Friday, 30 July 2021
Banks in Vanuatu. Offoshnye accounts in Vanuatu
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Banking structure consists of the Reserve Bank - State Bank of Vanuatu, a large number of well-known international commercial banks, merchant banks and state-owned Development Bank (Divelopment Bank "). In addition, there is a large and offshore banking center. Many international commercial banks are licensed to conduct banking activities in Vanuatu, as well as with non-residents. These banks provide international services through a worldwide network of branches and correspondent banks.

Vanuatu's domestic banking system consists of two foreign banks and two banks owned by local actors. The activities of all these banks is controlled by the Reserve Bank of Vanuatu. Operating within the country banks typically use a "local" company with limited liability and referred to as "local" banks, while offshore (foreign) banks typically use tax-exempt company, and are called "exempt" banks. There are two types of licenses: a license enables financial institutions to carry out most types of banking activities, except for transactions with checking accounts and banking license includes transactions with checks. Non-taxable to the bank are not usually allowed to offer checking accounts, however, both types of licenses are equivalent to the operational point of view, except for the fact that the banking license allows you to use the word "bank" in the name of the institution.

Until 2002, the licensing of banks was carried out by the Commission on Financial Services, and then going to meet the requirements of international public opinion and opposing money laundering, was revised Law on the International Banking Act, which transferred the licensing of the National Reserve Bank. Department of supervision of banks serves as the Reserve Bank in terms of ensuring soundness and stability of the financial system. Laws and regulations that govern how and who uses the Reserve Bank of Vanuatu: the Law on Reserve Bank of Vanuatu [Cap. 125] Act, the International Banking Act (IBA), The Financial Institutions Act (FIA). Are any differences in the control of local and offshore banks are not available. Monitoring is carried out by inspection of banks in the field and analysis of data provided by the Reserve Bank.

Local and offshore banks are obliged to submit monthly and quarterly data on assets and liabilities, profitability, large loans and deposits, maturity of assets and liabilities, credit risk across countries, the risks of partner organizations, capital adequacy, loan classification (asset quality) and equity investments. In addition, local banks are also required to comply with the mandatory requirements to provide information for monitoring the financial situation and improve market discipline. All banks are required to submit to the Reserve Bank copies of their audited annual reports, and local banks also publish them in the press and to the public upon request. The Reserve Bank also conducts inspections of banks on the ground. Typically, such checks are carried out at least once every two years, and they are often limited to verifying the degree of risk of loans and policy on this issue, as well as the implementation of measures to combat money laundering. In addition, the Reserve Bank holds annual consultations with the senior management of banks to discuss emerging as a result of inspections issues. In performing its duties the Department of supervision of banks published a series of recommendations, which must comply with all banks licensed in accordance with the Law on Financial Institutions Act and the International Banking Act. These include:

1) The requirement of minimum capital. The Reserve Bank has introduced a scheme of capital adequacy, which meets the international standard set by the Basel Committee on Banking Supervision. The Reserve Bank has the authority to require banks to maintain a higher level of capital if it deems it necessary, taking into account such factors as the risk of the bank and type of its activities. Local banks must maintain minimum capital of 200 million local currency units, and offshore banks - at least 0.5 million dollars.

2) The maximum limits of risk in issuing loans. The maximum limit of risk for a single customer or group of related customers is 25% of capital in comparison with the risks of non-bank and non-governmental organizations. This limit risk also applies to subsidiaries of banks and related enterprises. The Reserve Bank has the right, in exceptional cases, allow a greater risk in lending.

3) Restrictions on equity. Banks need to obtain permission of the Reserve Bank on the size of the total shareholding in enterprises operating outside the financial sector, if such participation exceeds 25% of their capital. Is greater than this amount is deducted from bank's own funds. Before the establishment of a subsidiary in Vanuatu or abroad must obtain a permission of the Reserve Bank of Vanuatu.

4) Customer Due Diligence. The purpose of this recommendation is to ensure that banks used in the work practice of examining clients. This practice is related to combating money laundering. The Reserve Bank is considering a policy study of their customers broader than just the fight against money laundering and terrorism, and sees it as a general prudent, cautious approach to banking. Implementation of the policy study customers is critical for effective management of banking risks.

5) Credit Risk Management and Recommendations for the classification of loans and credit deterioration in confidence. These recommendations set the minimum requirements of the Reserve Bank to the classification of assets and measures to reduce losses.

6) Supervision of banks' liquidity. These guidelines describe an approach of the Reserve Bank to control liquidity. According to this recommendation, the banks must maintain a minimum ratio of specific liquid assets on its balance sheet. Currently, this ratio for local banks is 12%. Offshore banks are required to implement in their practice of the liquidity management policy to ensure compliance with the requirements of investors.

7) The relationship between banks and their external auditors and the Reserve Bank. This recommendation requires banks to report annually the external auditors that the information submitted to the Reserve Bank are correct and that the bank operates in accordance with all standards and requirements. Under this recommendation, the Reserve Bank may also require that the external auditor specifically examined the evaluation system used by bank risk or operations.

8) Financial institutions. This recommendation is aimed at ensuring that received a license from the Reserve Bank's financial institution is well managed and to occupy key positions people have qualifications and experience relevant to their responsibilities. The Reserve Bank may require displacement of persons from their positions in a financial institution if they no longer meet the relevant criteria.

In addition to the above criteria, caution and prudence and Financial Institutions Act and the Act on the International Banking Act contains a number of other provisions designed to ensure proper management of banks and protect depositors' interests. Both the Act describe the applicable Reserve Bank of criteria for assessing applications for banking activities. Prior to the issuance of banking licenses Reserve Bank should conduct due diligence and evaluation of institutions, including property belonging to install, test management, the assumed capital (source and structure), to assess risk management, check out the accounting systems and internal controls.

Financial institutions and domestic banks operating in Vanuatu:

ANZ Bank (Vanuatu) Ltd.. (ANZ Bank (Vanuatu) Ltd)
WESTPAC Banking Corporation (Westpac Banking Corporation)
Neshnl s Bank of Vanuatu (National Bank of Vanuatu)
Europeana Bank Limited (European Bank Ltd)

International banks operating in Vanuatu under the control of the Reserve Bank of Vanuatu under the Law on International Banking Act number 4 of 2002:

Harrison Bank Limited (Garrison Bank Limited)
IBA Bank Limited (IBA Bank Limited)
LMM And these things Banker Priv Limited (LMM & CIE, Banquiers Prive's Limited)
Nautilus International Bank Limited (Nautilus International Bank Limited)
United Investment Bank Limited (United Investment Bank Limited)
Vianka Bank Limited (Vianka Bank Limited)

 
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