Banks Act 1969

PART I
PRELIMINARY

1 Interpretation; general

2 Interpretation; share ben eficially owned by a Bermudian; company Bermudian controlled; subsidiary of a bank

PART II
REQUIREMENTS FOR BANKS

3 Requirements for carrying on banking business

4 Exempted companies (as defined Companies Act 1981) carrying on banking business

5 What incorporating Act of bank must contain

PART III
7BERMUDIAN SHAREHOLDING IN BANKS AND ANCILLARY MATTERS

6 Percentage of Bermudian directors; percentage of shares held by Bermudi ans

7 What byelaws of bank must contain

8 Return of shareholders

9 Allotment and transfer of shares

10 Directors may make en quiries

PART IV
LICENSING OF BANKS

11 Application for licence

12 Grant of licence; revoca tion

13 Alterations; reconstruc tion arrangements and agreements

PART V
RESTRICTIONS ON BUSINESS

14 Restriction on dividends

15 Persons debarred from management

16 Restriction on use of title "bank"

17 Restriction on advances on bank's own shares

18 Restriction on commercial activities of banks

19 Transactions before 1 March 1969 [omitted]

19A Restriction on interest rates

PART VI
RETURNS AND ACCOUNTS

20 Returns

21 Publication of balance sheet

PART VII
EXAMINATION AND AUDIT

22 Minister of Finance may appoint special examiners

23 Production of books to ex aminers

24 Further powers of Minis ter of Finance

25 Annual audit; auditor's report to shareholders

PART VIII
GENERAL

26 [repealed]

27 Minister of Finance may require information as to control

28 Appeal to Supreme Court against revocation of li cence

29 Effect of revocation of li cence

30 Consent of Attorney-Gen eral

31 Imprisonment in default of payment of fine

32 Offences by bodies corpo rate

33 Publication of orders

34 Minister of Finance may make regulations

35 Banking transactions not to be void or voidable through infringement of Act

36 Banking institutions ex isting on 1 March 1969 [omitted]

37 Saving [omitted]

38 Repeal [omitted]

39 Commencement [omitted]

[20 February 1969]

[preamble and words of enactment omitted]

PART I
PRELIMINARY

Interpretation; general

1 (1) In this Act, unless the context otherwise requires,—

"approved auditor" means an approved auditor appointed for a bank pursuant to section 25;

"bank" means a company carrying on banking business or which is authorized by its incorporating Act to carry on banking business;

"banking business" means the business of receiving on current, savings, deposit or other similar account, money which is re payable on demand by cheque or order and which may be in vested by way of advances to customers or otherwise;

"Bermudian" means a person who has Bermudian status within the meaning of the Bermuda Immigration and Protection Act 1956 [title 5 item 16], and includes the Crown, any licensed bank, in so far as, and as long as, it is complying with section 3(1)(b), (c) and (d), a local statutory corporation and any com pany in which the percentage of shares beneficially owned by Bermudians is not less than eighty per centum of the total is sued share capital of that company, and cognate expressions shall be construed accordingly;

"company" means a company to which the Companies Act 1981 [title 17 item 5] applies;

"director" includes a provisional or alternate director;

"licensed" means licensed under this Act to carry on banking business;

"local statutory corporation" means a corporation sole or a cor poration aggregate, other than a company, incorporated by an Act, the principal functions of which relate to operations and affairs in Bermuda;

"Minister" means the Minister of Finance;

"shares" means shares of every description, and includes stock, and cognate expressions shall be construed accordingly.

(2) Nothing in the definition of "banking business" shall be construed so as to preclude a licensed bank (being so authorized by its incorporating Act) from taking time deposits or repaying money otherwise than on demand or, subject to section 18, otherwise conducting business of a type and in the manner usually carried on by a bank.

(3) References to carrying on banking business are references to carrying on such business in Bermuda or from a place of business in Bermuda.

Interpretation; share beneficially owned by a Bermudian; company Bermudian controlled; subsidiary of a bank

2 (1) No share shall be deemed to be beneficially owned by a Bermudian if—

(a) that Bermudian is in any way under any obligation to exercise any right attaching to that share at the instance of or for the benefit of, any person who is not Bermu dian; or

(b) that share is held jointly or severally with any person who is not Bermudian; or

(2) For the purposes of this Act, a company shall be deemed to be Bermudian controlled if the Minister is satisfied that effective control is not, either directly or indirectly, or by reason of any arrangement, arti fice or device, vested in or permitted to pass to persons who are not Bermudians.

(3) Notwithstanding subsection (1), a share shall be deemed to be beneficially owned by a Bermudian if—

(a) it is owned by a Bermudian as trustee and every person having a beneficial interest in the trust is a Bermudian; or

(b) it is owned by a Bermudian as a nominee for another who is also Bermudian and no one is in any way under any obligation to exercise any right attaching to that share at the instance of', or for the benefit of, any

person who is not a Bermudian:

Provided that this subsection shall not apply to any ownership of shares to which subsection (1)(c) applies.

(4) For the purposes of subsection (1), a company shall be deemed to be a subsidiary of a bank if—

(a) that bank owns more than fifty per centum of the shares in that company; or

(b) that bank is in a position to exercise more than fifty per centum of the voting rights in that company; or

(c) by means of any arrangement, artifice or device, effective control in that company can be exercised either directly or indirectly by that bank.

[section 2 amended by 1990:52 effective 12 July 1990]

PART II
REQUIREMENT FOR BANKS

Requirements for carrying on banking business

3 (1) Notwithstanding any other Act but subject to section 4, no person shall carry on banking business other than a company—

(a) the incorporating Act of which makes provision in accor dance with section 5;

(b) in respect of which the percentage of Bermudian direc tors and of shares beneficially owned by Bermudians conform to section 6;

(d) which is Bermudian controlled;

(e) in relation to which the amount subscribed and paid up in cash by way of share capital is not less than two hun dred and forty thousand dollars;

(f) the byelaws of which make provision in accordance with section 7; and

(g) which is licensed by the Minister pursuant to section 12 to carry on banking business.

(2) Any person who contravenes subsection (1) commits an of fence:

Punishment on summary conviction: a fine of $720 for each day during which the offence continues.

Punishment on conviction on indictment: a fine of $3,600 for each day during which the offence continues.

Exempted companies (as defined Companies Act 1981) carrying on banking business

4 Section 3(1)(a) to (f) shall not apply to an exempted company, within the meaning of section 127 of the Companies Act 1981 [title 17 item 5], carrying on banking business in so far as, and so long as, that company is—

(a) authorized by its incorporating Act to carry on such business;

(b) licensed by the Minister pursuant to section 12 to carry on such business; and

and, accordingly, section 5 (other than paragraph (a) ), Part III and sec tion 27 shall not apply to such a company.

What incorporating Act of bank must contain

5 The incorporating Act of a bank shall provide—

(a) that it is authorized to carry on banking business; and

(b) that in the event of the assets of the bank being insuffi cient to meet its engagements, any person who has held shares within the twelve months preceding the date when the winding up of the bank was deemed to com mence by virtue of section 162 of the Companies Act 1981 [title 17 item 5], shall be deemed to be indebted to the bank in a sum equal to the aggregate of the follow ing:

(i) the amount unpaid on any shares held by that person during that period; and

(ii) an amount equal to the par value of any shares held by him during that period.

PART III
BERMUDIAN SHAREHOLDING ETC. IN BANKS AND ANCILLARY MATTERS

Percentage of Bermudian directors; percentage of shares held by Bermudians

6 (1) The percentage of Bermudian directors, and the percentage of shares beneficially owned by Bermudians, in a bank shall not be less than 60 per centum in each case:

Provided that a bank may continue to carry on banking business notwithstanding that it is in breach of this section (and accordingly of section 3(1)(b)) in so far as, and so long as, it is acting in accordance with subsection (2); and it shall be a good defence to any prosecution brought under section 3(2) for the bank to prove that it was so acting.

(2) A bank shall act in accordance with this subsection if the percentage of shares beneficially owned by Bermudians in that bank falls below sixty per centum by virtue of factors which are beyond the control of the bank and the bank gives notice in writing to the person who is not Bermudian and whose ownership of shares results in the bank being in breach of subsection (1) (and accordingly of section 3(1)(b)) as soon as the bank becomes aware that the percentage of shares beneficially owned by Bermudians in that bank is less than the percentage specified in that subsection, that—

(a) he must divest himself of his interest in those shares, as soon as may be and, in any event, not later than three years from the date upon which he receives the notice; and

(b) that he must not exercise any voting rights accruing to such shares from the date upon which he receives the notice,

and the three years calculated in accordance with paragraph (a) has not elapsed:

Provided that the Minister may in any particular case, for good cause, extend the period of three years for a further period not exceeding one year.

(3) Any person who, after a notice has been served upon him under subsection (2), exercises any voting rights or fails to divest himself of his shares within three years, or within such further period as the Minister may allow under the proviso to subsection (2), shall be liable to forfeit his shares to the Crown upon it being proved to a court of sum mary jurisdiction that he has exercised such voting rights or failed so to divest himself within such period as aforesaid; and, where such shares are so forfeited, the Escheats Act 1871 [title 8 item 103], shall apply thereto as if such shares were escheated to the Crown.

(4) For the purposes of subsection (2), a bank shall be deemed to become aware that the percentage of Bermudians beneficially owning shares in that bank is less than the percentage specified in subsection (1) three days after the day upon which any director of the bank would, if acting with due diligence, have become aware of that fact.

What byelaws of bank must contain

7 The byelaws of a bank shall provide that—

(a) any application for allotment of shares shall state whether or not the applicant is Bermudian;

(b) any instrument of transfer shall state, with respect to both the transferor and the transferee, whether or not they are Bermudian; and

(c) any shareholder in the bank shall inform the directors of the bank of any change in relation to his becoming, or ceasing to be, Bermudian, within fourteen days of such change.

Return of shareholders

8 (1) Every bank intending to carry on banking business shall, before commencing such business, forward to the Minister a return of shareholders as at the date of making the return which shall be signed by the directors of that bank.

(2) Every bank shall, in the month of January of each year other than the year in which the banking business was commenced, for ward to the Minister a return of shareholders as at the 31st day of De cember, of the immediately preceding year and shall not carry on bank ing business in any year unless such a return is filed in the month of January of that year, and such return shall be signed by two or more di rectors or one director and the secretary:

Provided that the Minister may in any particular case grant an extension of time for compliance with this subsection if he is satisfied that non-compliance is not wilful or is due to circumstances beyond the control of the directors of the bank.

(3) A return of shareholders to be made under this section—

(a) shall contain the following particulars:

(i) the number and par value of the shares issued by the bank;

(ii) a statement of the number and par value of the shares beneficially owned by Bermudians; and

(iii) a statement of the number and par value of the shares held by other persons; and

(b) [omitted] [spent]

(4) Any person who knowingly and wilfully signs a return made for the purposes of this section which is false in a material particular commits an offence:

Punishment on summary conviction: a fine of $720.

Punishment on conviction on indictment: a fine of $7,200.

Allotment and transfer of shares

9 (1) No allotment of shares in a bank shall be made by the di rectors or officers of the bank if such allotment will to the knowledge or belief of them, or any of them, result in the number of shares beneficially owned by persons who are not Bermudians exceeding forty per centum of the total number of the shares issued by the bank.

(2) The directors and officers of a bank shall decline to register any transfer of shares in the bank if such transfer will to the knowledge or belief of the directors, or any of them, result in the number of shares beneficially owned by persons who are not Bermudians exceeding forty per centum of the total number of the shares issued by the bank.

(3) Any director or officer of a bank who is knowingly a party to any allotment of shares contrary to subsection (1) or who is knowingly a party to authorizing or permitting any transfer, or registration of a transfer, of shares contrary to subsection (2), commits an offence:

Punishment on summary conviction: a fine of $720.

Punishment on conviction on indictment: a fine of $7,200.

Directors may make enquiries

10 (1) Where it is stated in an application for allotment, or in an instrument of transfer, of shares in a bank that an applicant, transferor or transferee is Bermudian, the directors may require that person to fur nish such proof of the correctness of such statement as the directors consider necessary; and, in the absence of such proof, the directors may decline to allot any shares or register the transfer.

(2) The directors of a bank may at any time enquire in writing of any person who owns a share in the bank—

(a) whether or not he is Bermudian;

(b) whether or not he is the beneficial owner of the share;

(c) whether or not he is in any way under any obligation to exercise any right attaching to that share at the instance of, or for the benefit of, another person, and, if so, the name of that other person and whether or not that other person is Bermudian; and

(d) whether he owns that share jointly or severally with an other person and, if so, the name of the other person who has such an interest and whether or not that other person is Bermudian,

and if it is stated in any reply made to an enquiry under this subsection that any per son is Bermudian the directors may further require the person making that statement to furnish such proof of the correctness of that statement as the directors con sider necessary.

(3) Any person of whom an enquiry is made, or to whom a re quirement is addressed, under this section shall reply in writing within fourteen days of the receipt of the enquiry or the requirement and shall give the information required and no person shall be liable for breach of any contract, trust or other obligation which is binding on him in law for supplying such information.

(4) Any person who fails to reply in accordance with subsec tions (2) and (3) or makes a reply or furnishes information or purported proof which is false in a material particular commits an offence:

Punishment on summary conviction: a fine of $720.

Punishment on conviction on indictment: a fine of $7,200.

PART IV
LICENSING OF BANKS

Application for licence

11 (1) Any bank desirous of commencing or carrying on banking

business after 1 March 1989 shall apply to the Minister for a licence.

(2) An application for a licence under this Act shall be made to the Minister in such form and in such manner as may be specified by the Minister, and shall be accompanied by a copy of the incorporating Act of the bank and the byelaws thereof and such other information as the Minister may require:

Provided that nothing in this subsection shall require a bank to disclose information with respect to the affairs of any customer of the bank.

(3) The applicant shall, not less than seven days prior to an application for a licence under subsection (1), advertise in an appointed newspaper, as defined in the Companies Act 1981 [title 17 item 5], the applicant's intention to apply for a licence.

[section 11 amended by 1998 : 35 effective by notice in Official Gazette]

Grant of licence; revocation

12 (1) Subject to this Act, the Minister may, in his discretion, grant a licence in respect of which application has been made under section 11; but if the Minister is of the opinion that it would be undesir able in the public interest that the licence should be granted, he may refuse to grant it and need not give any reason for so refusing.

(2) Without prejudice to the generality of subsection (1), the Minister shall refuse to grant a licence unless he is satisfied that the bank—

(a) complies with, and is likely to continue to comply with, section 3(1) or is an exempted company to which section 4 applies, as the case may be;

(b) has appointed an approved auditor who has agreed to perform an annual audit on the books of the company; and

(i) personnel; and

(ii) premises,

to carry on banking business:

Provided that, and notwithstanding subsection (1), if the Minis ter intends to refuse the grant of a licence under this subsection he shall give notice to the bank of his intention to do so specifying therein the grounds therefor and shall afford the bank an opportunity of submitting to him written representations; and shall not issue his decision until such time, being not less than fourteen days, as may be specified in the notice, has elapsed from the date of the notice.

(3) The Minister may at any time by Order revoke a licence—

(a) for any contravention of any provision of this Act or any regulation made thereunder; or

(b) for failure by the bank concerned to comply with any di rective issued by the Minister under this Act; or

(c) if the bank concerned is carrying on business in a man ner detrimental to the public interest or to the interest of the depositors of such bank; or

(d) if the bank concerned ceases to carry on banking busi ness; or

(e) if the bank concerned goes into liquidation or is wound up or otherwise dissolved; or

(f) in the circumstances referred to in section 24(c); or

(g) for persistent failure to pay fees payable under the Banks and Deposit Companies (Fees) Act 1975 [title 14 item 41].

[section 12(3)(g) amended by 1990:13 effective 28 March 1990]

(4) Before making an Order under subsection (3), the Minister shall give the bank concerned notice in writing of his intention to do so specifying therein the grounds on which he proposes to revoke the li cence and shall afford that bank an opportunity of submitting to him a written statement of objections to the making the Order; and thereafter the Minister shall advise the bank of his decision in the matter.

Alterations; reconstruction arrangements and agreements

13 (1) When and as often as any amendment is made in the incor porating Act or byelaws of a bank that bank shall, within three months after such amendment has been made, give the Minister full particulars in writing of such amendment.

(2) Particulars given pursuant to subsection (1) shall be verified by an affidavit or declaration sworn to or, as the case may be, made by a senior officer of the bank.

(3) Where a reconstruction of any bank has occurred or where any bank makes an arrangement or enters into an agreement for—

plementation of such arrangement or agreement, inform the Minister in writing thereof.

(4) Where any particulars or information are received under this section, the Minister, having regard to the nature of such particulars or information and notwithstanding the fact that the bank concerned is a licensed bank, may direct that bank in writing to apply for another li cence within such time and in such form as the Minister may determine.

(5) The issue of a directive pursuant to subsection (4) shall not affect the validity of any licence subsisting at the date of such directive and which was granted to the bank to which such directive issued.

(6) Every licence to which subsection (5) refers shall be of full force and effect until—

(a) it is revoked by the Minister by Order under section 12(3); or

(b) another licence is granted to the bank concerned upon an application made pursuant to a directive under sub section (4), and thereafter the licence referred to in sub section (5) shall cease to have effect.

PART V
RESTRICTIONS ON BUSINESS

Restriction on dividends

14 No bank shall pay any dividend on its shares until all its capi talized expenditure (including preliminary expenses, organization ex penses, share selling commission, brokerage and amounts of losses in curred) not represented by tangible assets has been completely written off.

Persons debarred from management

15 (1) Any person—

(a) who has been a director of, or directly concerned in the management of, a bank which has had its licence re voked in accordance with section 24(c) or has been wound up by a Court; or

(b) who has been sentenced by a Court in any country to a term of imprisonment for an offence involving dishonesty and has not received a full pardon for that offence; or

shall not without the express authorization of the Minister act or con tinue to act as a director, manager, secretary or other employee of, any bank.

(2) Any person who contravenes subsection (1) commits an of fence:

Punishment on summary conviction: a fine of $720.

Punishment on conviction on indictment: a fine of $14,400.

Restriction on use of title "bank"

16 (1) No person other than a licensed bank shall use the word "bank" or any of its derivatives in any language in the description or title under which such person is carrying on business in Bermuda, or so make any such representation in any bill head, letter paper, notice, ad vertisement or in any other manner whatsoever:

Provided that nothing in this subsection shall apply to an asso ciation of banks, formed for the protection of their common interests.

(2) Every licensed bank shall use as part of its description or title the word "bank" or one or more of its derivatives in any language.

(3) Any person contravening this section commits an offence:

Punishment on summary conviction: a fine of $720 for each day during which the offence continues.

Punishment on conviction on indictment: a fine of $3,600 for each day during which the offence continues.

Restriction on advances on bank's own shares

17 A bank shall not—

(a) grant to any person, firm or corporation, or to any group of companies or of other persons which group is under the control or influence of one and the same person, any advance or credit facility, or give any financial guarantee or incur any other liability on behalf of such person, firm, corporation, or group so that the total value of the advances, credit facilities, financial guarantees and other liabilities in respect of such
person, firm, corporation or group is at any time more than twenty-five per centum of the sum of the paid-up capital and published reserves of the bank:

Provided that this paragraph shall not apply to transac tions between banks or between the branches of a bank or to the purchase of telegraphic transfers, or to the pur chase of bills of exchange or documents of title to goods where the holder of such bills or documents is entitled to payment outside Bermuda for exports from Bermuda or to advances made against such transfers, bills or docu ments; and

(b) grant any advance or credit facility against the security of its own shares.

Restriction on commercial activities of banks

18 A bank shall not—

(a) engage, whether on its own account or on a commission basis, in the wholesale or retail trade, including the im port or export trade, or otherwise have a direct interest in any commercial, agricultural, industrial or other un dertaking, except as permitted under paragraph (b) and except in so far as may be necessary with respect to such interest as a bank may acquire in the course of the satisfaction of debts due to it; but all such interests shall be disposed of at the earliest suitable opportunity;

(b) acquire, or hold to an aggregate value exceeding twenty-five per centum of the sum of the paid-up capital and published reserves of that bank, any part of the share capital of any financial, commercial, agricultural, in dustrial or other undertaking except such shareholding as a bank may acquire in the course of the satisfaction of debts due to it which shareholding shall, however, be disposed of at the earliest suitable moment:

Provided that this paragraph shall not apply to any shareholding approved in writing by the Minister in a subsidiary bank or in a subsidiary company formed by a bank for the execution of nominee, executor or trustee functions or other functions incidental to banking busi ness;

(c) purchase, acquire or lease real estate except as may be necessary for the purpose of conducting its business or housing its staff or providing amenities for its staff hav ing regard to any reasonable requirements for future ex pansion of its business or staff; but in the event of any debt due to a bank which is secured upon any real or other property of the debtor becoming endangered, the bank may acquire such property which shall, however, be resold at the earliest suitable moment:

Provided that this paragraph shall not apply to the pur chase, acquisition or lease of real estate the greater por tion of which is bona fide required for the purposes of the bank but the lesser portion of which is not so re quired and is physically indivisible from the greater por tion.

Transactions before 1 March 1969

19 [omitted]

Restriction on interest rates

19A A bank shall not become a party to a contract which includes a term or provision that is made unenforceable by section 8(1) of the Inter est and Credit Charges (Regulation) Act 1975 [title 17 item 22].

PART VI
RETURNS AND ACCOUNTS

Returns

20 (1) Subject to subsection (3), every bank shall submit to the Minister, in such form as he may from time to time approve, not later than sixty days after the last day of the six-month period to which it re lates, a six monthly statement of assets and liabilities accompanied by a statement showing the amounts of all outstanding unsecured advances or unsecured credit facilities and a return providing an analysis of cus tomers' liabilities to the bank in respect of loans, advances and other as sets of the bank at the close of the last business day of that six-month period.

(2) Subject to subsection (3), the Minister may require a bank to submit such further information as he may deem necessary for the proper understanding of any statement or return furnished by that bank under subsection (1) and such information shall be submitted
within such period and in such manner as the Minister may require.

(3) No statement, return or information shall be required under subsection (1) or subsection (2), as the case may be, with respect to the affairs of any customer of a bank.

(4) The period within which any statement or return is required to be submitted under this section may be extended by the Minister where he considers that there are circumstances justifying an extension.

(5) Any bank which fails to comply with any of the provisions of subsection (1) or subsection (2) or with any requirement of the Minister thereunder commits an offence:

Punishment on summary conviction: a fine of $720 for each day during which the offence continues.

Punishment on conviction on indictment: a fine of $3,600 for each day during which the offence continues.

(6) Any statement or return submitted by a bank under sub section (1) and any information submitted by a bank under subsection (2) shall be treated as secret and for official purposes only.

(7) For the purposes of subsection (1), "unsecured advances and unsecured credit facilities" means advances or credit facilities made without security, or, in respect of any advance or credit facility made with security, any part thereof which at any time exceeds the market value of the assets constituting that security.

Publication of balance sheet

21 (1) Not later than four months after the close of each financial year of each bank, or such longer period as the Minister may, in any particular case, permit, the bank shall exhibit in a conspicuous position in each of its offices and branches and forward to the Minister copies of its balance sheet and profit and loss account and the full and correct names of the directors of the bank, together with a statement of which directors are Bermudian, and the balance sheet and profit and loss ac count shall bear on their face the certificate of an approved auditor.

(2) Any bank which contravenes any of the provisions of this section commits an offence:

Punishment on summary conviction: a fine of $720.

Punishment on conviction on indictment: a fine of $3,600.

PART VII
EXAMINATION AND AUDIT

Minister of Finance may appoint special examiners

22 The Minister may at any time appoint one or more persons who, in his opinion, is or are qualified to make a special examination under conditions of secrecy of the books and affairs of any bank—

(a) where he has reason to believe that such bank may be carrying on its business in a manner detrimental to the interests of its depositors and other creditors or may have insufficient assets to cover its liabilities to the pub lic or may be contravening any of the provisions of this Act;

(b) where application is made by shareholders holding not less than one-third of the total number of shares in that bank for the time being issued, or by depositors holding not less than one-half of the gross amount of the total deposit liabilities of that bank, and the applicants have submitted to the Minister such evidence as he may con sider necessary to justify an examination and have fur nished adequate security for the payment of the costs of the examination;

Production of books to examiners

23 (1) Every bank of which a special examination has been or dered under section 22 shall produce to the person or persons appointed under that section, at such times and in such places as such person or persons may specify (being times and places which, in the opinion of such person or persons, would not be detrimental to the conduct of the normal daily business of the bank) all books, accounts and documents in the possession or custody of that bank, or of which it is entitled to pos session or custody, relating to its business, and its directors and officers shall give, within such times as such person or persons may specify, such oral information concerning its business as may be required of them.

(2) If any book, account, document or information is not pro duced in accordance with subsection (1), the bank commits an offence:

Punishment on summary conviction: a fine of $720 for each day during which the offence continues;

and if any book, account, document or information specified in subsec tion (1) is false in any material particular, the bank commits an offence:

Punishment on conviction on indictment: a fine of $14,400.

(3) As soon as may be after the conclusion of an examination under this Part, the person or persons appointed under section 22 shall submit a full report on such examination to the Minister who shall for ward a copy thereof to the Head Office of the bank.

(4) The Minister may order that all expenses of and incidental to an examination under this Part shall be paid by the bank examined and he may also, in respect of examinations made under section 22(b), order that such expenses shall be defrayed by the applicants.

Further powers of Minister of Finance

24 If, in the opinion of the Minister an examination under this Part shows that the bank concerned is carrying on its business in a manner detrimental to the interests of its depositors and other creditors, or has insufficient assets to cover its liabilities to the public, or is contravening any of the provisions of this Act, the Minister may take such one or more of the following steps from time to time as may seem to him necessary—

(a) require the bank forthwith to take such remedial mea sures as he may consider necessary in relation to its business; or

(b) appoint a person who, in his opinion, has had adequate training and experience to advise the bank in the proper conduct of its business and fix the remuneration to be paid by the bank to such person; or

(c) unless he is satisfied that the bank is taking adequate measures to put its affairs in order, make an Order un der section 12(3)(f) revoking the bank's licence.

Annual audit; auditor's report to shareholders

25 (1) Every bank shall appoint annually an approved auditor whose duties shall be to make to the shareholders of that bank a report upon the annual balance sheet and accounts, and in every such report the auditor shall state whether, in his opinion, the balance sheet is full and fair and properly drawn up, whether it exhibits a true and correct statement of the bank's affairs, and, in any case in which the auditor has called for an explanation or information from the officers or agents of the bank, whether this is satisfactory.

(2) The report of an approved auditor under subsection (1) shall be read together with the report of the directors of the bank at the annual meeting of shareholders and copies of that report shall be for warded to the Minister at the same time as the copies of the balance sheet and profit and loss account forwarded under section 21, and if any default is made in complying with the requirements of this subsection, the bank concerned commits an offence:

Punishment on summary conviction: a fine of $720.

(3) If a bank fails to appoint an approved auditor under sub section (1) or, at any time, fails to fill a vacancy for such auditor, the Minister may appoint an approved auditor and shall fix the remuneration to be paid by that bank to such auditor.

(4) The duties and powers conferred by section 23(1) and (2) in relation to a person or persons appointed under section 22 are hereby conferred also in relation to approved auditors.

(5) For the purposes of this section, an approved auditor is an auditor who is a member of one of the professional bodies for the time being declared by the Minister by notice in the Gazette to be approved for such purposes.

(6) No person having an interest in any bank otherwise than as depositor or shareholder, and no director, officer or agent of any bank shall be eligible for appointment as an approved auditor for that bank; and any person appointed as such auditor to any bank who subse quently acquires such interest or becomes a director, officer or agent of that bank shall cease to be an approved auditor.

PART VIII
GENERAL

26 [repealed by 1975:21]

Minister of Finance may require information as to control

27 (1) Without prejudice to the generality of section 11(3), the Minister may by notice in writing require the directors of a bank to for ward to him such information as to the directors and shareholders of the bank as the Minister may specify.

(2) A notice under subsection (1) may require that the directors set out in writing within such period as may be specified in the

notice the facts in relation to the directors and shareholders which the directors contend establish that the bank is Bermudian controlled and such facts shall specify the extent to which the control of any corporate body hold ing shares in the bank is vested in Bermudians.

(3) The failure of the directors of a bank to comply with a re quirement made under this section or to comply with the requirement in such a way as to establish a prima facie case that the bank is Bermudian controlled shall entitle the Minister to act as though that bank were not Bermudian controlled.

Appeal to Supreme Court against revocation of licence

28 (1) An appeal shall lie to the Supreme Court against an Order revoking a licence under section 12(3).

(2) An appeal under this section shall lie at the instance of the bank affected thereby and shall be commenced by notice in writing served upon the Attorney-General within twenty-one days after the day on which the Order made under section 12 takes effect.

(3) Subject to subsection (2), the Chief Justice may make rules in the like manner and subject to the like formalities as he may make rules of procedure for the Supreme Court, for the procedure on an ap peal brought under subsection (1).

(4) The proceedings on an appeal brought under this section shall be held in camera unless any party thereto applies for the pro ceedings to be in open court.

(5) On an appeal brought under this section, the Supreme Court may confirm, reverse, vary or modify the decision of the Minister or remit the matter with the opinion of the Supreme Court thereon to the Minister.

(6) An appeal under this section shall not have the effect of suspending the execution of the decision against which the appeal is brought pending the determination of the appeal.

Effect of revocation of licence

29 (1) Upon making of an Order under section 12(3) revoking a li cence, the bank affected thereby shall thereupon cease to carry on all business, whether or not such business is banking business, until such time as the Supreme Court or the Minister otherwise orders on applica tion made pursuant to this section.

(2) Without prejudice to section 204 of the Companies Act 1981 [title 17 item 5], in the event of a bank whose licence has been revoked being wound up, an application may be made to the Supreme Court for an order enabling the bank to recommence its business in so far as that may be requisite for the beneficial winding-up of the bank, and the Supreme Court may, in its discretion, make such order subject to such terms and conditions as the Court may see fit to specify therein.

(3) In the case of a bank whose licence has been revoked but which is not wound up, that bank may apply to the Minister for an order enabling the bank to recommence such business, other than banking business, as may be specified in the application and the Minister may, in his discretion, make such order subject to such terms and conditions as he may see fit to specify therein,

(4) Any bank which contravenes this section, or which is in breach of the terms or conditions of an order made under this section, commits an offence:

Punishment on summary conviction: a fine of $720 for each day during which the offence continues.

Punishment on conviction on indictment: a fine of $3,600 for each day during which the offence continues.

Consent of Attorney-General

30 No prosecution in respect of any offence committed under this Act shall be instituted except by or with the consent of the Attorney-Gen eral.

Imprisonment in default of payment of fine

31 Notwithstanding section 61 of the Criminal Code, a person upon whom a fine is imposed under this Act may be sentenced in default of payment thereof to imprisonment in the case of a fine—

(a) not exceeding twelve hundred dollars for a period not ex ceeding three months;

(b) exceeding twelve hundred dollars but not exceeding two thousand four hundred dollars for a period not exceed ing six months;

Offences by bodies corporate

32 Where an offence under this Act which has been committed by a corporate body is proved to have been committed with the consent or connivance of, or to be attributable to any negligence on the part of, any

Bermuda Consolidated Legislation

Banks Act 1969