Section 6: Powers of Bank

6. Powers of Bank (1) Subject to this Act, the Bank may— (a) open accounts for, accept deposits from, and pay interest on such deposits to— (i) the Government, and institutions and funds controlled by the Government; (ii) financial institutions; (iii) such statutory or corporate bodies as the Board may approve; (iv) the receiver, the receiver and manager or the liquidator of any financial institution in liquidation; [Issue 9] B2 – 6 Revised Laws of Mauritius (aa) set up a development fund for the benefit of small and medium enterprises and require a bank that fails to meet agreed lending targets to small and medium enterprises to contribute to the development fund by depositing, with the Bank at no interest, the difference between its actual lending and the agreed target; (ab) where any amount is deposited in accordance with paragraph (aa), direct that it shall be on-lent to a commercial bank that meets its target on such terms and conditions as may be prescribed by regulations made by the Minister, after consultation with the Governor; (ac) notwithstanding paragraphs (aa) and (ab), authorise a bank that fails to meet the agreed lending targets to small and medium enterprises to on-lend the amount referred to in paragraph (ab) to another bank which meets the agreed lending targets, on such terms and conditions as may be agreed between the banks; (b) maintain accounts with foreign central banks and other foreign financial institutions outside Mauritius and act as correspondent, banker or agent for any other central bank, financial institution or other monetary authority and for any international bank or international monetary authority of which Mauritius is a member or associate; (ba) develop the foreign exchange and derivatives markets; (c) hold and manage the official foreign exchange reserves of Mauritius; (d) formulate and implement appropriate intervention policies in the foreign exchange market; (da) with the approval of the Board, promote the development of the foreign exchange and derivatives markets; (e) promote the development of the money market of Mauritius, including the Islamic money market through the issue of such Shariah-compliant instruments as the Bank may determine; (ea) for the development of the primary and secondary markets for Government securities, purchase and sell Government securities; (f) purchase and sell gold coins, gold bullion, gold or shares or units in gold funds; (fa) issue a gold certificate in such form and subject to such conditions as the Bank may determine to represent a certificate of ownership of any gold bar held in custody by the Bank in favour of the person who has purchased it; (fb) appoint, on such terms and conditions as it may determine, dealers registered under the Jewellery Act, to offer for sale to the public minted gold bars issued by the Bank; (g) issue bills and demand drafts, and effect remittances of funds; B2 – 7 [Issue 9] Bank of Mauritius Act (h) purchase and sell freely convertible currencies and purchase, sell, discount and rediscount bills of exchange and Treasury Bills drawn in, or outside Mauritius and maturing within 184 days, exclusive of days of grace, from the date of acquisition; (i) purchase, sell, discount and rediscount bills of exchange and promissory notes arising out of bona fide commercial transactions and bearing 2 or more acceptable signatures, one of which shall be that of a bank which is a customer of the Bank, maturing within 90 days, or, in the case of bi encies and purchase, sell, discount and rediscount bills of exchange and Treasury Bills drawn in, or outside Mauritius and maturing within 184 days, exclusive of days of grace, from the date of acquisition; (i) purchase, sell, discount and rediscount bills of exchange and promissory notes arising out of bona fide commercial transactions and bearing 2 or more acceptable signatures, one of which shall be that of a bank which is a customer of the Bank, maturing within 90 days, or, in the case of bills relating exclusively to exports, maturing within 12 months, exclusive of days of grace, from the date of acquisition by the Bank; (j) purchase and sell, outright or by way of repurchase agreement, securities of the Government maturing in not more than 20 years, which have been publicly offered for sale or form part of an issue which is being made to the public at the time of acquisition on condition that at any particular date the total value in the books of the Bank of such securities in the ownership of the Bank, other than securities held in terms of paragraphs (ea) and (k), or held by the Bank as collateral under this Act, shall not together at any time exceed 20 per cent of the average of the last 2 published figures of the Government’s recurrent revenue; (k) invest in securities of Government, for any amount, to mature at any time, on behalf of staff funds and superannuation funds and other internal funds of the Bank; (l) purchase and sell securities payable in freely convertible currencies where such securities are issued or guaranteed by the Government of a foreign country or by an international organisation or other institution of which Mauritius is a member; (m) issue and hold Bank of Mauritius Securities, and purchase and sell outright or by way of repurchase agreement Bank of Mauritius Securities; (n) grant advances for fixed periods not exceeding 6 months to customers against— (i) gold coin or gold bullion; (ii) securities of Government which are publicly issued and are to mature within a period of 20 years; (iii) bills of exchange and promissory notes which are eligible for purchase, discount or rediscount by the Bank on condition that no advance so secured shall exceed 75 per cent of the nominal value of the instruments pledged; (iv) warehouse warrants or their equivalent securing possession of goods, in respect of staple commodities or other goods duly insured and with a letter of hypothecation from the owner on condition that no such advance shall exceed [Issue 9] B2 – 8 Revised Laws of Mauritius 60 per cent of the current market value of the commodities or goods in question; (v) Bank of Mauritius Securities; (vi) such other security as the Bank may determine; (o) in exceptional circumstances, grant advances to financial institutions and such other entities on such terms and conditions and against such securities as the Government or the Bank may issue; (p) grant such advances as the Board may approve to the receiver, receiver and manager or liquidator of a bank in receivership, or in liquidation, as the case may be; (q) undertake, on behalf of customers and correspondents, the purchase, sale, collection and payment of securities, currencies and credit instruments in Mauritius and abroad, and the purchase and sale of gold and silver; (r) enter into agreements with international financial organisations to raise funds for the purpose of financing projects or for such other purpose as the Board may approve; (s) undertake such in ger or liquidator of a bank in receivership, or in liquidation, as the case may be; (q) undertake, on behalf of customers and correspondents, the purchase, sale, collection and payment of securities, currencies and credit instruments in Mauritius and abroad, and the purchase and sale of gold and silver; (r) enter into agreements with international financial organisations to raise funds for the purpose of financing projects or for such other purpose as the Board may approve; (s) undertake such investment in Mauritius of funds of customers on deposit with the Bank as customers may specifically direct; (t) notwithstanding any other enactment, appropriate assets of banks or other financial institutions pledged in favour of the Bank, in satisfaction of sums of money owed to the Bank and secured by the pledge; (u) open and maintain accounts for the Governor, Deputy Governors and members of the staff of the Bank; (v) appoint banks and other financial institutions to act as its agents in Mauritius, and banks and other financial institutions abroad to act as its agents or correspondents abroad; (w) regulate the fees or charges in respect of the services provided by financial institutions and impose such limitation on the quantum of those fees and charges as it may determine; (x) appoint, on such terms and conditions as it may determine, fit and proper persons to act as Primary Dealers; (y) with the approval of the Minister, subscribe to, hold and sell shares of any corporation or company set up for the purpose of facilitating economic development; (z) under any other banking law, carry out such other functions as are not inconsistent with this Act; (za) subject to of this Act, generally conduct business as a bank and do all such things as are incidental to or consequential on the exercise of its powers or the discharge of its functions under this Act. B2 – 8 (1) [Issue 9] Bank of Mauritius Act (2) (a) The Bank may raise, for monetary policy purposes, loans by the issue of Bank of Mauritius Securities. (b) Bank of Mauritius Securities shall— (i) be issued by the Bank in such form and subject to such conditions as the Bank may determine; (ii) be in such multiples and currencies as the Bank may determine; (iii) be payable at par at the Bank; and (iv) specify the date of its maturity. (c) Bank of Mauritius Securities may be redeemed, before the date of its maturity, on such terms and conditions as may be agreed. (d) The proceeds of the issue of Bank of Mauritius Securities shall be paid to the Bank. (e) Bank of Mauritius Securities shall, on redemption, be cancelled by the Bank. (3) Notwithstanding subsection (1), any shares of any corporation or company held by the Bank under the repealed Bank of Mauritius Act, before 10 November 2004, shall continue to be held by the Bank under this Act. (4) Notwithstanding this Act, the Bank may— (a) enter into such agreement; (b) purchase or otherwise acquire such immovable property or any right therein; (c) lease such movable or immovable property; and (d) generally engage in such activities, as may be reasonably necessary, for the purpose of establishing an Islamic money market in Mauritius. (5) The Bank may apply to the Judge in Chambers for an order in respect of any matter relating to any of its functions under section 5. (6) Without prejudice to subsection (5), an order under that subsection may direct the person to do a specified act or refrain from doing a specified act, for the purposes of— (a) preventi vable or immovable property; and (d) generally engage in such activities, as may be reasonably necessary, for the purpose of establishing an Islamic money market in Mauritius. (5) The Bank may apply to the Judge in Chambers for an order in respect of any matter relating to any of its functions under section 5. (6) Without prejudice to subsection (5), an order under that subsection may direct the person to do a specified act or refrain from doing a specified act, for the purposes of— (a) preventing a contravention of the banking laws; (b) compelling any person to comply with a lawful request, direction or instruction made, issued or given by the Bank under the banking laws; (c) remedying the effects of a contravention; (d) ensuring that the person does not commit further contraventions of the banking laws; (e) preserving the assets of a financial institution; or [Issue 9] B2 – 8 (2) Revised Laws of Mauritius (f) compensating any person who has suffered loss because of a contravention. (7) The Bank shall not be required, as a condition of the making of an interim order under this section, to give an undertaking as to damages. (8) The power of the Judge in Chambers under this section may be exercised whether or not the person has previously engaged, is engaging or intends to engage in doing or refraining from doing any specified act relating to the purposes referred to in subsection (6). (9) Without prejudice to this section, the Bank shall have the right to— (a) institute and conduct proceedings in any Court against any financial institution for the proper application of the banking laws; (b) ask for and obtain declaratory orders from the Supreme Court; (c) seek guidance and directions from the Supreme Court on any point of law or as to the interpretation of any provision of the banking laws; (d) intervene in any proceedings in which a financial institution is a party. (10) Where, on an application by the Bank, the Judge in Chambers is satisfied that the Bank has reasonable ground to suspect that a person has committed, is committing or is likely to commit an offence under the banking laws, the Judge in Chambers may order— (a) the prohibition by the suspect or any other person acting on his behalf, or any person holding assets on his behalf, from disposing, transferring or pledging any of his assets or making any withdrawal from any account or deposit at a financial institution; (b) the attachment in the hands of any other person named in the order of all moneys and other property due or owing, or belonging to, or held on behalf of the suspect; (c) the suspect to make a full disclosure, within such time as may be specified in the order, of all his possessions and the nature and source of such possessions; (d) any other person named in the order to make a full disclosure of all moneys and property held on behalf of the suspect; or (e) the opening, in the presence of a person authorised by the Bank, of any safe deposit box held in any bank on behalf of the suspect. (11) Where an order is made under subsection (10) (a) or (b), the Bank may— (a) give public notice of the order, unless the Bank reasonably believes that such notice is likely to obstruct the conduct of any investigation under this Act; and B2 – 8 (3) [Issue 9] Bank of Mauritius Act (b) give notice of the order to all notaries and to the head offices of all banks and branches, investment dealers, cash dealers and financial institutions and any other person who may hold or be vest of the suspect. (11) Where an order is made under subsection (10) (a) or (b), the Bank may— (a) give public notice of the order, unless the Bank reasonably believes that such notice is likely to obstruct the conduct of any investigation under this Act; and B2 – 8 (3) [Issue 9] Bank of Mauritius Act (b) give notice of the order to all notaries and to the head offices of all banks and branches, investment dealers, cash dealers and financial institutions and any other person who may hold or be vested with property belonging to or held on behalf of the suspect. (12) An order under subsection (10) shall be served on the suspect and on every person named in the order. (13) Where a notice is published under subsection (11), any person who allows, procures or facilitates the disposal of money or property belonging to the suspect shall commit an offence. (14) (a) The Judge in Chambers may, on application and on good and sufficient cause shown, authorise such reasonable amounts to be withdrawn from a bank or other financial institution for the subsistence of the suspect on such conditions as the Judge may determine. (b) The Bank shall be a party to any application under paragraph (a). (15) An order under subsection (10) (a) or (b) shall remain in force— (a) where an investigation is being carried out by the Bank or Commissioner of Police, until the completion of the investigation, or until such time as the Bank or the Commissioner of Police decides not to proceed with the investigation or recommends that the order be lifted; or (b) where the suspect is charged with an offence, until the final determination of that charge by a Court or until such time as the Director of Public Prosecutions decides not to proceed with the charge. (16) In this section— “suspect” means a person whom the Bank has reasonable ground to suspect has committed, is committing or is likely to commit an offence under the banking laws. [S. 6 amended by s. 22 (2) (b) of Act 4 of 2008 w.e.f. 1 July 2008; s. 2 (b) of Act 10 of 2010 w.e.f. 24 December 2010; s. 3 (a) of Act 38 of 2011 w.e.f. 15 December 2011; s. 2 (a) of Act 27 of 2012 w.e.f. 22 December 2012; s. 2 (c) of Act 27 of 2013 w.e.f. 21 December 2013; s. 17 (1) (b) of Act 1 of 2015 w.e.f. 1 January 2015; s. 3 (a) of Act 9 of 2015 w.e.f. 14 May 2015; s. 2 (b) of Act 18 of 2016 w.e.f. 7 September 2016.]