Banking Regulations
The current banking
regulatory framework has many robust elements, including reliance on solvency
monitoring, international accounting standards, and actuarial methods. The legal
framework for banking business is embodied in the Banking Act 1988. Under the
Financial Services Development Act 2001, important amendments were made to
section 46 of the Banking Act 1988 whereby Domestic Banks are now defined as
Category 1 Banks having a Category 1 banking licence and offshore banks are now
defined as Category 2 banks with a Category 2 banking licence. The banking
legislation provides for prudential regulations with respect to banks'
concentration of risk, weighted capital adequacy ratio, income recognition and
clarification of loans and advances for provisioning purposes, maintenance of
accounting and other records and internal control systems.
Although the island
has only had a significant financial services sector for about two
decades this has, in some ways, worked to its advantage. The Mauritian
Authorities have been extremely prudent in adopting best international
practice in the laws and regulations and learning from how other
jurisdictions have developed, and the result is a financial industry
that has matured quickly and is striving to embrace the highest
international standards.
Pursuing
its agenda to combat money laundering and terrorist financing and to
promote a clean and reputable financial centre, the Government of
Mauritius introduced a series of legislation in early 2002, namely
the Prevention of Corruption Act, The prevention of Terrorism Act
and the Financial Intelligence and Anti-Money Laundering Act under
which the Financial Intelligence Unit was set up.
The Financial
Intelligence Unit (FIU) was established under section 9 of the
Financial Intelligence and Anti Money Laundering Act in August 2002.
It is the Central Mauritian agency for the request, receipt,
analysis and dissemination of financial information regarding
suspected proceeds of crime and alleged money laundering offences as
well as the financing of any activities or transactions related to
terrorism to relevant authorities.
The Bank
of Mauritius was established in September 1967 as the central bank
of the country and is governed by the Bank of Mauritius Act 2004,
which has replaced the Bank of Mauritius Act 1966 (as
amended).