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    BOM Publishes Guidelines for Private Banking and Digital Banks

    December 06, 2021

    The Bank of Mauritius (BoM) has been removed from the list of high-risk countries under the UK Money Laundering and Terrorist Financing (Amendment) (No. 3) (high-risk countries) Regulations 2021. BoM also issued the revised guideline on private banking and a new guideline for digital banks. The guideline on private banking sets out the regulatory and supervisory framework applicable to banks conducting private banking business while the guideline on digital banks sets out the regulatory and supervisory framework for operating a digital bank in Mauritius. Both the guidelines come into effect from December 06, 2021.

    The guideline for digital banks specifies additional requirements to, or exemptions from the legal, regulatory, and supervisory framework applicable to traditional banks and the terms and conditions under which BoM shall consider these exemptions under section 7(7E) of the Banking Act 2004. Digital banking business is defined in the Banking Act 2004 as "banking business carried on exclusively through digital means or electronically." The guideline shall apply to banks licensed under section 7(5) of the Banking Act 2004 to carry on exclusively digital banking business (digital bank) and private banking business or Islamic banking business solely through digital means or through electronic delivery channels under section 52(1) of the Banking Act 2004 (digital private bank or digital Islamic bank). The guideline stipulates that a restricted digital bank shall comply with banking laws, the Guideline on Fit and Proper Person Criteria, the Guideline on Related Party Transactions, the Guideline on Corporate Governance, the Guideline on Credit Concentration Risk, Guideline on Credit Risk Management, Guidelines on Outsourcing by Financial Institutions, Guideline on Liquidity Risk Management, Guideline on Maintenance of Accounting and Other Records and Internal Control Systems, the Guideline on the Computation of Debt-to-Income Ratio for Residential Property Loans, Guidelines for Calculation and Reporting of Foreign Exchange Exposures of Banks, the minimum capital requirements prescribed in this Guideline, and the prudential limits set out under this section. The  guideline also sets out the requirements pertaining to Anti-Money Laundering and Combating the Financing of Terrorism and Proliferation (AML/CFT).

    Furthermore, the guideline for digital banks stipulates that a digital bank shall comply with all the statutory reporting requirements and submit the regulatory returns and any other reporting requirements as communicated by BoM. During the restricted phase, a restricted digital bank shall also submit, to BoM, half-yearly progress updates on the implementation of its business plan. A digital bank shall also ensure compliance with the relevant data protection laws and regulations. However, a restricted digital bank shall, upon request, be exempted from the requirement to submit regulatory returns that may not be applicable to its business model.

     

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    Effective Date: December 06, 2021

    Keywords: Middle East and Africa, Mauritius, Banking, Private Banking, Digital Banking, Regulatory Capital, Reporting, Basel, AML/CFT, BOM

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