THE REGULATORY FRAMEWORK IN THE SOLOMON ISLANDS

Whilst CBSI expects the licensed financial institutions to self-regulate themselves to a large extent, a key role of banking supervision is to monitor the application of the agreed prudential standards to limit risk. These standards should be reviewed periodically by CBSI to allow for changing circumstances.

The “rules and regulations” for the financial sector in SI are found in the Financial Institutions Act 1998 (as amended) which provides a supervisory umbrella and addresses issues such as:

The “rules and regulations” for the financial sector in SI are found in the Financial Institutions Act 1998 (as amended) which provides a supervisory umbrella and addresses issues such as:

  • defining financial institutions and banking business;
  • rules regarding ownership;
  • licensing requirements;
  • minimum capital requirements;
  • restrictions of business activities;
  • definition of the roles and duties of external auditors;
  • measures to protect the interest of depositors;
  • a supervisory and examination system;
  • situations where CBSI may intervene in the operations of a financial institution;
  • transfer of ownership or control of a financial institution; and
  • sanctions for non-compliance by financial institutions or their officers.

A supervisory and examination system is a constant continuous and perpetual cycle that has four components:

  • CBSI’s goals and objectives,
  • monitoring and the examination planning phase,
  • on-site examination phase, and
  • reporting and corrective actions phase.

Credit Union Art

An Act to regulate the operation of credit unions in Solomon Islands and to provide for other matters connected therewith or incidental thereto

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An Act to provide provisions in line with current International best practices relating to Central Banking. The current Central Bank to continue under the new legislative changes incorporated under this Act; The Central Bank of Solomon Islands Act (CAP 49) to be repealed; The Act Further provides for new duties and powers of the Central Bank and for other matters connected therewith or incidental thereto.

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