business or microfinance banking business to any person under a name which, in the opinion of the Bank, may mislead the public as to the—

(a)identity; or

(b)nature of the activities,

of the banking institution or microfinance banking institution concerned.

(2)A banking institution or microfinance banking institution may not, without the written approval of the Bank—

(a)use or refer to itself by; or

(b)conduct banking business or microfinance banking business under,

a name other than the name under which it was authorised to conduct banking business or microfinance banking business as contemplated in subsection (1).

(3)On written application by a banking institution or microfinance banking institution for the change of name of the banking institution or microfinance banking institution, the Bank may—

(a)subject to such conditions as the Bank may impose, approve the change of the name under which the banking institution or microfinance banking institution was authorised to conduct banking business or microfinance banking business to the name applied for by the banking institution or microfinance banking institution; or

(b)refuse the application.

(4)If the Bank is satisfied that the—

(a)authorised name of a banking institution or microfinance banking institution; or

(b)name under which a banking institution or microfinance banking institution conducts business,

may mislead the public as to the identity or nature of the business of the banking institution or microfinance banking institution, the Bank may by written notice addressed and delivered to the banking institution or microfinance banking institution, direct the banking institution or microfinance banking institution to change the name under which it is conducting business to a name approved by the Bank.

(5)If the Bank, under subsection (3) approves, or under (4) directs, the change of the name under which a banking institution or microfinance banking institution was authorised, the Bank must under section 13 issue an amended certificate of authorisation in the name of the banking institution or microfinance banking institution, specifying the changed name of the banking institution or microfinance banking institution.

(6)A banking institution or microfinance banking institution that—

(a)contravenes or fails to comply with subsection (2); or

(b)refuses or fails to comply with a directive issued by the Bank under subsection (4),

is liable to the penalties contemplated in section 94(1).

10. Prerequisite for conducting banking or microfinance banking business

(1)The Bank may not authorise a person to conduct banking business or microfinance banking institution unless that person is—

(a)incorporated as a public company under the Companies Act and has the minimum capital funds as determined under section 39; or

(b)a branch of a foreign banking institution that—

(i)is incorporated as a public or private company under similar provisions of the Companies Act in its state, country, colony or territory of origin;

(ii)is registered as an external company under the Companies Act, authorised to conduct banking business or microfinance banking institution in terms of section 26; and

(iii)has the minimum capital funds as determined by the Bank.

(2)A company may not, without the prior written approval of the Bank, be incorporated as a public company or register as an external company under the Companies Act for the purpose of conducting banking business or microfinance banking business.

(3)An incorporated banking institution or microfinance banking institution authorised to conduct banking business or microfinance banking business under this Act may not, under this Act or any other law, convert to a branch of a foreign banking institution contemplated in section 26, unless the banking institution or microfinance banking institution has obtained the approval of the Bank to so convert.

(4)A—

(a)person who contravenes or fails to comply with subsection (2) commits an offence and is liable to the penalties provided for in section 92(2)(a); or

(b)banking institution or microfinance banking institution that or any other person who contravenes or fails to comply with subsection (3) commits an offence and is liable to the penalties provided for in section 93(1).

11. Application for authorisation to conduct banking or microfinance banking business

(1)A person who intends to conduct banking business or microfinance banking business must apply to the Bank for the granting of an authorisation to conduct the banking business or microfinance banking business.

(2)An application made under subsection (1) must be—

(a)made in the form and manner determined by the Bank;

(b)signed on behalf of the applicant by its principal officer or if the applicant is a company to be registered, by its trustees or by the subscribers to its memorandum and articles of association; and

(c)accompanied by the prescribed application fee.

(3)On receipt of an application contemplated in subsection (1), the Bank may, before considering the application, in writing require the applicant to furnish to the Bank with—

(a)a report in writing by an auditor or by another person approved by the Bank, on such aspects relating to the application as the Bank may consider necessary; or

(b)such further information, books, records, statements or other documents as the Bank may request.

(4)An applicant may, at any time before authorisation to conduct banking business or microfinance banking business is granted or refused, withdraw the application by written notice to the Bank.

(5)The Bank may cancel any application where—

(a)an applicant has failed to submit the necessary information, books, records, statements or other documents in support of the application as required under subsection (3), within such time period as the Bank may specify for the submission of the outstanding information or documents; or

(b)the application contains material deficiencies in its proposed business plan, financial projections, proposed capital and shareholding structures such that the Bank considers that the applicant or the application does not or will not be able to meet the requirements of this Act.

(6)Where an application has been withdrawn under subsection (4) or cancelled under subsection (5), the Bank may not process the application for further consideration and the Bank must in writing notify the applicant accordingly.

(7)If the applicant intends to continue with the application after it has been withdrawn or cancelled under this section, the applicant must submit a fresh application, provided that a period of not less than 12 months has lapsed from the date of the withdrawal or cancellation of the initial application.

(8)A person who when making an application under subsection (1) intentionally or recklessly furnishes false or misleading information to the Bank commits an offence and is liable to the penalties provided for in section 92(2)(a).

12. Grant or refusal of application and provisional authorisation

(1)Before considering an application for an authorisation lodged with the Bank under section 11, the Bank must conduct such investigations, both within or outside Namibia, relating to the applicant or to the application as it may consider necessary in order to ascertain—

(a)the validity and authenticity of the information submitted by the applicant to the Bank in terms of section 11;

(b)the financial status and history of the applicant, including its assets and liabilities, and its policies and strategies relating to the future development of its banking business or microfinance banking business;

(c)whether the applicant has an adequate capital structure, ascertained in the manner and in accordance with the criteria, determined by the Bank under section 39 or 40;

(d)the integrity of the applicant and its competence to conduct or experience in conducting banking business or microfinance banking business;

(e)the ability of the applicant to comply with the provisions of this Act;

(f)whether the directors and officers of the applicant are fit and proper persons for the purpose of conducting banking business or microfinance banking business, according to the criteria as the Bank may determine;

(g)whether the structure and shareholding of the group of companies of which the applicant forms a part or intends to form a part will not hinder effective banking supervision or endanger the stability of the banking sector;

(h)whether the granting of an authorisation to conduct banking business or microfinance banking business will not be in conflict with national economic objectives and development priorities of Namibia;

(i)whether the applicant is or will be able to apply or maintain adequate, effective and proper internal control systems when conducting the banking business or microfinance banking business in terms of the authorisation;

(j)whether the applicant complies or is able to comply with the laws relating to anti-money laundering and combating of financing of terrorism and proliferation activities;

(k)whether the applicant complies with the provisions of this Act and in particular the provisions of sections 28 and 34 pertaining to ownership and shareholding requirements; and

(l)any other matter which the Bank may regard as relevant to the application or prescribed in terms of this Act.

(2)The Bank may not consider an application for authorisation to conduct banking business or microfinance banking business, unless the Bank is satisfied that the—

(a)business plan is viable;

(b)proposed capital structure is adequate to—

(i)mitigate the risks from the proposed business model;

(ii)support the growth in the balance sheet and expansion of the business; and

(iii)cover the formation expenditures and other operational expenses;

(c)substantial shareholders possess adequate financial means to provide required support to the proposed banking institution or microfinance banking institution;

(d)proposed banking institution or microfinance banking institution has transparent shareholding group structures which allow for the—

(i)better understanding and assessment of the ultimate beneficial owners of the proposed banking institution or microfinance banking institution; and

(ii)conduct of effective consolidated supervision of the group;

(e)substantial shareholders have submitted a commitment letter in support of the application on the following aspects—

(i)meeting the banking institution’s or microfinance banking institution’s liquidity or funding requirements;

(ii)injecting more capital in the banking institution or microfinance banking institution, if it becomes necessary;

(iii)providing management and technical expertise to the banking institution or microfinance banking institution;

(iv)establishing, monitoring and assessing internal control systems, including the risk management function at the banking institution or microfinance banking institution;

(v)training the banking institution’s or microfinance banking institution’s employees to have the knowledge and skills to perform their responsibilities; and

(vi)providing the banking institution or microfinance banking institution with other non-financial resources or support if a weakness is identified that cannot be corrected by the banking institution or microfinance banking institution on its own;

(f)applicant complies with, or is able to comply with, all the relevant provisions of this Act; and

(g)banking business or microfinance banking business to which the application relates will be to the economic advantage of Namibia.

(3)After having considered an application made under section 11(1) and the matters referred to in subsections (1) and (2), the Bank must consult with the Minister who may provide his or her advice with respect to the application.

(4)On receipt of the Minister’s advice, if any, given under subsection (3), the Bank must give due consideration to that advice, and the Bank may—

(a)refuse the application;

(b)grant the application; or

(c)grant the application subject to such conditions as the Bank may impose,

and must in writing inform the applicant of the decision of the Bank, and where the application is refused or conditions are imposed, provide the applicant with reasons for the refusal of the application or imposition of conditions.

(5)If the Bank under subsection (4)(b) or (c) grants the application for authorisation to conduct banking business or microfinance banking business, the Bank must provide such person with a provisional authorisation valid for not more than six months to enable the applicant to prepare itself to start conducting banking business or microfinance banking business.

(6)On application by the person granted a provisional authorisation under subsection (5), the Bank may extend the provisional authorisation for a period as it considers appropriate in the circumstances.

(7)A person to whom a provisional authorisation has been granted may not commence with the conducting of banking business or microfinance banking business, unless the Bank has issued a certificate of authorisation to conduct the banking business or microfinance banking business concerned.

(8)The application fee paid by or on behalf of the applicant in terms of section 11(2)(c) is not refundable, irrespective of whether the application is granted or refused.

(9)If the Bank has refused an application in terms of subsection (4)(a), the applicant may lodge another application after a period of 12 months has lapsed from date of the refusal.

13. Authorisation to conduct banking business or microfinance banking business and certificate of authorisation

(1)An applicant to whom the Bank has granted a provisional authorisation under section 12(5) may, within the six months’ period or extended period, notify the Bank of its readiness to commence banking business or microfinance banking business after which the Bank must conduct a pre-opening examination to ascertain the extent of such readiness.

(2)If the Bank—

(a)under section 12(4) has granted an application for authorisation to conduct banking business or microfinance banking business; and

(b)after a pre-opening examination contemplated in subsection (1), has confirmed the readiness of the applicant to commence banking business or microfinance banking business,

the Bank must, against payment of the prescribed authorisation fee by or on behalf of the person who applied for the authorisation, issue in the name of such person a certificate of authorisation to conduct banking business or microfinance banking business.

(3)A certificate contemplated in subsection (2) must—

(a)be in the form;

(b)contain the particulars; and

(c)be issued and signed by a person,

determined by the Bank.

(4)The—

(a)granting of authorisation to conduct banking business or microfinance banking business under section 12(4); and

(b)issuance of a certificate under subsection (3),

constitutes a licence to conduct business as an authorised dealer in foreign exchange, provided that the applicant complies with the licensing requirements prescribed under the Currency and Exchanges Act, 1933 (Act No. 9 of 1933).

14. Duration and conditions of authorisation

(1)A certificate of authorisation issued under section 13(2) is, subject to section 15 or section 73, valid for an indefinite period of time.

(2)If a banking institution or microfinance banking institution—

(a)intends to effect any change with respect to any of the particulars of an operational or strategic nature furnished when the banking institution or microfinance banking institution applied to the Bank for the granting of an authorisation in terms of section 11; or

(b)becomes aware that any change has occurred in relation to the matters and under the circumstances contemplated in paragraph (a),

the banking institution or microfinance banking institution must at least 30 days prior to the change, in a case where paragraph (a) applies, or within 30 days of becoming aware of the change, in a case where paragraph (b) applies, in writing apply for approval of the change to the Bank.

(3)An application made under subsection (2) must be—

(a)made in the form and manner determined by the Bank; and

(b)accompanied by full particulars of the—

(i)intended changes or the changes which have so occurred; and

(ii)the impact that the changes may have on the banking institution or microfinance banking institution.

(4)After having considered an application made under subsection (2), the Bank may—

(a)refuse the application;

(b)grant the application; or

(c)grant the application subject to such conditions as the Bank may impose,

and must in writing inform the applicant of the decision of the Bank, and where the application is refused or conditions imposed, provide the applicant with reasons for the refusal of the application or imposition of conditions.

(5)If—

(a)a banking institution or microfinance banking institution effects a change; or

(b)a change occurs,

in the circumstances contemplated in subsection (2), and the banking institution or microfinance banking institution fails to apply for approval of the change by the Bank as required by that subsection the Bank may, despite any criminal liability which the banking institution or microfinance banking institution may incur, take action under subsection (6).

(6)If the Bank is of the opinion that the change or the intended change in the particulars of the banking institution or microfinance banking institution contemplated in subsection (5) is of such a nature or extent that the Bank considers it necessary to amend any of the conditions subject to which the authorisation was granted the Bank must—

(a)in writing notify the banking institution or microfinance banking institution of the intention of the Bank to so amend such conditions; and

(b)together with the notice referred to in paragraph (a)—

(i)furnish the banking institution or microfinance banking institution with full particulars of the intended amendments to the conditions; and

(ii)request the banking institution or microfinance banking institution to, in writing and within the period of time specified in the notice, make written representations to the Bank relating to such intended amendments.

(7)A banking institution or microfinance banking institution that or any other person who contravenes or fails to comply with subsection (2) commits an offence and is liable to the penalties provided for in section 93(1).

15. Cancellation of authorisation

(1)The Bank, after consultation with the Minister and subject to subsection (2), may by notice in writing addressed and delivered to a banking institution or microfinance banking institution cancel, from a date specified in the notice, the authorisation to conduct banking business or microfinance banking business granted to the banking institution or microfinance banking institution under section 13 if the banking institution or microfinance banking institution—

(a)commences banking business or microfinance banking business in contravention of section 12(7) or 26(9);

(b)fails to commence with the conducting of banking business or microfinance banking business within a period of six months—

(i)after the date specified by the Bank in the certificate of authorisation to conduct banking business or microfinance banking business issued under section 13(2); or

(ii)if no date for commencement contemplated in subparagraph (i) is specified by the Bank, after the date of issue of the certificate of authorisation under section 13(2);

(c)fails to comply with any condition imposed by the Bank under section 12(4)(c);

(d)ceases to conduct the business for which it is authorised;

(e)is found guilty of an offence under any provision of this Act, and the Bank is of the opinion that the banking institution or microfinance banking institution concerned is conducting its business in a manner detrimental to the interest of its customers or the general public; or

(f)fails to comply with an instruction as contemplated in section 51(5), and the Bank is of the opinion that the banking institution or microfinance banking institution concerned is conducting its business in a manner detrimental to the interests of its customers or the general public.

(2)Before cancelling the authorisation of a banking institution or microfinance banking institution under subsection (1) the Bank, subject to subsection (5), must in writing give the banking institution or microfinance banking institution not less than 30 days written notice of its intention to so cancel the authorisation.

(3)A notice to a banking institution or microfinance banking institution referred to in subsection (2) must—

(a)state that the Bank intends to cancel the authorisation of the banking institution or microfinance banking institution;

(b)specify the reason or reasons for the intended cancellation; and

(c)invite the banking institution or microfinance banking institution to, within the period of time specified in the notice, in writing make representations to the Bank to show cause why the authorisation must not be cancelled.

(4)At the expiration of the 30 days period referred to in subsection (2), the Bank after considering the representations, if any, made by the banking institution or microfinance banking institution concerned and after consultation with the Minister may—

(a)cancel the authorisation under subsection (1);

(b)without cancelling the authorisation, amend the conditions subject to which the authorisation was granted; or

(c)decide not to cancel the authorisation or to amend the conditions as contemplated in paragraph (b),

and must within three working days in writing inform the banking institution or microfinance banking institution of the decision and the reasons for the decision of the Bank.

(5)Despite subsection (2), the Bank, after consultation with the Minister, in circumstances contemplated in subsection (1) and without prior notice, may direct a banking institution or microfinance banking institution by means of a notice delivered in accordance with section 35(4)(a), to summarily suspend all, or any part, of the banking business or microfinance banking business of the institution for such period and subject to such conditions as the Bank may specify in such notice.

(6)A banking institution or microfinance banking institution to which a notice under subsection (5) has been delivered may, within a period of 14 days after receipt of the notice, in writing submit to the Bank representations relating to the notice and to the suspension of its banking business or microfinance banking business, or part the of the business, under that subsection.

(7)On receipt of representations by a banking institution or microfinance banking institution under subsection (6) the Bank may—

(a)confirm or rescind the suspension made by it under subsection (5); or

(b)vary the conditions subject to which the banking business or microfinance banking business of the banking institution or microfinance banking institution was so suspended.

(8)A banking institution or microfinance banking institution that or any other person who refuses or fails to comply with a directive issued under subsection (5) commits an offence and is liable to the penalties provided for in section 93(1).

16. Repayment of deposits upon cancellation of authorisation

(1)If the authorisation to conduct banking business or microfinance banking business granted to a banking institution or microfinance banking institution has been cancelled or becomes invalid for any reason, the Bank must by written notice direct the banking institution or microfinance banking institution to—

(a)repay all moneys due by it to its depositors, including any interest on, or any other amounts owing by it in respect of, such monies; and

(b)change its name and amend its memorandum and articles of association in accordance with the directions and within the period of time specified by the Bank in the notice.

(2)The Bank may, under subsection (1)(a), specify different directives or periods of time in respect of different kinds of deposits.

(3)Despite subsection (2), the Bank, in specifying the directives or periods of time contemplated in that subsection, may not give any preference to any depositor which such depositor does not enjoy in terms of any other law.

(4)A banking institution or microfinance banking institution which in accordance with a notice under subsection (1) repays a deposit before the due date agreed upon for the repayment of the deposit, is not liable to pay any interest or any other amounts which would have been payable in respect of the deposit for the period calculated from the date of the actual repayment up to the due date.

(5)A banking institution or microfinance banking institution which fails to comply with a directive issued under subsection (1) must for the purposes of section 350 of the Companies Act be considered as being unable to pay its debts.

(6)Any banking institution or microfinance banking institution that or any other person who refuses or fails to comply with a directive issued under subsection (1) commits an offence and is liable to the penalties provided for in section 93(1).

17. Application for registration as controlling company

(1)A public company that—

(a)desires to exercise control over any banking institution or microfinance banking institution; or

(b)is a controlling company in respect of any other public company which—

(i)has been authorised to conduct banking business or microfinance banking business; or

(ii)has applied in terms of section 11 for authorisation to conduct banking business or microfinance banking business,

must apply to the Bank to be registered as a controlling company.

(2)An application made under subsection (1) must be—

(a)made in the form and manner determined by the Bank;

(b)signed by the directors on behalf of the company to be registered or by the subscribers to its memorandum and articles of association; and

(c)accompanied by the prescribed application fee.

(3)For the purposes of this section a person is considered to exercise control over a banking institution or microfinance banking institution if—

(a)in the case where that person is a company, the banking institution or microfinance banking institution is a subsidiary of that company; or

(b)that person, whether or not that person is a company, alone or together with his or her or its associates—

(i)holds shares in the banking institution or microfinance banking institution of which the total nominal value represents more than 50 per cent of the nominal value of all the issued shares of the banking institution or microfinance banking institution, unless, due to limitations on the voting rights attached to the shares so held by the person alone or together with his or her or its associates that person—

(aa)voting independently; or

(bb)voting as a group together with his or her or its associates,

is or are unable to decisively influence the outcome of the voting at a general meeting of the banking institution or microfinance banking institution;

(ii)is entitled to exercise more than 50 per cent of the voting rights in respect of the issued shares of that banking institution or microfinance banking institution; or

(iii)has the power to determine the appointment of the majority of the directors of that banking institution or microfinance banking institution, including—

(aa)the power to appoint or remove, without the concurrence of any other person, all or the majority of such directors; or

(bb)the power, alone and without the consent of any other person, to prevent any person from being appointed as director.

(4)If a person is appointed as a director of a banking institution or microfinance banking institution mainly because he or she is a director of the person who exercises control over a banking institution or microfinance banking institution, that appointment, for the purposes of subsection (3), is considered to be an appointment by virtue of the power of a person exercising that control.

(5)Despite subsection (3), if a person is considered to exercise control over a banking institution or microfinance banking institution on any other grounds, the Bank may subject that person to the provisions of this Act relating to a controlling company.

(6)If the applicant referred to in subsection (1) is a financial institution as defined in section 1 of the Namibia Financial Institutions Supervisory Authority Act the applicant must establish a legal entity separate from the operations of the applicant to carry on its business as a controlling company.

(7)If a company contemplated in subsection (1) has a financial institution as defined in section 1 of the Namibia Financial Institutions Supervisory Authority Act as part of its group of companies, the Bank and the Namibia Financial Institutions Supervisory Authority must enter into an agreement on matters of concurrent jurisdiction to give effect to the relevant legislation in respect of the functions of the Bank and the Authority.

(8)A person who exercises control or continues to exercise control over a banking institution or microfinance banking institution without having obtained approval to exercise such control as contemplated in subsection (1) commits an offence and is liable to the penalties provided for in section 92(2)(a).

18. Grant or refusal of application for registration as controlling company

(1)Before considering an application for registration as a controlling company made under section 17, the Bank must conduct such investigation, both within or outside Namibia, relating to the applicant or to the application as it may consider necessary to ascertain—

(a)that the registration of the applicant as a controlling company is not contrary to the public interest;

(b)that in the case of an applicant applying for registration in the circumstances referred to in section 17(1)(a), the applicant is able to establish control, as contemplated in that section, over the banking institution or microfinance banking institution concerned;

(c)that no provision of the memorandum or articles of association of the applicant is inconsistent with this Act or is undesirable in so far as it concerns banking institutions or microfinance banking institutions;

(d)that every director, principal officer or executive officer of the applicant, as far as can reasonably be ascertained—

(i)is a fit and proper person to hold the office of such director, principal officer or executive officer; and

(ii)has sufficient knowledge and experience to manage the affairs of the applicant in its capacity of a controlling company;

(e)that the applicant is in a financially sound condition;

(f)that no interest which any person has in the applicant is inconsistent with this Act; and

(g)that the application complies with the requirements of this Act.

(2)The Bank may not register as a controlling company an applicant that has applied for registration as such in the circumstances referred to in section 17(1)(b), unless the company in respect of which it made such application is an authorised banking institution or microfinance banking institution.

(3)After having considered an application made under section 17 the Bank may—

(a)refuse the application;

(b)grant the application; or

(c)grant the application subject to such conditions as the Bank may impose,

and must, before informing the applicant of its decision, in writing notify the Minister of the decision and where the application is refused or conditions are imposed, provide the applicant with reasons for the refusal of the application or imposition of conditions.

(4)If the Bank under subsection (3) grants an application for registration of a controlling company the Bank must, against payment of the non-refundable prescribed registration fee, register the applicant as a controlling company in respect of the banking institution or microfinance banking institution concerned and issue to the applicant a certificate of registration as a controlling company.

(5)A certificate referred to in subsection (4) must—

(a)be in the form;

(b)contain the particulars; and

(c)be issued and signed by a person,

determined by the Bank.

(6)A company that on the date of commencement of this Act is registered as a controlling company in respect of a banking institution or microfinance banking institution, is, with effect from that date, considered to be a controlling company registered as such in terms of this section in respect of the banking institution or microfinance banking institution concerned.

19. Cancellation of registration as controlling company

(1)Subject to subsection (2), the Bank may, by notice in writing addressed and delivered to a controlling company, cancel the registration of a controlling company from the date specified in the notice if the controlling company—

(a)has failed to establish control over the banking institution or microfinance banking institution in respect of which it is registered within a period of six months after the date of issue of the certificate of registration or any other date as the Bank may specify;

(b)no longer exercises such control in terms of section 33 or under any other circumstances; or

(c)has submitted a special resolution contemplated in section 208 of the Companies Act authorising such cancellation.

(2)If the authorisation of a banking institution or microfinance banking institution in respect of which a controlling company is registered is cancelled, the registration of that controlling company in respect of that banking institution or microfinance banking institution is deemed to have been cancelled simultaneously.

(3)The Bank may not cancel the registration of a controlling company under subsection (1)(a) or (b), unless the Bank has previously by notice in writing given the controlling company concerned an opportunity to make representations within a period specified in the notice, not being less than 30 days, on why its registration must not be cancelled.

20. Investments by controlling company

(1)The value of investments of a controlling company—

(a)in entities other than—

(i)banking institutions or microfinance banking institutions;

(ii)institutions which conduct business similar to the business of a banking institution or microfinance banking institution in a foreign state, country, colony or territory; or

(iii)controlling companies or companies of which the main object is the holding or development of property which is used or intended to be used mainly for the purpose of conducting the business of the banking institution or microfinance banking institution; or

(b)in fixed property which is not used or intended to be used mainly for the purpose of conducting the business of the banking institution or microfinance banking institution that it exercises control over,

may not at any time exceed a percentage of the sum of the capital funds of the controlling company or any banking institution or microfinance banking institution under its control, as determined by the Bank.

(2)A controlling company that contravenes or fails to comply with subsection (1) is liable to the penalties contemplated in section 94(1).

21. Restructuring within group of companies

(1)The restructuring of companies within a group of which a banking institution, microfinance banking institution or controlling company or a subsidiary of banking institution or microfinance banking institution is a member may not be effected without the prior written approval of the Bank.

(2)If any restructuring occurs after written approval has been granted under subsection (1), the banking institution, microfinance banking institution or controlling company concerned must immediately in writing inform the Bank of such restructuring which has so occurred together with full particulars of the restructuring.

(3)A banking institution, microfinance banking institution or controlling company that or any other person who contravenes or fails to comply with subsection (1) or (2) commits an offence and is liable to the penalties provided for in section 93(1).

22. Annual fees

(1)An authorised banking institution or microfinance banking institution must, subject to subsection (2), in respect of the authorisation to conduct business as a banking institution or microfinance banking institution and before 31 January of each year, pay to the Bank the prescribed annual fees in respect of that year.

(2)On receipt of a written request made by a banking institution or microfinance banking institution before the date for payment of the annual fees specified in subsection (1), and on good cause shown in writing, the Bank may grant an extension of time to that banking institution or microfinance banking institution for the payment of the fees for such period of time and subject to such conditions as the Bank may impose.

(3)If a banking institution or microfinance banking institution fails to pay the prescribed annual fees before or on the date specified in subsection (1) or within the extended period of time granted by the Bank under subsection (2)—

(a)the authorisation referred to in subsection (1) terminates on that date or on the last day of the extended period of time; and

(b)the unpaid annual fee and any penalty payable in terms of subsection (4)—

(i)becomes a debt due to the Bank by the banking institution or microfinance banking institution; and

(ii)may be recovered by the Bank from the banking institution or microfinance banking institution by means of action instituted in any court having jurisdiction.

(4)If a banking institution or microfinance banking institution fails to pay the annual fees payable in terms of subsection (1) on or before the date specified in that subsection, that banking institution or microfinance banking institution is, subject to subsection (2), liable for payment of a penalty at the prescribed rate, for such late payment of the annual fees.

23. Subsidiaries, branch offices, representative offices and other interests of banking institutions, microfinance banking institutions or controlling companies

(1)A banking institution or microfinance banking institution may not, without the prior written approval of the Bank—

(a)establish or acquire a subsidiary;

(b)open a branch outside Namibia;

(c)acquire any direct or indirect interest in any undertaking outside Namibia; or

(d)establish a representative office outside Namibia.

(2)A banking institution or microfinance banking institution must, not less than 30 days prior to the—

(a)opening of a branch in Namibia by the banking institution or microfinance banking institution;

(b)disposal of a subsidiary or of any interest in any other undertaking; or

(c)closing of a representative office or of a branch office,

in writing inform the Bank of the intended opening, disposal or closing.

(3)A controlling company may not, without the prior written approval of the Bank—

(a)establish or acquire a subsidiary in Namibia; or

(b)acquire any direct or indirect interest in any undertaking outside Namibia.

(4)A controlling company must, not less than 30 days prior to—

(a)the opening of a subsidiary;

(b)the disposal or closing of a subsidiary; or

(c)the disposal of any interest in any other undertaking,

in writing inform the Bank of the intended opening, disposal or closing.

(5)A banking institution, microfinance banking institution or controlling company that or any other person who contravenes or fails to comply with subsection (1), (2), (3) or (4) commits an offence and is liable to the penalties provided for in section 93(1).

24. Publication of information relating to banking institutions and microfinance banking institutions

The Bank, by notice in the Gazette and any other means that the Bank considers appropriate—

(a)must make known to the public—

(i)the authorisation of a person to conduct business as a banking institution or microfinance banking institution;

(ii)any change of name of a banking institution or microfinance banking institution;

(iii)the cancellation of an authorisation; or

(b)may make known to the public the suspension of the authorisation of the business or of any part of the business of a banking institution or microfinance banking institution,

under any provision of this Act.

25. Representative offices of foreign banking institutions

(1)A foreign banking institution may not establish a representative office in Namibia, unless the foreign banking institution has obtained the prior written approval of the Bank.

(2)A foreign banking institution that intends to establish a representative office in Namibia must apply to the Bank for the approval contemplated in subsection (1).

(3)An application made under subsection (2) must be—

(a)made in the form and manner determined by the Bank; and

(b)accompanied by—

(i)such particulars or documents relating to the application as the Bank may specify and inform the applicant; and

(ii)the prescribed application fee which is not refundable.

(4)The representative office in Namibia of a foreign banking institution—

(a)must, not less than 20 days prior to the foreign banking institution—

(i)changing its name;

(ii)substituting its chief representative officer;

(iii)changing the address or location of its representative office in Namibia; or

(iv)closing down the representative office,

in writing inform the Bank of such intended change, substitution or closing;

(b)may not conduct banking business in Namibia; and

(c)may only be engaged in such activities in Namibia as the Bank may approve and in writing inform the foreign banking institution.

(5)A foreign banking institution that or any other person who contravenes or fails to comply with subsection (1) or (4) commits an offence and is liable to the penalties provided for in section 93(1).

26. Branches of foreign banking institutions

(1)In this section a “foreign institution” means an institution which has been incorporated in a country other than Namibia and which lawfully conducts in such other country a business similar to banking business.

(2)A foreign institution may, despite section 10, with the prior written authorisation of the Bank and subject to conditions, if any, as the Bank may determine, conduct banking business by means of a branch in Namibia.

(3)A foreign institution that intends to conduct banking business by means of a branch in Namibia must apply to the Bank for the granting of an authorisation to conduct the banking business.

(4)An application made under subsection (3) must be—

(a)made in the form and manner determined by the Bank; and

(b)accompanied by—

(i)a written statement containing the information required by the Bank; and

(ii)the prescribed application fee which is not refundable.

(5)The Bank may require the foreign institution applying in terms of subsection (3) to furnish the Bank with—

(a)such information or documents, in addition to information and documents furnished by the foreign institution in terms of subsection (3); or

(b)such further information with regard to the nature and extent of supervision exercised or to be exercised by the responsible supervisory authority of the foreign institution’s state, country, colony or territory of domicile in respect of—

(i)the proposed branch in Namibia;

(ii)the foreign institution itself; or

(iii)any group of institutions of which the foreign institution may form a part,

as the Bank may consider necessary.

(6)After having considered an application made under subsection (2) the Bank must consult the Minister for his or her advice with respect to the application, and after giving due consideration to the advice the Bank may—

(a)refuse the application;

(b)grant the application; or

(c)grant the application subject to such conditions as the Bank may impose,

and must in writing notify the Minister before informing the applicant of its decision, and where the application is refused or conditions are imposed, provide the applicant with the reasons for the refusal of the application or imposition of conditions.

(7)If the Bank under subsection (6)(c) grants the application for authorisation to conduct banking business by means of a branch in Namibia subject to conditions, the Bank must provide the foreign institution with a provisional authorisation valid for not more than six months, to enable the foreign institution to prepare itself to start conducting banking business by means of a branch in Namibia.

(8)On application by the foreign institution to whom provisional authorisation has been granted, the Bank may extend the provisional authorisation for a period as the Bank considers appropriate in the circumstances.

(9)A foreign institution to whom a provisional authorisation has been granted may not commence with the conducting of banking business, unless the Bank has issued a certificate of authorisation to conduct the banking business concerned.

(10)An applicant to whom the Bank has granted a provisional authorisation under subsection (7) may within the six months’ period or any extended period, notify the Bank of its readiness to commence banking business after which the Bank must conduct a pre-opening examination to ascertain the extent of readiness.

(11)The Bank may not grant an application referred to in subsection (3), unless the Bank is satisfied that all the requirements as determined by the Bank have been met.

(12)If the Bank—

(a)under subsection (6) grants an application for authorisation to conduct banking business by means of a branch in Namibia; and

(b)after a pre-opening examination contemplated in subsection (10), has confirmed the readiness of the applicant to commence banking business,

the Bank must, against payment of the prescribed authorisation fee by or on behalf of the foreign institution that applied for the authorisation issue, in the name of the foreign institution, a certificate of authorisation to conduct banking business by means of a branch in Namibia.

(13)The provisions of section 13(3) and (4) apply with necessary changes to a foreign institution that has been issued with a certificate of authorisation to conduct banking business by means of a branch in Namibia under this section.

(14)Where the Bank has refused an application in terms of subsection (6)(a), the applicant may not lodge another application until a period of 12 months has lapsed from date of the refusal.

(15)A foreign institution that or any other person who—

(a)conducts banking business by means of a branch in Namibia without having obtained the Bank’s written authorisation referred to in subsection (1); or

(b)contravenes or fails to comply with subsection (9),

commits an offence and is liable to the penalties provided for in section 93(1).

27. Application of other provisions of Act to branches of foreign banking institutions

(1)A foreign banking institution authorised to conduct banking business by means of a branch in Namibia is construed as a banking institution in terms of this Act, and for all purposes this Act applies to any such branch, but the Minister, by notice in the Gazette and on the recommendation of the Bank, may exempt such branch from the application of certain provisions of this Act.

(2)Unless expressly stated otherwise, any reference to a banking institution in any other law includes, in so far as it may be relevant, a reference to a branch in Namibia of a foreign banking institution.

Part 4 – SHAREHOLDING IN BANKING INSTITUTIONS, MICROFINANCE BANKING INSTITUTIONS AND CONTROLLING COMPANIES

28. Restriction on shareholding in banking institutions, microfinance banking institutions and controlling companies

(1)Despite the Companies Act—

(a)a banking institution, microfinance banking institution or controlling company may not, without the prior written approval of the Bank, allot or issue, or register the transfer of, any of its shares to any person; or

(b)a person may not, without the prior written approval of the Bank, hold any shares in a banking institution, microfinance banking institution or controlling company,

to the extent that the nominal value of the shares held by that person or by a related party of that person exceeds the value specified in subsection (2).

(2)An approval to allot, issue, register or transfer or to hold a share under subsection (1) is required if the nominal value of—

(a)the shares allotted, issued, transferred or acquired under subsection (1); and

(b)any other shares in the banking institution, microfinance banking institution or controlling company already registered in the name of the person referred to in subsection (1) or in the name of any related party of that person,

is equal to or exceeds 10 per cent of the total nominal value of all issued vote-bearing shares in the banking institution, microfinance banking institution or controlling company.

(3)Despite the provisions of the Companies Act, a person referred to in subsection (1), who purchases shares through a nominee must, on his or her or its own, apply to the Bank for approval of the transaction.

(4)A transfer, registration or acquisition of shares of a listed banking institution, microfinance banking institution or controlling company is exempted from subsection (1), provided that the—

(a)banking institution or microfinance banking institution or controlling company transferring, allotting or registering the shares which are equal to or exceed 10 per cent of the issued vote bearing shares; or

(b)person acquiring listed shares through a stock exchange which, together with the nominal value of any other shares in the banking institution, microfinance banking institution or controlling company already registered in the name of such person or in the name of any related party of such person, are equal to or exceed 10 per cent of the issued vote bearing shares,

does, within five working days after such transfer, registration or acquisition of shares, apply to the Bank for approval of the transfer, registration or acquisition.

(5)Despite subsection (1) or (4), a single shareholder or group of related shareholders may not, without the prior written approval of the Bank, hold more than 50 per cent of the nominal value of the shares in a banking institution, microfinance banking institution or controlling company.

(6)On receipt of an application for approval contemplated subsection (1) or (5) the Bank may—

(a)refuse the application;

(b)approve the application; or

(c)approve the application subject to such conditions as the Bank may impose,

and must in writing inform the applicant of the decision, and where the application is refused or conditions are imposed, provide the applicant with the reasons for the refusal of the application or imposition of conditions.

(7)If the Bank under subsection (6)(a) refuses an application for approval of the acquisition or transfer of shares the Bank must in writing—

(a)furnish the applicant with a preliminary order in terms of section 35; and

(b)authorise the reversal of the transaction within a specified period of time.

(8)A banking institution, microfinance banking institution or controlling company may not allow a person who is not a fit and proper person in accordance with the criteria for fitness and probity relating to substantial shareholders as determined by the Bank, to become a substantial shareholder of the banking institution, microfinance banking institution or controlling company.

(9)A banking institution, microfinance banking institution or controlling company may not allot or issue, or register a transfer of, shares to a person—

(a)who is; or

(b)who will, as a result of the allotment, issue or registration, become,

a substantial shareholder of the banking institution, microfinance banking institution or controlling company, if such person is prohibited in terms of subsection (8) to be, or to become, a substantial shareholder of a banking institution, microfinance banking institution or controlling company.

(10)The Minister may, on the recommendation of the Bank, by notice in the Gazette amend any shareholder threshold or requirement specified under this section.

(11)A—

(a)banking institution, microfinance banking institution or controlling company that or any other person who contravenes or fails to comply with subsection (1)(a), (4)(a), (8) or (9) commits an offence and is liable to the penalties provided for in section 93(1).

(b)person who contravenes or fails to comply with subsection (1)(b), (3), (4)(b) or (5) commits an offence and is liable to the penalties provided for in section 92(2)(b).

29. Shareholder’s register and registration of shares

(1)A banking institution, microfinance banking institution or controlling company must, in such form and manner as the Bank may approve but subject to subsection (3), maintain a register of the current beneficial shareholders of all vote-bearing shares in the banking institution, microfinance banking institution or controlling company.

(2)The transfer of a share referred to in subsection (1) is not valid until such time as the transfer has been recorded in the register contemplated in that subsection.

(3)If the Bank is satisfied that the register kept by a banking institution, microfinance banking institution or controlling company in terms of section 99 of the Companies Act or a register or record kept in any central securities depository as defined in conditions applicable to the operation of central securities depositories issued under section 4(1)(f) of the Stock Exchanges Control Act clearly reflects—

(a)the particulars of the current beneficial holders; and

(b)a record of any change in the holders, of all the shares referred to in subsection (1),

the Bank may, at the request of the banking institution, microfinance banking institution or controlling company, in writing exempt the banking institution, microfinance banking institution or controlling company from the requirement to maintain the register contemplated in that subsection.

(4)Despite the provisions of the Companies Act to the contrary, a banking institution, microfinance banking institution or controlling company may not, without the prior written approval of the Bank—

(a)allot or issue any of its shares to, or register any of its shares in the name of, any person other than the intended beneficial shareholder;

(b)transfer any share in the name of any person other than the beneficial shareholder; or

(c)allow any of its shares registered in the name of a person other than the beneficial shareholder before the commencement date of this Act, to remain so registered.

(5)Subsection (4) does not affect the allotment or issue, or the registration of a transfer, of shares in a banking institution, microfinance banking institution or controlling company—

(a)in the name of a trustee of a unit trust scheme as defined in the Unit Trust Control Act or of a nominated company of the trustee approved by the Registrar of Unit Trust Companies referred to in that Act;

(b)in the name of an executor or administrator or a trustee, curator, guardian or liquidator, as the case may be, in the circumstances referred to in section 110(3) of the Companies Act; or

(c)for a period of not more than six months in the name of a stock broker, or in the name of a company established by him or her for any purpose contemplated in section 12(3) of the Stock Exchanges Control Act or in the name of an employee of the company,

if the banking institution, microfinance banking institution or controlling company is satisfied that the shares are allotted, issued or registered in such a manner in order to facilitate delivery of the shares to the purchaser of the shares.

(6)With respect to the shares that are allotted, issued or registered under subsections (5), the banking institution, microfinance banking institution or the controlling company must obtain information on—

(a)the identity of the person on whose behalf those shares are held or the beneficiary of the shares; and

(b)the number and class of shares held for each such person with a beneficial interest.

(7)The banking institution, microfinance banking institution or controlling company referred to in subsection (5) must in writing furnish the Bank with full particulars of the transaction, including the details of the beneficiary of the shares, relating to the allotment, issue or registration of the shares contemplated in that subsection.

(8)The voting rights attached to the shares registered in terms of subsection (5), unless otherwise determined by the Bank, may not be more than 25 per cent of the aggregate of the voting rights attached to all the issued shares of the banking institution, microfinance banking institution or controlling company concerned.

(9)A banking institution, microfinance banking institution or controlling company that contravenes or fails to comply with subsection (1), (4), (6) or (7) is liable to the penalties contemplated in section 94(1).

30. Furnishing of information by shareholders

(1)A person who has notified a banking institution, microfinance banking institution or controlling company that he or she or it intends to hold shares in the banking institution, microfinance banking institution or controlling company must, at the written request of the banking institution, microfinance banking institution or controlling company addressed to that person but subject to subsection (2), furnish the banking institution, microfinance banking institution or controlling company with the information or particulars specified in such request and which the banking institution, microfinance banking institution or controlling company considers necessary to enable it to comply with section 28, 29 or 34.

(2)The person referred to in subsection (1) must furnish the information or particulars contemplated in that subsection to the banking institution, microfinance banking institution or controlling company in such form as the banking institution, microfinance banking institution or controlling company may specify in the request contemplated in that subsection.

(3)A person who contravenes or fails to comply with subsection (1) or (2) commits an offence and is liable to the penalties provided for in section 92(2)(b).

31. Absence of wrongful intent

If a banking institution, microfinance banking institution or controlling company or any director, officer, employee or agent of the banking institution, microfinance banking institution or controlling company, on the strength of information or particulars reasonably obtained by it or him or her in good faith and without wrongful intent, acts or fails to act, as result of which the banking institution, microfinance banking institution or controlling company commits the offences specified in section 28(11), 29(9) or 34(13), that act or failure to act does not constitute the commission of any of those offences.

32. Effects of registration of shares contrary to Act

(1)A person may not—

(a)either personally or by proxy granted to any other person cast a vote attached to; or

(b)receive a dividend payable in respect of,

any share in a banking institution or microfinance banking institution or controlling company allotted or issued to him or her, or registered in his or her name, in contravention of any provision of this Act.

(2)A vote cast in contravention of subsection (1)(a) is void.

(3)A dividend referred to in subsection (1)(b) does not accrue to the person referred to in that subsection, but accrues to the banking institution, microfinance banking institution or the controlling company concerned.

(4)A person who contravenes or fails to comply with subsection (1) commits an offence and is liable to the penalties provided for in section 92(2)(a).

33. Restriction on right to control banking institution or microfinance banking institution

(1)A person may not acquire, or directly or indirectly exercise control over, a banking institution or microfinance banking institution, unless that person is—

(a)a fit and proper person as contemplated in section 28(8);

(b)incorporated as a company under the Companies Act; and

(c)registered as a controlling company in terms of section 18 in respect of such banking institution or microfinance banking institution.

(2)Subsection (1) does not apply to a person who—

(a)holds shares whose nominal value is less than that specified in section 28(1); or

(b)holds shares that have been acquired in the circumstances referred to in section 28(4).

(3)The Bank, by notice in writing addressed to a person, may prohibit a person from acquiring or exercising control over a banking institution or microfinance banking institution or to continue to exercise such control within a period specified in the notice if in the opinion of the Bank the person—

(a)is not fit and proper having regard to the structure and business activities of the corporate group of which the person is a member;

(b)has furnished the Bank in, or in connection with, its application for registration with information which is in a material respect untrue;

(c)is conducting its business in a manner detrimental to the banking institution or microfinance banking institution in respect of which it was registered as a controlling company; or

(d)has contravened or failed to comply with a provision of or a requirement under this Act.

(4)The notice under subsection (3), in the case of a company registered as a controlling company, must—

(a)compel that company to reduce, within a period determined by the Bank, the shareholding of that company in that banking institution or microfinance banking institution to a shareholding with a total nominal value of not more than 20 percent of the total nominal value of all the issued shares of the banking institution or microfinance banking institution concerned;

(b)limit, with immediate effect, the voting rights that may be exercised by that person by virtue of the shareholding of that person to not more than 20 percent of the voting rights attached to all the issued shares of the banking institution or microfinance banking institution concerned; or

(c)limit, with immediate effect, the power to appoint or remove, without the concurrence of any other person, all or the majority of the directors of the banking institution or microfinance banking institution concerned.

(5)Any person who contravenes or fails to comply with subsection (1) or a notice issued under subsection (3) commits an offence and is liable to the penalties provided for in section 92(2)(a).

34. Restriction on foreign shareholding in banking institutions and microfinance banking institutions

(1)For the purposes of this section—“foreign national” means—(a)a natural person who is not a Namibian;(b)a company incorporated, registered or constituted in accordance with the laws of—(i)Namibia; or(ii)any state, country, colony or territory other than Namibia,that is not directly or indirectly owned or controlled by a Namibian;(c)a close corporation that is registered in accordance with the laws of—(i)Namibia; or(ii)in any state, country, colony or territory other than Namibia,that is not directly or indirectly owned or controlled by a Namibian; or(d)a trust or other juristic person established or registered in Namibia, or in any state, country, colony or territory other than Namibia, that is not directly or indirectly owned or controlled by a Namibian; and“Namibian” means—(a)a natural person who is a citizen of Namibia;(b)a natural person who is a permanent resident of Namibia and is in possession of a permanent residence permit issued to him or her in terms of the Immigration Control Act, 1993 (Act No. 7 of 1993);(c)a company incorporated, registered or constituted in accordance with the laws of Namibia or any state, country, colony or territory other than Namibia—(i)of which the majority of the issued share capital is directly or indirectly owned by a person referred to in paragraph (a) or (b); or(ii)which is directly or indirectly controlled by a person referred to in paragraph (a) or (b);(d)a close corporation that is registered in accordance with the laws of Namibia or in any state, country, colony or territory other than Namibia—(i)of which the majority of the members’ interests are directly or indirectly owned by a person referred to in paragraph (a) or (b); or(ii)which is directly or indirectly controlled by a person referred to in paragraph (a) or (b); or(d)a trust or other juristic person established or registered in Namibia or in any state, country, colony or territory other than Namibia—(i)of which the majority of the interests in the trust or juristic person are directly or indirectly owned by a person referred to in paragraph (a) or (b); or(ii)which is directly or indirectly controlled by a person referred to in paragraph (a) or (b).[Please note: numbering as in original.]

(2)Despite anything to the contrary in this Act or in any other law, but subject to subsections (8) and (10)—

(a)a banking institution, microfinance banking institution or controlling company may not, without the prior written approval of the Bank, allot, issue, or register the transfer of, any of its shares to any foreign national; or

(b)a foreign national may not, without the prior written approval of the Bank, acquire shares in a banking institution, microfinance banking institution or controlling company,

to the extent that the nominal value of of the vote bearing shares held by that foreign national or by a related party of that foreign national exceeds the value specified in subsection (3).

(3)An approval to allot, issue, register or transfer or to hold shares under subsection (1) is required if the nominal value of—

(a)the shares allotted, issued, transferred or acquired under subsection (2); and

(b)any other shares in the banking institution, microfinance banking institution or controlling company already registered in the name of the foreign national referred to in subsection (2) or in the name of any related party of that foreign national,

is equal to or exceeds 75 per cent of the total nominal value of all issued vote-bearing shares in the banking institution, microfinance banking institution or controlling company.

(4)Despite the provisions of subsection (2), a single foreign national or a group of related foreign nationals may not, without the prior written approval of the Bank, acquire more than 50 percent of the nominal value of the shares in a banking institution, microfinance banking institution or controlling company.

(5)In case there is no suitable Namibian to hold a minimum of 25 percent shareholding or shareholding interest in the banking institution, microfinance banking or controlling company at the time when an authorisation is granted to—

(a)conduct banking business or microfinance banking business; or

(b)be a controlling company,

the banking institution, microfinance banking or controlling company must ensure that the shareholding requirements of subsection (2) are complied with within the period specified by the Bank when granting the authorisation and subject to such conditions and prudential requirements as the Bank may further determine.

(6)A banking institution, microfinance banking or controlling company to which the provisions of this section applies must, at such intervals of time as determined by the Bank, provide written reports to the Bank on the status and progress made with regard to its compliance with the minimum local shareholding requirements throughout the period referred to in subsection (5).

(7)A banking institution, microfinance banking institution or controlling company must, in terms of subsection (5), submit to the Bank, simultaneously with the application for authorisation to conduct banking business or microfinance banking business or to exercise control over a banking institution or microfinance banking institution, a programme to comply with the provisions of that subsection—

(a)making a share offer in accordance with the programme approved by the Bank;

(b)ensuring that the share buying offer referred to in paragraph (a) is offered to fit and proper Namibians through—

(i)private offers to Namibian private, corporate and institutional investors; or

(ii)public offers on an exchange.

(8)If the Minister considers it to be in the economic interest of Namibia, the Minister, on the recommendation of the Bank and on such conditions and requirements as may be prescribed, may permit a foreign national to acquire more than 75 per cent of the nominal value of the issued vote bearing shares in a banking institution, microfinance banking institution or controlling company.

(9)When a banking institution, microfinance banking institution or controlling company is listed on more than one exchange the initial total shares allotted to a foreign national, its associates or related parties may not exceed 75 percent of the nominal value of the vote-bearing shares of that banking institution, microfinance banking institution or controlling company.

(10)The provisions of subsection (2) will no longer be a requirement after the banking institution, microfinance banking institution or controlling company has been listed on an exchange, provided that—

(a)the requirements of subsection (9) have been met;

(b)in addition to the provisions of section 28, a foreign national, its associates or related parties with a combined pre-listing allotted shareholding in excess of five percent of the nominal value of the vote bearing shares of that banking institution, microfinance banking institution or controlling company may not be allowed to increase their shareholding without the written approval of the Bank; and

(c)in addition to the provisions of section 28, a foreign national, its associates or related parties may not be allowed to acquire shares in excess of five percent of the nominal value of the vote bearing shares of that banking institution, microfinance banking institution or controlling company in total, after the banking institution, microfinance banking institution or controlling company was listed on an exchange, without the written approval of the Bank.

(11)The provisions of this section do not apply with respect to a banking institution, microfinance banking institution or controlling company that, before the commencement of this section, was authorised to conduct banking business under the law repealed by section 109.

(12)The provisions of sections 29, 30, 31, 32 and 33(1), (3), (4) and (5) apply with such changes and modifications as may be required by the context to—

(a)shares, or rights or interests in shares, in a banking institution, microfinance banking institution or controlling company that are held by; or

(b)a shareholder of, or a beneficiary owner, beneficiary shareholder or beneficiary of shares, rights or interests in shares in, a banking institution, microfinance banking institution or controlling company who is,

a foreign national referred to in this section.

(13)A—

(a)banking institution, microfinance banking institution or controlling company that contravenes or fails to comply with subsection (2)(a) or to comply with the requirements of subsection (6) is liable to the penalties contemplated in section 94(1); or

(b)person who contravenes or fails to comply with subsection (2)(b) or (4) commits an offence and is liable to the penalties provided for in section 92(2)(b).

35. Preliminary orders prohibiting certain things

(1)If the Bank is satisfied that a banking institution, microfinance banking institution, controlling company or any other person has contravened or has failed to comply with any provision of section 28, 29, 30, 33 or 34, the Bank may in writing issue a preliminary order imposing one or more of the restrictions specified in subsection (2) on the—

(a)banking institution, microfinance banking institution or controlling company; or

(b)person,

as the Bank may consider appropriate.

(2)A preliminary order issued by the Bank under subsection (1) may in respect of any of the shares forming the subject of, or related to, the contravention or failure referred to in that subsection prohibit—

(a)the transfer of, or the due performance in terms of any agreement to transfer, the shares;

(b)in the case of unissued shares, the transfer of, or the right to be issued with, the unissued shares;

(c)the exercise of any voting rights in respect of the shares;

(d)the issue of any further shares in pursuance to any offer made to the holder of the shares; or

(e)except in the case of liquidation, the payment of any amount of money due by the banking institution, microfinance banking institution or controlling company in respect of the shares.

(3)A preliminary order issued by the Bank under subsection (1) must—

(a)be in the form required, and signed by a person appointed, by the Bank;

(b)be addressed to the banking institution, microfinance banking institution, controlling company or person concerned; and

(c)specify and contain full particulars of the order issued by the Bank.

(4)An authorised officer must, during normal hours of business, deliver the preliminary order issued by the Bank under subsection (1)—

(a)in the case of a banking institution, microfinance banking institution or controlling company—

(i)to the principal officer of that banking institution, microfinance banking institution or controlling company; or

(ii)if the principal officer referred to in subparagraph (i) is not available, to any person who is aged 18 years or above employed by that banking institution, microfinance banking institution or controlling company; or

(b)in the case of the other person referred to in subsection (1)(b)—

(i)to that other person; or

(ii)if that person is not available, to any person who is aged 18 years or above employed by that other person.

(5)The person to whom a preliminary order is delivered in terms of subsection (4) must—

(a)in writing acknowledge receipt of the order, specifying—

(i)his or her full names and designation; and

(ii)the date and time of such receipt; and

(b)sign the acknowledgment of receipt contemplated in paragraph (a).

(6)The Bank, at its discretion and in addition to the delivery of the preliminary order in terms of subsection (4) to the—

(a)banking institution, microfinance banking institution or controlling company; or

(b)other person referred to subsection (1)(b),

may publish, in the manner and form as the Bank may specify, the preliminary order in one or more newspapers circulating widely in Namibia.

(7)A—

(a)person who contravenes or fails to comply with a prohibition imposed in a preliminary order issued under subsection (2) commits an offence and is liable to the penalties provided for in section 92(2)(b); or

(b)banking institution, microfinance banking institution or controlling company that contravenes or fails to comply with a prohibition imposed in a preliminary order issued under subsection (2) is liable to the penalties contemplated in section 94(1).

36. Effect of compliance with and enforcement of preliminary order

(1)A preliminary order delivered to a banking institution, microfinance banking institution, controlling company or other person in terms of section 35(4) is, from the date of such delivery, binding on the banking institution, microfinance banking institution, controlling company or the other person to whom the order is directed and to whom it is delivered in terms of that subsection.

(2)A person holding shares in a banking institution, microfinance banking institution or controlling company and to whom a preliminary order has been delivered in terms of section 35(4) must, within—

(a)seven days after the date of such service; or

(b)such longer period of time as the Bank may allow,

surrender the share certificates concerned to the Bank, together with such other documents relating to the shares as the Bank may specify in the order.

(3)Any person to whom a preliminary order has been delivered in terms of section 35(4) or any other person prejudiced by the order may within a period of 14 days after the date—

(a)of service of the order; or

(b)on which he or she became aware of the order,

make an application to the Bank, supported by written representations, for—

(i)the cancellation of the order on the grounds that the person has not contravened, or has not failed to comply with, any provision of this Act as specified in the order; or

(ii)an amendment of the order on the grounds specified in the application.

(4)The Bank, after considering the application and representations made to it in terms of subsection (3), may—

(a)confirm the preliminary order;

(b)cancel the preliminary order; or

(c)confirm the preliminary order subject to such conditions or amendments as the Bank may consider appropriate.

(5)If the Bank confirms a preliminary order under subsection (4), the Bank may dispose of the shares surrendered to it in terms of subsection (2), in such manner as it may consider appropriate, to a person qualified to hold such shares as determined by the Bank in terms of this Act.

(6)The Bank must, subject to subsection (7), pay over the proceeds of a sale of shares under subsection (5) to the person entitled to the proceeds.

(7)If the Bank is for any reason unable to pay the proceeds referred to in subsection (6) to the person entitled to them under that subsection, section 72(1) does, with the necessary changes, apply to the proceeds.

(8)The Bank may in writing give such instructions or directions to the—

(a)directors or officers of a banking institution, microfinance banking institution or controlling company; or

(b)other person,

referred to in section 35(1) as the Bank may consider necessary to give effect to an order made by the Bank under this section.

(9)Any transaction, including any agreement or arrangement, in relation to any shares or security or to any interest in any shares or security, which is in contravention of—

(a)any order made under section 35; or

(b)any instruction or direction given by the Bank under subsection (8),

is void.

(10)The Bank may, irrespective of whether the person contemplated in section 35(1) has been prosecuted or not in respect of the contravention of, or failure to comply with, a provision of this Act referred to in that subsection, make a preliminary order or take such other steps as the Bank may consider appropriate.

(11)A person who—

(a)contravenes or fails to comply with subsection (2) commits an offence and is liable to the penalties provided for in section 92(2)(b); or

(b)fails to comply with any instruction or direction given under subsection (8) commits an offence and is liable to the penalties provided for in section 92(2)(a).

Part 5 – RECOVERY PLANS AND PRUDENTIAL REQUIREMENTS AND LIMITATIONS

37. Recovery plans

(1)A banking institution, microfinance banking institution or controlling company must prepare and maintain a recovery plan, on an individual or consolidated basis, containing the arrangements and measures to address a possible severe financial distress situation such institution or company may face, in such form or manner as may be determined by the Bank.

(2)A banking institution, microfinance banking institution or controlling company must review its recovery plan prepared and maintained in terms of subsection (1) at such times as may be determined by the Bank.

(3)The recovery plan must be designed in such a way that identifies possible recovery measures and the necessary steps and time needed to implement such measures and assess the associated risks.

(4)The Bank may determine that only certain categories of banking institutions, microfinance banking institutions or controlling companies are required to submit for review by the Bank the recovery plans referred to in subsection (1).

(5)The range of possible recovery measures include—

(a)actions to strengthen the capital adequacy requirements such as recapitalisation after extraordinary losses and capital conservation measures that include suspension of dividends and payments of variable remuneration;

(b)the possibility of sale of subsidiaries;

(c)the possibility of voluntary restructuring of liabilities through debt-to-equity conversion;

(d)measures to secure sufficient funding while ensuring sufficient diversification of funding sources and adequate availability of collateral in terms of volume, location and quality; and

(e)measures to be taken to transfer liquidity and assets within the banking group.

(6)The Bank may request the banking institution, microfinance banking institution or controlling company submitting a recovery plan for review in terms of subsection (4) to—

(a)provide additional information or records the Bank considers necessary in order to evaluate the adequacy of the submitted recovery plan;

(b)supplement the recovery plan with a plan indicating how to negotiate with all or some of the creditors of the banking institution, microfinance banking institution or controlling company in order to restructure its loan capital, debt or accounts payable in general if circumstances dictate such actions;

(c)amend the recovery plan in order to make it more effective; or

(d)apply the recovery plans or parts of the plans in keeping with a specific timetable.

38. Standards of corporate behaviour

(1)A banking institution or microfinance banking institution or the holding company of the banking institution or microfinance banking institution must—

(a)in respect of its activities conducted in Namibia or its subsidiaries;

(b)in accordance with guidelines, circulars or notices issued by the Bank under section 3; and

(c)to the satisfaction of the Bank,

at all times conduct its business in a prudent manner and consistent with the best standards and practices of corporate governance and sound financial management.

(2)Unless otherwise prescribed or determined by the Bank, a banking institution, microfinance banking institution or controlling company must comply with the standards of corporate governance generally practised, or required to be so practised, by companies listed on any stock exchange established in Namibia under the Stock Exchanges Control Act.

(3)A banking institution, microfinance banking institution or controlling company that contravenes or fails to comply with subsection (1) or (2) is liable to the penalties contemplated in section 94(1).

39. Minimum capital funds

(1)The minimum capital funds, unimpaired by losses, of a banking institution or microfinance banking institution may not, subject to subsection (2), (4) or (5), at any time be less than the greater of an amount—

(a)determined by the Bank; or

(b)an amount which represents a percentage of the risk weighted assets and other exposures of a banking institution or microfinance banking institution as the Bank may determine.

(2)Despite any provision to the contrary in this section the Bank, based on the assessment made, if it concludes that—

(a)there is a risk of the existing capital funds of a banking institution or microfinance banking institution being inadequate, may require the banking institution or microfinance banking institution to acquire additional capital funds within a period as the Bank may specify; or

(b)a banking institution or microfinance banking institution is a systemically important institution, may subject such banking institution or microfinance banking institution to more advanced capital requirements as may be determined by the Bank.

(3)The Bank—

(a)on application in writing and on good cause shown may in writing permit a banking institution or microfinance banking institution to, for such limited period of time as the Bank may specify, have capital funds which are lower than the capital funds determined by or under subsection (1), and which limited period of time and the amount of the lower capital funds must be specified in the permission;

(b)may determine that the capital—

(i)requirements of a banking institution or microfinance banking institution contemplated in subsection (1) must, on a consolidated basis apply to; and

(ii)of the banking institution or microfinance banking institution be reflected in the consolidated accounts of,

the banking institution, microfinance banking institution, and its holding company or an affiliate or associate of the banking institution, microfinance banking institution and its holding company; or

(c)for the purposes of this section, may determine the percentage and risk weighting of assets or other exposures.

(4)A banking institution, microfinance banking institution or controlling company that contravenes or fails to comply with subsection (1) or to comply with a requirement or condition imposed by the Bank under subsection (2) is liable to the penalties contemplated in section 94(1).

40. Minimum capital funds in respect of banking group

(1)Despite section 39(1) but subject to subsection (2), a controlling company must manage its affairs in such a way that the—

(a)sum of the capital funds of the banking group structured under that controlling company does not at any time amount to less than an amount which represents a determined percentage of the sum of amounts relating to the different categories of assets and other risk exposures and calculated in such a manner as may be determined by the Bank; and

(b)capital funds of any entity regulated in terms of any law of Namibia included in the banking group and structured under that controlling company do not at any time amount to less than the required amount of capital funds determined in respect of the relevant regulated entity included in such banking group in accordance with the rules and regulations of the relevant regulator responsible for the supervision of the relevant entity.

(2)In calculating the aggregate amount a banking group is required to maintain in terms of subsection (1), the sum of the banking group’s capital funds is calculated by deducting from it such amounts as may be determined by the Bank.

(3)Despite paragraphs (a) and (b) of the definition of “banking group”, the Minister, on the recommendation of the Bank given after having regard to the structure and business activities of a banking group, may by notice in the Gazette include in, or exclude from, that definition any person or category of persons.

41. Composition of capital funds

For the purposes of section 39, the Bank may determine the composition and proportions of the different classes of capital constituting capital funds in that section and other requirements and criteria of approval of such capital funds.

42. Provision to be made for certain matters

(1)A banking institution or microfinance banking institution must, in order to ascertain whether the banking institution or microfinance banking institution is complying with section 39 or before any dividend is declared, take into account and in its calculations make provision for—

(a)bad, doubtful or substandard debts and the depreciation of assets to be calculated not less than quarterly on an annual basis;

(b)operating losses, including depreciation and bad debts not yet written off;

(c)any amount representing expenses relating to the organisation or extension of business or goodwill, or other intangible assets, to be calculated not less than quarterly on an annual basis; and

(d)such other item or items as the Bank may determine.

(2)The minimum standards for provision for bad, doubtful or substandard debts, the accounting treatment and suspension of interest of non-performing loans contemplated in subsection (1) are as determined by the Bank.

(3)If a capital requirement is to be applied on a consolidated basis in terms of section 39(3)(b), subsection (1) applies to all persons within the banking group constituting the consolidation.

(4)A banking institution, microfinance banking institution or controlling company that contravenes or fails to comply with subsection (1) is liable to the penalties contemplated in section 94(1).

43. Minimum liquid assets

(1)The Bank may determine the minimum, or minimum average, liquid assets which a banking institution or microfinance banking institution must hold at any time or over the period of time as specified in the determination.

(2)If a banking institution or microfinance banking institution fails to comply with a determination under subsection (1) it must immediately in writing report such failure to the Bank and must in such report state the reasons for such failure.

(3)During any period of time which a banking institution or microfinance banking institution fails, or is unable, to comply with a determination under subsection (1), it may not grant any loan or credit to any person without the prior written approval of the Bank.

(4)A banking institution or microfinance banking institution that contravenes or fails to comply with subsection (2) or (3) is liable to the penalties contemplated in section 94(1).

44. Restrictions on dividends

(1)A banking institution or microfinance banking institution may not declare, pay or credit dividends or make any transfer from its profits unless its—

(a)capital funds are adequate as contemplated in section 39; or

(b)minimum liquidity requirements are above the required limits as determined by the Bank and contemplated in section 43.

(2)If the dividends to be paid, declared, credited or any transfer to be made in terms of subsection (1)—

(a)exceed current audited profits; or

(b)may result in an impact on capital adequacy requirements, usage or draw down on conservation buffers as determined by the Bank or minimum liquidity requirements,

prior written approval of the Bank must be obtained.

(3)A banking institution or microfinance banking institution that contravenes or fails to comply with subsection (1) or (2) is liable to the penalties contemplated in section 94(1).

45. Minimum local assets

(1)The Bank must determine the minimum local assets that must be maintained by a banking institution or microfinance banking institution for purposes of this section.

(2)A banking institution or microfinance banking institution must maintain the minimum local assets as determined by the Bank under subsection (1).

(3)For the purposes of this section, “local assets” means any asset consisting of exposures with persons permanently resident in Namibia and other assets situated in Namibia in the currency of Namibia.

(4)A banking institution or microfinance banking institution that contravenes or fails to comply with subsection (2) is liable to the penalties contemplated in section 94(1).

46. Large exposures and concentrations of credit

(1)A banking institution or microfinance banking institution may not, without the prior written approval of the Bank, undertake exposure to a single person, a group of related parties or to any industry in or outside Namibia which exceeds such percentage of its capital funds as the Bank may determine.

(2)The total amount of large exposures of a banking institution or microfinance banking institution may not exceed such percentage of its capital funds as the Bank may determine.

(3)For the purposes of this section, the Bank may determine the meaning of a “single borrower” or a “group of related persons” or of a “large exposure”.

(4)A banking institution or microfinance banking institution that contravenes or fails to comply with subsection (1) or (2) is liable to the penalties contemplated in section 94(1).

47. Lending against own shares or debt instruments

(1)A banking institution or microfinance banking institution may not, directly or indirectly, lend money or issue guarantees against the security of—

(a)the shares; or

(b)such debt instruments which may qualify as capital,

of the banking institution or microfinance banking institution, of the holding company of the banking institution or microfinance banking institution or of any subsidiary of the banking institution or microfinance banking institution.

(2)A banking institution or microfinance banking institution that or any other person who contravenes or fails to comply with subsection (1) commits an offence and is liable to the penalties provided for in section 93(1).

48. Exposure to directors, executive officers or shareholders

(1)A banking institution or microfinance banking business may not have any exposure to any—

(a)director or executive officer in the banking institution, microfinance banking business or controlling company;

(b)substantial shareholder in the banking institution or microfinance banking institution or controlling company;

(c)external auditor of the banking institution, microfinance banking institution or controlling company, who in the case of a firm or partnership of auditors is for purposes of this paragraph is limited to the leading or engagement partner or the manager in charge of the audit;

(d)affiliate, associate or close relative of a person referred to in paragraph (a), (b) or (c);

(e)body corporate or unincorporated of, or in which, a person referred to in paragraph (a), (b) or (c) is a director, a substantial shareholder or a guarantor or otherwise has an economic or a financial interest; or

(f)proxy of a director or substantial shareholder referred to in paragraph (a) or (b),

except if such exposure complies with the requirements for exposures to connected persons as determined by the Bank.

49. Terms of exposure to directors, executive officers and shareholders

The Bank must determine the criteria and conditions to be employed for establishing the acceptability or evaluation of collateral for the purpose of borrowing from a banking institution, microfinance banking institution or controlling company by directors, executive officers and shareholders of the banking institution, microfinance banking institution or controlling company concerned.

50. Exposure to holding companies, subsidiaries and affiliates

(1)Despite section 234 of the Companies Act but subject to subsections (2) and (3), a banking institution or microfinance banking institution may grant a loan, an advance or a credit facility to its holding company, subsidiary or affiliate.

(2)A banking institution or microfinance banking institution may not grant a loan, an advance or a credit facility under subsection (1), unless such loan, advance or credit facility—

(a)is subject to the criteria or conditions for the granting of, or the terms and conditions relating to the payment of interest on, or the repayment of, the loan, advance or credit facility which is not more favourable than the criteria or conditions ordinarily applicable to any member of the public; and

(b)has been approved by the majority of the entire board of directors.

(3)Despite subsection (2), a banking institution or microfinance banking institution may not grant a loan, an advance or a credit facility in excess of a percentage of its capital funds as the Bank may determine, unless all amounts in excess of the percentage so determined are fully secured at all times.

(4)A banking institution or microfinance banking institution that or any other person who grants a loan, an advance or a credit facility in contravention of this section commits an offence and is liable to the penalties provided for in section 93(1).

51. Restriction on commercial activities

(1)A banking institution may only conduct financial business or transactions which are usually or ordinarily conducted by banking institutions in terms of this Act or of any other law.

(2)A microfinance banking institution may only, subject to subsection (7), conduct financial business or transactions as may be determined by the Bank.

(3)A banking institution or microfinance banking institution may not, subject to subsection (7), conduct or have any direct interest in any non-banking activities unless such activities—

(a)are permitted in terms of subsection (1) or (2); or

(b)may, in exceptional circumstances, be necessary in the course of—

(i)the banking business of the banking institution or the microfinance banking business of the microfinance banking institution;

(ii)satisfaction of debts which may be incurred as a result of the banking business or microfinance banking business referred to in subparagraph (i); or

(iii)any trusteeship or the administration of the estate of a deceased person.

(4)The Minister, on the recommendation of the Bank, may by notice in the Gazette define the activities of a banking institution or microfinance banking institution contemplated in subsection (3).

(5)If a banking institution or microfinance banking institution—

(a)fails to comply with this section; or

(b)conducts activities which are in contravention of this section,

the Bank may, by means of a written notice delivered to such banking institution or microfinance banking institution in accordance with section 35(4), instruct such banking institution or microfinance banking institution to, within the period of time specified in the instruction, comply with this section or to discontinue the activities so conducted in contravention of this section.

(6)If a banking institution or microfinance banking institution fails to comply with an instruction under subsection (5), the Bank may, under section 15, cancel the authorisation to conduct banking business or microfinance banking business granted to the banking institution or microfinance banking institution.

(7)The Bank, upon a written application made by a banking institution or microfinance banking institution and delivered to the Bank and subject to such conditions as the Bank may impose, may exempt the banking institution or microfinance banking institution from—

(a)the restrictions in subsection (3); or

(b)such provisions of subsection (3) as the Bank may specify in the exemption.

(8)A banking institution or microfinance banking institution that or any other person who contravenes or fails to comply with subsection (1), (2) or (3) or a written instruction issued by the Bank under subsection (5) commits an offence and is liable to the penalties provided for in section 93(1).

52. Limitations on investment in property

(1)A banking institution or microfinance banking institution may not, directly or indirectly, purchase, acquire or take on lease any immovable property, except—

(a)subject to subsection (2), as may be necessary for—

(i)the purposes of conducting its banking business or microfinance banking business;

(ii)housing its staff; or

(iii)such other purposes or in such other circumstances as the Bank may determine; or

(b)as otherwise provided for in this section.

(2)The total amount of the investments made or disbursed in respect of the purchases, acquisitions or leases by a banking institution or microfinance banking institution under subsection (1) may not, unless otherwise approved by the Bank upon a written application and on good cause shown by the banking institution or microfinance banking institution concerned, exceed a percentage of the capital funds of the banking institution or microfinance banking institution as determined by the Bank.

(3)A banking institution or microfinance banking institution may, against any immovable property, secure—

(a)a debt owing to itself by; or

(b)an advance made or to be made by itself to,

any person, whether or not the ownership in respect of the property vests in or the property is registered in the name of the person or any other person.

(4)If—

(a)there is a default in the repayment of a debt or an advance referred to in subsection (3); or

(b)the property referred to in subsection (3) is for any reason sold in execution or in any other manner,

the banking institution or microfinance banking institution concerned may, subject to subsection (5) and to such requirements as may be determined by the Bank, and to the extent that is reasonably necessary to ensure the repayment of the debt or advance due to it, acquire such property.

(5)The acquisition of property by a banking institution or microfinance banking institution under subsection (4) must, for a period not longer than five years from the date of the acquisition, not be deemed to be property acquired as contemplated subsection (1)(a).

(6)A banking institution or microfinance banking institution that contravenes or fails to comply with subsection (1) or (2) is liable to the penalties contemplated in section 94(1).

Part 6 – DIRECTORS, PRINCIPAL OFFICERS AND AUDITORS

53. Directors, principal officers and executive officers of banking institutions and microfinance banking institutions

(1)A banking institution, microfinance banking institution or controlling company may not, subject to subsection (2), have less than five directors.

(2)Not more than two of the total number of the directors contemplated in subsection (1) may be employed by the banking institution, microfinance banking institution or controlling company concerned, any of its subsidiaries or its holding company, including any of the subsidiaries of the holding company.

(3)The Bank, on a written request by a banking institution or microfinance banking institution, may in writing exempt the banking institution or microfinance banking institution from subsection (1) or (2) for such period, and subject to such conditions, as the Bank may impose and specify in such exemption.

(4)A banking institution, microfinance banking institution or controlling company may not appoint a person as a director, principal officer or an executive officer, unless the banking institution, microfinance banking institution or controlling company—

(a)is satisfied that the person is fit and proper in accordance with criteria determined by the Bank to hold such position; and

(b)has notified the Bank in a manner determined by the Bank, that the banking institution, microfinance banking institution or controlling company is satisfied that the person to be appointed meets the requirements of paragraph (a).

(5)Every banking institution, microfinance banking institution or controlling company must give the Bank a written notice of the nomination of any person for appointment as a director or principal officer or an executive officer by furnishing the Bank with information in the form and manner determined by the Bank, and the notice must reach the Bank at least 30 days prior to the proposed date of appointment.

(6)The Bank—

(a)may object to the proposed nomination for appointment referred to in subsection (5) on grounds that such director or principal officer or executive officer is not fit and proper to hold such position as determined by the Bank; and

(b)must within 20 days of receipt of the notice referred to in subsection (5) deliver a written notice stating the grounds of its objection as contemplated in paragraph (a) to the nominating banking institution, microfinance banking institution or controlling company.

(7)If the Bank under subsection (6) objects to the proposed appointment, the banking institution, microfinance banking institution or controlling company may not appoint the nominee and any purported appointment contrary to the objection has no legal effect.

(8)If the banking institution, microfinance banking institution or controlling company disputes the Bank’s objection, the Bank must give such banking institution, microfinance banking institution or controlling company a reasonable opportunity to make representations to the Bank.

(9)After considering the representations of the banking institution, microfinance banking institution or controlling company made under subsection (8), if any, the Bank may—

(a)accede to the nomination of the director, principal officer or executive director; or

(b)maintain its objection to the appointment,

and must in writing inform the banking institution, microfinance banking institution or controlling company of the decision of the Bank.

(10)The Bank may determine—

(a)the conduct and the qualifications applicable to, or to be complied with by; and

(b)the manner of, and the criteria and procedures relating to, the election or appointment of a person as,

a director, principal officer or executive officer of a banking institution, microfinance banking institution or controlling company.

(11)A banking institution, microfinance banking institution or controlling company that contravenes or fails to comply with subsection (1), (2), (4), (5) or (7) is liable to the penalties contemplated in section 94(1).

54. Functions, duties and obligations of directors, principal officers and other officers

(1)The board of directors of a banking institution, microfinance banking institution or controlling company—

(a)is responsible for the good corporate governance and business performance of the banking institution, microfinance banking institution or controlling company;

(b)must be independent and must act without improper or undue influence and without fear, favour, prejudice or direction from any person in the exercise and performance of its powers and functions in compliance with the laws of Namibia;

(c)must exercise oversight over the management of the banking institution, microfinance banking institution or controlling company;

(d)must ensure and report to the shareholders at the annual general meeting of the banking institution, microfinance banking institution or controlling company, that the internal controls and systems of the banking institution, microfinance banking institution or controlling company are—

(i)designed to provide reasonable assurance as to the integrity and reliability of the financial statements of the banking institution, microfinance banking institution or controlling company and to adequately safeguard, verify and maintain accountability of its assets;

(ii)based on established and written policies and procedures and are implemented by trained and skilled officers with an appropriate segregation of duties; and

(iii)continuously monitored, reviewed and updated by the board of directors to ensure that no material breakdown occurs in the functioning of such controls, procedures and systems;

(e)must immediately inform the Bank if they have reason to believe that the banking institution, microfinance banking institution or controlling company—

(i)may not be able to properly conduct its business as a going concern;

(ii)appears to be, or will in the near future be, unable to meet all, or any of, its obligations;

(iii)has suspended or is about to suspend any payment of any kind; or

(iv)does not, or may not be able to, meet its capital requirements determined by or under section 39; and

(f)must constitute from among its members an audit committee as contemplated in section 55.

(2)A director, principal officer, an executive officer or any other officer of a banking institution, microfinance banking institution or controlling company must, in relation to the banking institution, microfinance banking institution or controlling company of which he or she is a director, principal officer, an executive officer or any other officer, act honestly and in good faith in the best interest and for the benefit of the banking institution or microfinance banking institution and its depositors or of the controlling company, and must in the performance of his or her functions as a director, principal officer, executive officer or any other officer comply with this Act.

(3)The principal officer of a banking institution, microfinance banking institution or controlling company or any other officer of the banking institution, microfinance banking institution or controlling company acting on behalf of the principal officer or other officer must, despite any action taken by the board of directors, immediately inform the Bank if the principal officer or other officer has reason to believe that any of the events contemplated in subsection (1)(e) may, or is likely to, occur.

(4)A principal officer or manager of a branch of a banking institution or microfinance banking institution may not—

(a)engage in any commercial business activities other than—

(i)for or on behalf; and

(ii)in his or her capacity as an officer,

of the banking institution or microfinance banking institution; or

(b)be an agent of any other person engaged in any business contemplated in paragraph (a),unless—

(i)the position held by such person is that of a director of a company which is—

(aa)in liquidation, whether provisionally or final; or

(bb)being wound-up or is under judicial management; or

(ii)the Bank, on the recommendation of the board of directors of the banking institution or microfinance banking institution, has exempted the principal officer or the manager from the requirements of this subsection.

(5)The principal officer of a banking institution or microfinance banking institution which is a subsidiary of a foreign banking institution or microfinance banking institution must have direct access to or report directly to the—

(a)board of directors of the foreign banking institution, microfinance banking institution or controlling company of which it is a subsidiary; and

(b)principal officer of the banking institution, microfinance banking institution or controlling company referred to in paragraph (a),

on matters of strategic nature and importance.

(6)Any executive officer, by whatever name described, who is in the direct employment of a banking institution, microfinance banking institution or controlling company in Namibia and who exercises significant influence within such banking institution, microfinance banking institution or controlling company must administratively and functionally report to the principal officer of such a banking institution or microfinance banking institution or controlling company in Namibia.

(7)A decision pertaining to the affairs of a banking institution, microfinance banking institution or controlling company may only be taken by a person or officer who has been duly vetted and approved by Bank.

(8)A—

(a)director of a banking institution, microfinance banking institution or controlling company including a member of a committee of the board of directors established for the purpose of granting credit to customers; or

(b)principal officer or a manager of a division or a branch of a banking institution, microfinance banking institution or controlling company,

may not take part in the discussion or consideration of, or the taking of a decision relating to, any matter—

(i)in which—

(aa)he or she or any of his or her close relatives;

(bb)any company in which he or she or any of his or her close relatives is a substantial shareholder; or

(cc)any other organisation in which he or she or any of his or her close relatives is a partner or member,

has any personal or economic interest;

(ii)which is, subject to subsection (9), of particular economic interest to a local authority council as defined in section 1 of the Local Authorities Act, 1992 (Act No, 23 of 1992), regional council as defined in section 1 of the Regional Councils Act, 1992 (Act No, 22 of 1992), a corporate body, any other juristic person, any unincorporated organisation or association or any other public or private institution, towards which he or she has, in his or her capacity as a member of the council, board member, manager or representative, a duty to protect the economic interests of such council, body, person, organisation or association or institution.

(9)Subsection (8) does not apply in respect of the election of officers or the appointment of officers to positions of trust within the banking institution, microfinance banking institution or controlling company.

(10)Before a matter contemplated in subsection (8) is considered by the decision making body concerned, any person who is not entitled to take part in the consideration of, or the taking of a decision relating to, the matter must—

(a)inform the decision-making body accordingly; and

(b)recuse himself or herself from the meeting.

(11)The proceedings contemplated in subsection (10) must be recorded in the minutes of the meeting of the decision-making body concerned.

(12)A person who contravenes or fails to comply with subsection (1)(b), (d) or (e), (3), (4), (8) or (10) commits an offence and—

(a)is liable to the penalties provided for in section 92(2)(a); and

(b)in the case of a director, principal or other officer of a banking institution, microfinance banking institution or controlling company, is liable to the penalties provided for in section 93(1).

(13)If a director, principal or other officer of a banking institution, microfinance banking institution or controlling company contravenes or fails to comply with any provision of this section, the banking institution, microfinance banking institution or controlling company on whose behalf he or she acts is liable to the penalties contemplated in section 94(1).

55. Audit committee

(1)The audit committee established by the board of directors of a banking institution or microfinance banking institution in terms of section 54(1)(f) has, subject to this section or to a determination issued by the Bank, such powers, duties and functions as the board of directors may specify and inform the audit committee in writing.

(2)The audit committee referred to in subsection (1) consists of so many members, but not less than three, as the banking institution or microfinance banking institution may decide on, who must all be directors without any executive responsibility in the banking institution or microfinance banking institution.

(3)The board of directors of the banking institution or microfinance banking institution concerned must, from among the members of the audit committee concerned, designate a chairperson for the audit committee, which chairperson must, subject to subsection (5), have the powers, duties and functions as decided on by the banking institution or microfinance banking institution.

(4)The audit committee must meet not less than four times during any financial year of the banking institution or microfinance banking institution concerned, which meetings must be attended by—

(a)the members of the audit committee;

(b)the officer responsible for the internal audit function of the banking institution or microfinance banking institution;

(c)the auditor of the banking institution or microfinance banking institution appointed in terms of section 56;

(d)any other auditor of the banking institution or microfinance banking institution; and

(e)the officer responsible for the financial or treasury functions of the banking institution or microfinance banking institution.

(5)The powers, duties and functions of the audit committee are to—

(a)ascertain the nature, scope or extent of the audit of the banking institution or microfinance banking institution to be undertaken by the auditor appointed in terms of section 56;

(b)review the internal audit programme of the banking institution or microfinance banking institution to ensure—

(i)co-ordination between the internal audit programme and the audit undertaken by the auditor appointed in terms of section 56; and

(ii)that sufficiently trained and skilled officers of appropriate standing, to the satisfaction of the audit committee, in the banking institution or microfinance banking institution undertake and implement the internal audit programme of the banking institution or microfinance banking institution;

(c)review and update the internal controls and systems of the banking institution or microfinance banking institution;

(d)consider, discuss and make recommendations to the board of directors relating to—

(i)any issue or reservation raised by the auditor appointed in terms of section 56; or

(ii)any finding made during internal investigations arising from the internal audit programme of the banking institution or microfinance banking institution;

(e)review the financial statements of, and to make recommendations to, the banking institution or microfinance banking institution relating to the financial statements; and

(f)perform such other duties and functions as the board of directors of the banking institution or microfinance banking institution may specify.

(6)The company secretary of the banking institution or microfinance banking institution must be the secretary of the audit committee and must have such duties and perform such functions as the board of directors of the banking institution or microfinance banking institution may specify.

56. Appointment of auditor

(1)Despite Chapter 10 of the Companies Act, a banking institution, microfinance banking institution or controlling company must annually appoint an auditor for the banking institution, microfinance banking institution or controlling company.

(2)A banking institution, microfinance banking institution or controlling company must, 10 days prior to its annual meeting and in the form and manner required by the Bank, submit to the Bank details regarding the auditor it intends to appoint in terms of subsection (1), and apply to the Bank for the Bank’s approval of the appointment.

(3)On receipt of an application in terms of subsection (2) the Bank may—

(a)refuse to approve the appointment;

(b)approve the appointment; or

(c)approve the appointment subject to such conditions as the Bank may impose and specify,

and must in writing inform the banking institution, microfinance banking institution or controlling company of Bank’s decision, and where the application is refused or conditions are imposed, provide the applicant with the reasons for the refusal of the application or imposition of conditions.

(4)If the Bank under subsection (3)(c) approves the appointment subject to conditions, the Bank must in writing furnish the banking institution, microfinance banking institution or controlling company concerned with particulars of the conditions.

(5)A banking institution, microfinance banking institution or controlling company may not appoint a person as an auditor of a banking institution, microfinance banking institution or controlling company, unless the appointment has been approved by the Bank under subsection (3).

(6)A banking institution, microfinance banking institution or controlling company may not appoint a person as an auditor of a banking institution, microfinance banking institution or controlling company for a period exceeding such continuous consecutive periods as may be determined by the Bank.

(7)The Bank may determine criteria or procedures relating to the appointment of, the conduct by, the duties of, and the requirements or qualifications in respect of, an auditor.

(8)If—

(a)a banking institution, microfinance banking institution or controlling company fails to appoint an auditor in terms of subsection (1);

(b)the Bank under subsection (3) refuses to approve the appointment of an auditor appointed by a banking institution, microfinance banking institution or controlling company; or

(c)an auditor appointed by a banking institution, microfinance banking institution or controlling company in terms of subsection (1) is disqualified in terms of section 57 to act as an auditor,

the Bank may, for or on behalf of the banking institution, microfinance banking institution or controlling company, appoint an auditor.

(9)An auditor appointed by the Bank for or on behalf of a banking institution, microfinance banking institution or controlling company under subsection (8) is considered to be an auditor appointed by the banking institution, microfinance banking institution or controlling company in terms of subsection (1) and approved by the Bank under subsection (3).

(10)The Bank may at any time withdraw an approval granted under subsection (3) or an appointment made under subsection (8), if the auditor concerned—

(a)fails to comply with—

(i)the conditions, if any, imposed by the Bank under of subsection (3)(c); or

(ii)the criteria determined by the Bank as contemplated in subsection (7); or

(b)becomes disqualified in terms of section 57 to act as an auditor.

(11)A banking institution, microfinance banking institution or controlling company that contravenes or fails to comply with subsection (1), (2), (5) or (6) is liable to the penalties contemplated in section 94(1).

57. Disqualifications for appointment as auditor

A person does not qualify to be appointed or to act as an auditor of a banking institution, microfinance banking institution or controlling company, if—

(a)any of the grounds for disqualification stipulated by section 283 of the Companies Act apply to that person;

(b)the appointment of the auditor by the banking institution, microfinance banking institution or controlling company was not approved by the Bank or an approval granted by the Bank has been withdrawn under section 56(10);

(c)the auditor, either directly or indirectly, has a material interest in the banking institution, microfinance banking institution or controlling company or in its affiliate or associate;

(d)any other circumstances exist which, in the opinion of the Bank, may impair the independence or impartiality of the auditor; or

(e)the criteria or any of the criteria determined by the Bank as contemplated in section 56(7) are not complied with.

58. Duties and functions of auditor

(1)An auditor appointed by a banking institution, microfinance banking institution or controlling company in terms of section 56 must in writing inform the board of directors of the banking institution, microfinance banking institution or controlling company, and the Bank of—

(a)the banking institution or microfinance banking institution’s ability or inability to meet with the requirements of section 39, 40 or 43;

(b)any other matter which the auditor becomes aware of in the performance of his or her duties or functions as an auditor and which in his or her opinion may—

(i)prejudice the ability of the banking institution, microfinance banking institution or controlling company to continue conducting business as a going concern;

(ii)be detrimental to the interests of the customers of the banking institution, microfinance banking institution or the controlling company concerned or the general public; or

(iii)violate the principles of sound financial management or the maintenance of adequate internal controls and systems by the banking institution, microfinance banking institution or controlling company.

(2)The duties of an auditor appointed in terms of section 56 include the duties of an auditor—

(a)in terms of the Companies Act;

(b)in terms of this Act or any other applicable law; and

(c)determined by the Bank as contemplated in subsection (7) of that section.

(3)The auditor must assess and in writing comment on the report of the board of directors made in terms of section 54(1)(d) before the report is tabled at the annual general meeting.

(4)The banking institution, microfinance banking institution or controlling company must transmit a copy of the comments made by an auditor in terms of subsection (3), signed by the auditor and by the chairperson of the board of directors, to the Bank not more than 20 days after the receipt by the board of the auditor’s comments.

(5)If an auditor, acting in good faith and without being negligent or without wrongful intent, furnishes any information to any person in terms of subsection (1), (2) or (4) or makes any comments in terms of subsection (3), such actions by the auditor—

(a)do not constitute a contravention of any provision of any law or a breach of a code of professional conduct which the auditor may be subject to; or

(b)may not cause the auditor to incur any liability to any person as a consequence of the furnishing of the information or the making of the comments.

(6)Despite anything to the contrary in any other law, the Bank may require the auditor to provide access to the Bank or to any other person the Bank may specify to inspect—

(a)audit working papers, financial statements and other financial records or non-financial records; or

(b)any other information the Bank considers necessary and appropriate,

relating to the banking institution, microfinance banking institution or controlling company, if in the opinion of the Bank—

(i)any money transaction indicates or raises a suspicion that an officer of the banking institution, microfinance banking institution or controlling company or any person involved in a transaction may be engaged in an illegal activity; or

(ii)the records in the possession of the auditor will assist the Bank in achieving the objectives set out in this Act.

(7)If an auditor has furnished to the Bank any information, financial statements or other financial or non-financial records relating to the banking institution, microfinance banking institution or controlling company in terms of (6), such actions—

(a)do not constitute a contravention of any provision of any law or a breach of a code of professional conduct which the auditor may be subject to; or

(b)may not cause the auditor to incur any criminal or civil liability to any person as a consequence of the furnishing of the information.

(8)A—

(a)banking institution, microfinance banking institution or controlling company that contravenes or fails to comply with subsection (4) is liable to the penalties contemplated in section 94(1); or

(b)person who contravenes or fails to comply with subsection (1) or fails or refuses to provide access to the Bank or any other person as required under subsection (6) commits an offence and is liable to the penalties provided for in section 92(2)(a).

Part 7 – SUPERVISION BY BANK

59. Financial and other banking records

(1)A banking institution or microfinance banking institution must, in the official language of Namibia, keep core banking systems that—

(a)contain records and documentation covering core functional areas and such accounting and other records as are necessary to reflect the true and fair state of the affairs of the banking institution or microfinance banking institution; and

(b)explain the transactions and financial position of the banking institution or microfinance banking institution,

in such a manner that enables the Bank to ascertain whether the banking institution or microfinance banking institution is complying with this Act.

(2)The banking institution or microfinance banking institution must keep and maintain the core banking systems, accounting and other records referred to in subsection (1) in Namibia for a period of not less than five years after the date of the last entry in such records, and comply with the requirements—

(a)of section 292 of the Companies Act; and

(b)determined by the Bank.

(3)A person may not, with the intent to deceive or negligently, in any records of a banking institution, microfinance banking institution or controlling company—

(a)make a false entry, knowing such entry to be false or cause such an entry to be made;

(b)omit an entry or cause such an entry to be omitted; or

(c)alter, abstract, conceal, remove or destroy an entry or cause an entry to be altered, abstracted, concealed, removed or destroyed.

(4)For the purposes of this section, “records” or “other records”, include any book, record, report, statement or other document relating to the business, affairs, transactions, conditions, property, assets or liabilities of a banking institution, microfinance banking institution or controlling company.

(5)A—

(a)banking institution or microfinance banking institution that contravenes or fails to comply with subsection (1) or (2) is liable to the penalties contemplated in section 94(1); or

(b)person who contravenes or fails to comply with subsection (3) commits an offence and is liable to the penalties provided for in section 92(2)(a).

60. Financial statements

(1)The Companies Act, subject to the further provisions of this section, applies to the financial statements of a banking institution, microfinance banking institution or controlling company.

(2)Despite subsection (1)—

(a)the Bank may determine additional requirements not in conflict with this Act relating to the financial statements contemplated in subsection (1); and

(b)a banking institution, microfinance banking institution or controlling company must—

(i)in its annual financial statements disclose the name of a shareholder who holds 10 per cent or more of the total voting rights in the banking institution, microfinance banking institution or controlling company;

(ii)despite anything to the contrary in any other law, submit to the Bank within three months after the end of its financial year, but at least 30 days before its annual general meeting, its audited financial statements; and

(iii)subject to subsection (4), within a period of 30 days from the date of acceptance of the financial statements at an annual general meeting of the banking institution, microfinance banking institution or controlling company, publish the financial statements in a newspaper as approved, and in the form and manner specified, by the Bank.

(3)Despite anything to the contrary in the Companies Act or in any other law, a banking institution, microfinance banking institution or controlling company must, within six months after the end of its financial year, hold its annual general meeting.

(4)The Bank may, at the written request of a banking institution, microfinance banking institution or controlling company and subject to such conditions as the Bank may impose, in writing extend any period of time specified in subsection (2)(b)(ii) or (iii) or (3).

(5)If the Bank is satisfied that the financial statements of a banking institution, microfinance banking institution or controlling company—

(a)do not comply with this Act or with any additional requirement determined by the Bank in accordance with subsection (2)(a);

(b)contain information that may be misleading in any way; or

(c)are not published in the form specified by the Bank,

the Bank may by notice in writing require the banking institution, microfinance banking institution or controlling company to—

(i)amend or correct the financial statements to comply with this Act or with the additional requirements;

(ii)correct the misleading information;

(iii)re-publish the amended or corrected financial statements; or

(iv)submit to the Bank—

(aa)such further or additional documents or information; or

(bb)such explanation or amplification relating to any document or information,

to the satisfaction of the Bank or as the Bank may consider necessary.

(6)A banking institution, microfinance banking institution or controlling company that or any other person who contravenes or fails to comply with subsection (2)(b) or (3) or fails or refuses to comply with the requirements of a notice issued by the Bank under subsection (5) commits an offence and is liable to the penalties provided for in section 93(1).

61. Disclosure of paid-up share capital

(1)If a banking institution, microfinance banking institution or controlling company publishes a statement or issues a document in which the amount of its authorised share capital is disclosed, the amount of its paid-up share capital must also be disclosed in such statement or document.

(2)A banking institution, microfinance banking institution or controlling company that contravenes or fails to comply with subsection (1) is liable to the penalties contemplated in section 94(1).

62. Furnishing of certain statements, notices, returns and information

(1)A banking institution, microfinance banking institution or controlling company must, at such times and in such manner as the Bank may in writing require and notify the banking institution, microfinance banking institution or controlling company with the necessary changes in accordance with section 35(4), submit to the Bank a statement containing full particulars of all the assets and liabilities of the banking institution, microfinance banking institution or controlling company, including information relating to all the assets and liabilities of the banking institution, microfinance banking institution or controlling company outside Namibia.

(2)In addition to the particulars to be furnished to the Bank by a banking institution, microfinance banking institution or controlling company as specified and contemplated in subsection (1), the Bank may at any time by means of a notice delivered to the banking institution, microfinance banking institution or controlling company, direct the banking institution, microfinance banking institution, controlling company or its principal officer to furnish the Bank with such information relating to the banking business or microfinance banking business of the banking institution or microfinance banking institution or any of its transactions, and within such period of time, as the Bank may specify in the directive.

(3)If a banking institution, microfinance banking institution or controlling company—

(a)forwards to its shareholders a notice of a meeting or of the declaration of a dividend or a report on its activities during a financial year or part of a financial year;

(b)in terms of section 178(3) of the Companies Act, gives notice to the Registrar of Companies of any change in the situation of its registered office or postal address;

(c)in terms of section 224(2) of the Companies Act, lodges with the Registrar of Companies a return regarding its directors; or

(d)in terms of section 306(5) of the Companies Act, forwards to the Registrar of Companies a copy of its annual financial statements,

the banking institution, microfinance banking institution or controlling company must simultaneously with the forwarding or lodging of the notice, report, return or statements, furnish the Bank with a copy of the notice, report, return or statements, so forwarded or lodged.

(4)A banking institution, microfinance banking institution or controlling company must—

(a)within a period of 30 days after a general meeting of shareholders, forward to the Bank a copy of the minutes of the meeting kept in terms of section 212 of the Companies Act; or

(b)at the written request of the Bank, within the period of time and in the form stated in the request, furnish the Bank with particulars to enable the Bank to ascertain whether the banking institution, microfinance banking institution or controlling company is complying with section 39, 40 or 43.

(5)The Bank may require the auditors of a banking institution, microfinance banking institution or controlling company appointed in terms of section 56 to certify as correct and accurate any information submitted by the banking institution, microfinance banking institution or controlling company to the Bank in terms of this section.

(6)A banking institution, microfinance banking institution or controlling company that—

(a)contravenes or fails to comply with subsection (1), (3) or (4)(a);

(b)fails to furnish the Bank with information when required to do so in terms of subsection (2) or (4)(b), within the specified period of time; or

(c)knowingly and repeatedly furnishes the Bank with incorrect or incomplete information under this section,

is liable to the penalties contemplated in section 94(1).

63. Reporting of certain transactions by banking institutions and microfinance banking institutions

(1)For the purposes of subsection (2) an “illegal activity” includes “money laundering” or a “money laundering activity” as defined in section 1 of the Financial Intelligence Act, 2012 (Act No, 13 of 2012) and an “unlawful activity” as defined in section 1 of the Prevention of Organised Crime Act, 2004 (Act No. 29 of 2004).

(2)The Bank may direct a banking institution, microfinance banking institution or controlling company to report to the Bank or to any other person or authority the Bank may specify, any money transaction which it becomes aware of and which indicates or raises a suspicion that the person conducting, or any person involved in, the transaction may be engaged in an illegal activity.

(3)A banking institution, microfinance banking institution or controlling company that or any other person who fails or refuses to comply with a directive of the Bank issued under subsection (2) commits an offence and is liable to the penalties provided for in section 93(1).

64. Extension of time

If a banking institution, microfinance banking institution or controlling company has to furnish any information or document to the Bank in terms of this Act within a specified period of time, the Bank may, at the written request of the banking institution, microfinance banking institution or controlling company, in writing extend the period of time specified for the furnishing of the information or document.

65. Examination by Bank

(1)The Bank may, in order to determine whether—

(a)a banking institution, microfinance banking institution or controlling company is in a sound financial condition; or

(b)the provisions of this Act or any other legal requirements pertaining to the business being conducted have been, and are being, complied with by the banking institution, microfinance banking institution or controlling company,

without prior notice, at any reasonable time, through or by means of—

(i)an authorised officer;

(ii)any person appointed by the Bank on account of his or her special knowledge or expertise, including a legal practitioner registered to practise as such under the Legal Practitioners Act, 1995 (Act No. 15 of 1995); or

(iii)the auditor of the banking institution, microfinance banking institution, controlling company or any other auditor appointed by the Bank,

conduct an examination of the affairs of a banking institution, microfinance banking institution or controlling company.

(2)The provisions of section 7 apply with necessary changes to an examination under this section.

(3)In the conducting of an examination in terms of subsection (1), the Bank or the authorised officer, person appointed by the Bank under that subsection or auditor, in addition to the powers, duties and functions he or she or it has in terms of this Act, has the powers and duties in all respects corresponding to the powers and duties conferred or imposed on a registrar by section 4 of the Inspection of Financial Institutions Act, 1984 (Act No. 38 of 1984) to conduct an inspection of the affairs of a financial institution in terms of section 3 of that Act.

(4)The authorised officer, person or auditor referred to in subsection (1) must, on the completion of his or her examination in terms of that subsection, submit a report to the Bank relating to the examination so conducted, in the form and manner as the Bank may require.

(5)The Bank may, if an examination contemplated in subsection (1) reveals that the banking institution, microfinance banking institution or controlling company concerned is—

(a)not conducting its affairs in terms of this Act; or

(b)contravening any other law,

recover from the banking institution, microfinance banking institution or controlling company the costs incurred by the Bank relating to the examination, including the fees and expenses of the person appointed by the Bank under subsection (1).

(6)If one fifth or more of the total number of the depositors of a banking institution or microfinance banking institution representing not less than one fifth of the total value of the deposits made with the banking institution or microfinance banking institution, in writing request the Bank to conduct an examination in terms of subsection (1), the Bank, subject to subsection (7), must conduct an examination with necessary changes in terms of this section.

(7)The Bank may only conduct an examination contemplated in subsection (6) if the depositors referred to in that subsection, together with their request as contemplated in that subsection, provide the Bank with proof to the satisfaction of the Bank that such an examination is justified.

(8)After the completion of an examination under this section, the Bank must furnish the board of directors of the banking institution, microfinance banking institution or controlling company concerned with a report relating to the examination, which report must contain the findings of the Bank in respect of the conducting of business by the banking institution, microfinance banking institution or controlling company.

(9)In the report furnished to the board of directors of the banking institution, microfinance banking institution or controlling company in terms of subsection (8), the Bank must direct such board of directors to, within the period of time specified in the report, rectify the deficiencies mentioned in the report and every member of the board of directors or other officer of the banking institution, microfinance banking institution or controlling company must comply with such a directive of the Bank.

(10)The examination report prepared and furnished to the board of directors of a banking institution, microfinance banking institution or controlling company in terms of subsection (8)—

(a)remains the property of the Bank; and

(b)may not be disclosed to any person, except where such disclosure or exchange, in whole or in part—

(i)takes place between directors, officers or employees of that banking institution, microfinance banking institution or the controlling company; or

(ii)is necessary to facilitate the day to day efficient functioning of that banking institution or microfinance banking institution.

(11)For the purposes of this section and of section 66, a banking institution includes an affiliate or associate of the banking institution or microfinance banking institution.

(12)A person who fails or refuses to comply with a directive of the Bank issued under subsection (9) commits an offence and is liable to the penalties provided for in section 92(2)(a) and the banking institution, microfinance banking institution or controlling company on whose behalf the board of directors fails or refuses to act is in addition liable to the penalties contemplated in section 94(1).

66. Production of records and furnishing of information

(1)For the purpose of an examination by the Bank under section 65, the banking institution, microfinance banking institution or controlling company concerned must produce or furnish to the person conducting the examination—

(a)all cash or other liquid assets, books, minutes, vouchers, records, accounts, deeds, securities or other documents in the possession or custody of the banking institution or microfinance banking institution and relating to the business of the banking institution or microfinance banking institution; and

(b)all information concerning the business of the banking institution or microfinance banking institution as may be required or considered necessary or appropriate by such person,

at such time and place as may not unduly disrupt the conduct of the normal business of the banking institution or microfinance banking institution.

(2)A person authorised by the Bank in writing to conduct an examination under section 65, may for the purposes of such examination take possession of any document or other item referred to in subsection (1) and to which such person has access under this section.

(3)A banking institution, microfinance banking institution or controlling, its affiliate or associate that or any other person who, without reasonable or lawful excuse, refuses or fails to—

(a)allow access to, or possession of, accurate information or any document or other item;

(b)produce or neglects to produce accurate information or any document or other item;

(c)give information in accordance with subsection (2); or

(d)provide suitable facilities for the purposes of conducting an examination under subsection (2),

to any person referred to in subsection (2) commits an offence and is liable to the penalties provided for in section 93(1).

67. Approval of special resolutions, amalgamations and transfer of assets and liabilities

(1)A banking institution, microfinance banking institution or controlling company may not, without the prior written approval of the Bank—

(a)enter into a merger or consolidation;

(b)transfer, or otherwise dispose of, the whole or part of its property or assets, whether situated in or outside Namibia, other than in the ordinary course of business;

(c)transfer, sell or dispose of, any of its shares among the shareholders or through an intermediary resulting in the person to whom the shares are transferred becoming a substantial shareholder of the banking institution, microfinance banking institution or controlling company;

(d)effect a reduction of its paid-up share capital;

(e)change the name of the banking institution, microfinance banking institution or controlling company; or

(f)take any other action which requires a board resolution by directors or special resolution of the shareholders of the banking institution, microfinance banking institution or controlling company.

(2)A banking institution, microfinance banking institution or controlling company which requires the approval of the Bank in terms of subsection (1) must—

(a)in writing apply to the Bank for the granting of the required approval; and

(b)to the satisfaction of the Bank, and in accordance with criteria determined by the Bank in the application referred to in paragraph (a), furnish the Bank with full particulars relating to the proposed transaction or action.

(3)After considering an application made in terms of subsection (2) and in so far as it may be relevant, after consultation with the Namibian Competition Commission established by section 4 of the Competition Act, 2003 (Act No. 2 of 2003), the Bank may—

(a)refuse the application;

(

Banking Institutions Act, 2023

Act 13 of 2023

Related documents

Banking Institutions Act, 2023

Act 13 of 2023

Part 1 – PRELIMINARY PROVISIONS

1. Definitions and interpretation

2. Limitation of rights and non-application of Act

Part 2 – ADMINISTRATION OF ACT

3. Guidelines, circulars or notices by Bank

4. Limitation of liability

5. Delegation of powers and assignment of functions

Part 3 – AUTHORISATION TO ESTABLISH BANKING INSTITUTION OR MICROFINANCE BANKING INSTITUTION

6. Prohibition on conducting of banking business or microfinance banking business by unauthorised persons

7. Investigations

8. Repayment of monies by unauthorised persons

9. Name of banking institution or microfinance banking institution

10. Prerequisite for conducting banking or microfinance banking business

11. Application for authorisation to conduct banking or microfinance banking business

12. Grant or refusal of application and provisional authorisation

13. Authorisation to conduct banking business or microfinance banking business and certificate of authorisation

14. Duration and conditions of authorisation

15. Cancellation of authorisation

16. Repayment of deposits upon cancellation of authorisation

17. Application for registration as controlling company

18. Grant or refusal of application for registration as controlling company

19. Cancellation of registration as controlling company

20. Investments by controlling company

21. Restructuring within group of companies

22. Annual fees

23. Subsidiaries, branch offices, representative offices and other interests of banking institutions, microfinance banking institutions or controlling companies

24. Publication of information relating to banking institutions and microfinance banking institutions

25. Representative offices of foreign banking institutions

26. Branches of foreign banking institutions

27. Application of other provisions of Act to branches of foreign banking institutions

Part 4 – SHAREHOLDING IN BANKING INSTITUTIONS, MICROFINANCE BANKING INSTITUTIONS AND CONTROLLING COMPANIES

28. Restriction on shareholding in banking institutions, microfinance banking institutions and controlling companies

29. Shareholder’s register and registration of shares

30. Furnishing of information by shareholders

31. Absence of wrongful intent

32. Effects of registration of shares contrary to Act

33. Restriction on right to control banking institution or microfinance banking institution

34. Restriction on foreign shareholding in banking institutions and microfinance banking institutions

35. Preliminary orders prohibiting certain things

36. Effect of compliance with and enforcement of preliminary order

Part 5 – RECOVERY PLANS AND PRUDENTIAL REQUIREMENTS AND LIMITATIONS

37. Recovery plans

38. Standards of corporate behaviour

39. Minimum capital funds

40. Minimum capital funds in respect of banking group

41. Composition of capital funds

42. Provision to be made for certain matters

43. Minimum liquid assets

44. Restrictions on dividends

45. Minimum local assets

46. Large exposures and concentrations of credit

47. Lending against own shares or debt instruments

48. Exposure to directors, executive officers or shareholders

49. Terms of exposure to directors, executive officers and shareholders

50. Exposure to holding companies, subsidiaries and affiliates

51. Restriction on commercial activities

52. Limitations on investment in property

Part 6 – DIRECTORS, PRINCIPAL OFFICERS AND AUDITORS

53. Directors, principal officers and executive officers of banking institutions and microfinance banking institutions

54. Functions, duties and obligations of directors, principal officers and other officers

55. Audit committee

56. Appointment of auditor

57. Disqualifications for appointment as auditor

58. Duties and functions of auditor

Part 7 – SUPERVISION BY BANK

59. Financial and other banking records

60. Financial statements

61. Disclosure of paid-up share capital

62. Furnishing of certain statements, notices, returns and information

63. Reporting of certain transactions by banking institutions and microfinance banking institutions

64. Extension of time

65. Examination by Bank

66. Production of records and furnishing of information

67. Approval of special resolutions, amalgamations and transfer of assets and liabilities