Banking and Financial Services (Amendment) Act, 2020

The Register must be open for public inspection during the Bank’s normal operating hours, and the Bank may keep the Register electronically or in another form it decides.

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Jurisdiction: Zambia
Instrument: Act or statute
Citation: Act 7 of 2020
Version: 26 Oct 2020
Language: en
Official source: View official record ↗

amendment anti-money laundering appeals bank possession bank regulatory powers business closure capital adequacy compensation counter financing of terrorism debt priority deposit protection employee wages financial service provider financial service providers financial services legislative amendment lending limits liquidation petition process public inspection record keeping regulatory supervision repeal resolution +9 more

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Statute overview

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The Register must be open for public inspection during the Bank’s normal operating hours, and the Bank may keep the Register electronically or in another form it decides. The principal Act’s heading after section 51 is repealed and replaced with a heading for section 62A on the regulatory and supervisory power of the Bank. This provision amends the principal Act by inserting a new section after section 62 on anti-money laundering and countering the financing of terrorism supervision. The Bank may exercise authority over a financial service provider when it considers supervision necessary for anti-money-laundering, counter-terrorism financing, proliferation, or other serious offences. This section repeals section 72 of the principal Act.

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Provisions of Banking and Financial Services (Amendment) Act, 2020

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4
Section 21 of the principal Act is amended by the deletion
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AI-assisted research summary: The Register must be open for public inspection during the Bank’s normal operating hours, and the Bank may keep the Register electronically or in another form it decides.

4. Section 21 of the principal Act is amended by the deletion of subsection (2) and the substitution therefor of the following: (2) The Register shall be open for public inspection during normal operating hours of the Bank. (3) The Bank may maintain a Register in an electronic form or any other form determined by the Bank. Repeal and replacement of heading
5
The principal Act is amended by the repeal of the heading
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AI-assisted research summary: The principal Act’s heading after section 51 is repealed and replaced with a heading for section 62A on the regulatory and supervisory power of the Bank.

5. The principal Act is amended by the repeal of the heading immediately after section 51 and the substitution therefor of the following: Insertion of section 62A REGULATORY AND SUPERVISORY POWER OF BANK
6
(1) A company shall not conduct a banking business
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AI-assisted research summary: This provision amends the principal Act by inserting a new section after section 62 on anti-money laundering and countering the financing of terrorism supervision.

6. The principal Act is amended by the insertion of the following new section immediately after section 62: Anti-money laundering and counter financing of terrorism supervision
62A
The Bank may exercise its authority over a financial
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AI-assisted research summary: The Bank may exercise authority over a financial service provider when it considers supervision necessary for anti-money-laundering, counter-terrorism financing, proliferation, or other serious offences.

62A. The Bank may exercise its authority over a financial service provider where the Bank considers that it is necessary to implement supervision for the purposes of the prevention and combating of money laundering and financing of terrorism or proliferation or any other serious offence. Repeal section 72 of Repeal and replacement of section 73
7
The principal Act is amended by the repeal of section 72
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AI-assisted research summary: This section repeals section 72 of the principal Act.

7. The principal Act is amended by the repeal of section 72.
8
The principal Act is amended by the repeal of section 73
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AI-assisted research summary: This section repeals section 73 and replaces it with a new heading, “Possession of financial service provider by Bank.”

8. The principal Act is amended by the repeal of section 73 and the substitution therefor of the following: Possession of financial service provider by Bank
73
Section 73
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AI-assisted research summary: When the Bank takes possession of a financial service provider, it must take specified resolution steps and prepare a statement of affairs.

73. (1) The Bank shall, where the Bank takes possession of a financial service provider— (a) restructure or re-organise the financial service provider; (b) sell the financial service provider as a going concern; Banking and Financial Services (Amendment) [No. 7 of 2020 117 (c) close the financial service provider; (d) transfer all or part of the business of the financial service provider to a bridge bank; (e) initiate a purchase and assumption transaction; (f) dispose of some of the assets of the financial service provider; or (g) take an action that the Bank considers necessary to enable the Bank carry out its functions in accordance with this Act. (2) Where the Bank decides to close a financial service provider under subsection (1) (c), the closure may take effect— (a) by an order of the Bank placing the financial service provider under liquidation; or (b) in the case of a financial business, by cancelling the financial business licence and recommending to an appropriate authority the placing of the financial business into liquidation. (3) Despite subsection (1), the Bank shall, on taking possession of a financial service provider, prepare a statement of affairs showing the financial position of the financial service provider.
9
The principal Act is amended by the repeal of section 74
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AI-assisted research summary: This section repeals section 74 of the principal Act.

9. The principal Act is amended by the repeal of section 74.
10
The principal Act is amended by the repeal of section 75
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AI-assisted research summary: Section 10 amends the principal Act by repealing section 75 and replacing it with new text.

10. The principal Act is amended by the repeal of section 75 and the substitution therefor of the following:
75
Section 75
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AI-assisted research summary: A financial service provider, or someone acting for it, may petition the Minister within 21 days after the Bank takes possession of the provider.

75. (1) A financial service provider or an interested person acting on the financial service provider’s behalf may, within twenty-one days after the date on which the Bank takes possession of the financial service provider, petition the Minister to establish a tribunal to enquire into the the decision of the Bank to take possession of the financial service provider. Repeal section 74 of Repeal and replacement of section 75 Petition to Minister against possession
11
Section 82 of the principal Act is amended by the deletion
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AI-assisted research summary: Section 82(2) is replaced with a rule limiting the total value of a grant, credit facility, and guarantee to 25% of regulatory capital, except as may be prescribed under subsection (1).

11. Section 82 of the principal Act is amended by the deletion of subsection (2) and the substitution therefor of the following: Amendment of section 82 (2) Except as may be prescribed under subsection (1), the total value of a grant, credit facility and guarantee specified in subsection (1) shall not exceed twenty-five percent of the regulatory capital. 118 No. 7 of 2020] Banking and Financial Services (Amendment) Amendment of section 132 Act No. 9 of 2017
12
Section 132 of the principal Act is amended by the deletion
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AI-assisted research summary: In a compulsory winding-up or dissolution of a financial service provider, certain debts must be paid first, in the listed order.

12. Section 132 of the principal Act is amended by the deletion of subsection (1) and the substitution therefor of the following: (1) Despite the Corporate Insolvency Act, or any other written law, in any compulsory winding-up or dissolution of a financial service provider, the following shall be paid in priority to all other debts in the order set: (a) expenses incurred in the process of compulsory winding-up or dissolution; (b) depositors whose deposit claims— (i) are covered by a deposit protection scheme; and (ii) not covered by a deposit protection scheme; (c) taxes and rates dues; (d) wages and salaries of employees of the financial service provider, excluding executive employees, senior management and other categories of staff that the Bank may determine, for a period of three months; (e) charges and assessments due to the Bank; or (f) other claims against the financial service provider in an order of priority that the Court may determine on application by the Bank. Amendment of section 137 Amendment of section 140
13
Section 137(3) of the principal Act is amended by the
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AI-assisted research summary: Section 137(3) of the principal Act is amended by deleting specified words.

13. Section 137(3) of the principal Act is amended by the deletion of the words “or set aside by a tribunal on appeal or by the Court”.
14
Section 140 of the principal Act is amendment by the
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AI-assisted research summary: A tribunal must hear and decide an appeal on its merits within 30 days of being convened, considering this Act and any other relevant written law.

14. Section 140 of the principal Act is amendment by the deletion of subsection (1) and the substitution therefor of the following: Repeal and replacement of section 141 Decision of Tribunal (1) A tribunal shall hear and determine an appeal on its merits, within thirty days of being convened, taking into account this Act and any other relevant written law.
15
The principal Act is amended by the repeal of section 141
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AI-assisted research summary: The principal Act is amended by repealing section 141 and replacing it with new text.

15. The principal Act is amended by the repeal of section 141 and the substitution therefor of the following:
141
Section 141
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AI-assisted research summary: A tribunal may order the Bank to pay compensation if it finds the Bank acted contrary to this Act or another written law on the matter before it.

141. (1) A tribunal may order compensation against the Bank where the tribunal finds the Bank to have acted contrary to this Act or any other written law on the matter before the tribunal. (2) An appeal against a decision of a tribunal, on a point of law, shall lie to the Court of Appeal. Banking and Financial Services (Amendment) [No. 7 of 2020 119
16
Section 160 (1) of the principal Act is amended by the
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AI-assisted research summary: This provision replaces section 160(1)(b) with a new rule about funds paid toward buying certain shares or interests and related interest or dividends.

16. Section 160 (1) of the principal Act is amended by the deletion of paragraph (b) and the substitution therefor of the following: Amendment of section 160 Act No. 41 of 2016 (b) funds paid toward the purchase of a share or other interest in a security, issued by a financial service provider not listed or quoted on an exchange regulated under the Securities Act and any interest or dividend relating thereto, excluding any charge that may lawfully be withheld, in respect of which the owner has not, within the last ten years— (i) increased or decreased the amount of the funds or deposit; (ii) corresponded, in writing, with the bank or financial institution; or (iii) otherwise indicated an interest in the funds as evidenced by a memorandum in the records of the financial service provider; and. 120

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Banking and Financial Services (Amendment) Act, 2020

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