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Central Bank of Vanuatu (Special Provisions) Act 1989

Commencement: 8 May 1989

REPUBLIC OF VANUATU

THE CENTRAL BANK OF VANUATU (SPECIAL PROVISIONS) ACT
No. 7 OF 1989

Arrangement of Sections

1. Change of the name of the Central Bank of Vanuatu.
2. Amendment of the Act No. 3 of 1980.
3. Amendment of section 3 of the principal Act.
4. Amendment of section 6 of the principal Act.
5. Insertion of new section 6A in the principal Act.
6. Replacement of section 8 of the principal Act.
7. Insertion of new sections 8A and 8B in the principal Act.
8. Amendment of section 9 of the principal Act.
9. Amendment of section 10 of the principal Act.
10. Replacement of section 11 of the principal Act.
11. Amendment of section 21 of the principal Act.
12. Amendment of section 28 of the principal Act.
13. Amendment of section 35 of the principal Act.
14. Amendment of section 36 of the principal Act.
15. Amendment of section 38 of the principal Act.
16. Amendment of section 39 of the principal Act.
17. Commencement.

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REPUBLIC OF VANUATU

THE CENTRAL BANK OF VANUATU (SPECIAL PROVISIONS) ACT
No. 7 OF 1989

Assent: 18/4/89
Commencement: 8/5/89

To change the name of the Central Bank, and to amend the Central Bank of Vanuatu Act, No. 3 of 1980.

BE IT ENACTED by the President and Parliament as follows:-

CHANGE OF THE NAME OF THE CENTRAL BANK OF VANUATU

1. The Central Bank of Vanuatu shall be known and cited for all purposes by the name the 'Reserve Bank of Vanuatu' and accordingly in every context in which the 'Central Bank of Vanuatu' or 'Central Bank' is mentioned in the Central Bank of Vanuatu Act, No. 3 of 1980 and in any other written law, or in any currency note, coin, notice, permit, receipt, communication, form or other document issued, made required or authorized by or under that Act or any other written law, there shall be substituted for the words 'Central Bank of Vanuatu' of the words 'Reserve Bank of Vanuatu' and for the words 'Central Bank' of the words 'Reserve Bank'.

AMENDMENT TO THE ACT No. 3 OF 1980

2. The Central Bank of Vanuatu Act, No. 3 of 1980 (principal Act) is amended by the substitution for the words 'General Manager' wherever it appears in that Act, of the word 'Governor'.

AMENDMENT OF SECTION 3 OF THE PRINCIPAL ACT

3. Section 3 of the principal Act is amended by the insertion after paragraph (a) of that section of the following paragraph:-

"(aa) to supervise and regulate banking business and the extension of credit;".

AMENDMENT OF SECTION 6 OF THE PRINCIPAL ACT

4. Section 6 of the principal Act is amended by the substitution for the words 'meeting all current expenditure' of the words 'meeting current expenditure'.

INSERTION OF NEW SECTION 6A IN THE PRINCIPAL ACT

5. The following new section is inserted after section 6 of the principal Act:-

"POLICIES TO BE DETERMINED BY THE BOARD

6A. The policies of the Bank in respect of depreciation of assets and accruals of income and expenditure shall be those as may be determined by the Board.".

REPLACEMENT OF SECTION 8 OF THE PRINCIPAL ACT.

6. Section 8 of the Principal Act is repealed and the following section substituted therefor:-

"BOARD OF DIRECTORS

8. (1) There shall be a Board of Directors of the Reserve Bank which shall be responsible for the policy and affairs of the Reserve Bank

(2) The Board shall have power -

(a) to make rules for the conduct of the business of the Reserve Bank;

(b) to make orders with the prior approval of the Minister generally for giving effect to the purposes of this Act;

(c) to issue directives for the purpose of giving effect to the provisions of this Act.

(3) The Board shall comprise four members namely -

(a) the Governor;

(b) a representative from the Ministry of Finance;

(c) two other members.

(4) The members of the Board referred to in subsection 3(b) and 3(c) shall be appointed by the Minister from among persons of recognized standing and experience in business, professional or academic matters.

(5) The Governor, who shall be the chairman of the Board, shall preside at meetings of the Board and shall ensure that the decisions of the Board are implemented and the provisions of this Act and any other law relating to the Reserve Bank are observed.

(6) The term of office of each member of the Board shall be specified in his letter of appointment and shall be for not more than five years.

(7) The members of the Board shall be appointed on such terms and conditions, which may not be altered to their disadvantage during their tenure of office, as may be set out in their letter of appointment and shall be eligible for reappointment.

(8) Any member of the Board, other than the Governor, may resign his office on giving notice in writing to the Minister.

(9) A member of the Board, other than the Governor, shall cease to hold office if the Minister on the recommendation of the Board finds that he is incapable of carrying out his duties, or is guilty of serious misconduct in the performance of his duties of his office, and publishes a notice in the Vanuatu Gazette declaring the office of that member vacant.

(10) A person shall be disqualified from being appointed or for continuing, as a member of the Board -

(a) if he is or becomes a member of Parliament; or

(b) if he becomes a director, officer, or employee of a company other than the Reserve Bank, engaged wholly or mainly in banking business;

(c) if he is or becomes an undischarged insolvent or bankrupt;

(d) if he is convicted of an offence involving moral turpitude;

(e) in the case of a person having professional qualifications, if he is disqualified or suspended from practising his profession by the order of any competent authority made in respect of him personally by reason of his misconduct.

(11) (a) If any member of the Board dies, resigns, is removed from office or otherwise vacates his office, another person shall be appointed at the earliest opportunity to fill the vacancy.

(b) Any member of the Board appointed under paragraph (a) of this subsection shall, unless he earlier resigns or vacates his office by death or removal, hold office for the unexpired part of the term of office of the member whom he succeeds.

(12) The names of all members of the Board as first constituted and every change in the membership thereof shall be published in the Gazette.

(13) Each member of the Board, other than the Governor, shall receive such allowances as may be determined by the Minister from time to time."

INSERTION OF NEW SECTIONS 8A and 8B IN THE PRINCIPAL ACT

7. The following new sections are inserted after section 8 of the principal Act:-

"APPOINTMENT OF THE GOVERNOR AND HIS FUNCTIONS

8A. (1) The Governor shall be a person of recognised experience in financial matters, and shall be appointed by the Prime Minister on the recommendation of the Minister for a period of not more than five years and shall be eligible for reappointment.

(2) The Governor appointed under subsection (1) shall be paid such remuneration, and be entitled to such other terms and conditions of employment as shall be specified in his letter of appointment and which may not be altered to his disadvantage during his term of office.

(3) The Governor shall be the Chief Executive Officer of the Reserve Bank and shall be responsible to the Board for the execution of its policy and the management of the Reserve Bank.

(4) Except as may otherwise be provided in this Act, the rules of the Board or in the resolutions of the Board, the Governor shall have the power to act, contract and sign instruments and documents, on behalf of the Reserve Bank.

(5) The Governor may with the approval of the Board, delegate any of his powers under this Act to the Deputy Governor, or to any other officer of the Reserve Bank.

(6) The Governor shall devote the whole of his professional services to the Bank and shall not while holding office, hold any other office, whether remunerated or not, without written permission of the Minister.

(7) Notwithstanding the provisions in the preceding, subsection and any other section in this Act, the Governor may -

(a) act as a nominee of the Reserve Bank;

(b) be a member of any Board, Committee or Commission established, by the Government or by or under any Act of Parliament;

(c) be a Governor, Director or member of the Board of any regional or international institution of which Vanuatu or the Reserve Bank is a member.

DEPUTY GOVERNOR

8B. (1)(a) The Deputy Governor shall be a person of recognised experience in financial matters and shall be appointed by the Governor after consultation with the Minister for a period of not more than five years and shall be eligible for reappointment.

(b) The Deputy Governor shall be appointed on such remuneration, terms and conditions which may not be altered to his disadvantage during his term of office.

(2) In the event of the absence or incapacity of the Governor from whatsoever cause arising, the Deputy Governor appointed under subsection (1) shall have and may exercise all powers and functions of the Governor under this Act."

AMENDMENT OF SECTION 9 OF THE PRINCIPAL ACT

8. Section 9 of the principal Act is amended as follows:-

(a) by the substitution for subsection (2) of that section of the following subsection:-

"(2) Two members of the Board, of whom one shall be the Governor or in his absence the Deputy Governor, shall form a quorum at any meeting and decisions shall be adopted by a simple majority of the votes of the members present except that in the event of an equality of votes the person presiding shall have and exercise a second casting vote."

(b) by the insertion after subsection (3) of that section of the following subsection:-

"(4) No act or proceeding of the Board shall be invalidated merely by reason of the existence of a vacancy or vacancies among the members.".

AMENDMENT OF SECTION 10 OF THE PRINCIPAL ACT

9. Section 10 of the principal Act is amended by the substitution for the word 'Board' of the word 'Governor'.

REPLACEMENT OF SECTION 11 OF THE PRINCIPAL ACT

10. Section 11 of the principal Act is repealed and the following section substituted therefor:-

"MEETINGS OF THE BOARD

11. The Board shall meet as often as the Governor may consider the business of the Bank may require but not less than four times a year."

AMENDMENT OF SECTION 21 OF THE PRINCIPAL ACT

11. Section 21 of the principal Act is amended by the addition after subsection (4) of that section the following subsection:-

"(5) A certificate signed by an officer of the Reserve Bank, who is duly authorized by the Governor, as to the genuineness or otherwise of any Vanuatu currency note or coin shall be conclusive evidence of such fact in any legal proceedings in Vanuatu."

AMENDMENT OF SECTION 28 OF THE PRINCIPAL ACT

12. Section 28 of the principal Act is amended in paragraph (d)(iv) of that section, by the substitution for the words 'subject to the provisions of section 39; or' of the word 'or'.

AMENDMENT OF SECTION 35 OF THE PRINCIPAL ACT

13. Section 35 of the principal Act as amended is further amended by the insertion after subsection (8) of that section, of the following subsection:-

"(8A) By notice published in the Vanuatu Gazette and also by written notice to the principal place of business in Vanuatu of each financial institution affected thereby, the Reserve Bank may specify in respect of any or all financial institutions either the minimum or the maximum, or both the minimum and maximum commissions, margins, service charges and fees of any nature whatsoever which may be levied on any class of transaction by these financial institutions either with their customers, or the public, or with both the customers and the public."

AMENDMENT OF SECTION 36 OF THE PRINCIPAL ACT

14. Section 36 of the principal Act is amended in paragraph (h) of subsection (1) of that section, by the addition immediately after that paragraph of the following:-

"Any person who -

(i) fails to comply with a request for information under this paragraph; or

(ii) knowingly supplies any information, under this paragraph that is incomplete or false in any material particular; or

(iii) fails to furnish, within the time specified by the Reserve Bank, any information or documents requested by the Reserve Bank under this paragraph, shall be guilty of an offence; and shall be liable on conviction -

in respect of an offence under paragraph (i) thereof, to a fine not exceeding VT 1,000,000; or

in respect of an offence under paragraph (ii) thereof, to a fine not exceeding VT 1,000,000; or

in respect of an offence, under paragraph (iii) thereof, to a fine not exceeding VT.1,000,000."

AMENDMENT OF SECTION 38 OF THE PRINCIPAL ACT

15. Section 38 of the principal Act is amended by the addition after subsection (3) of that section of the following subsection:-

"(4) Notwithstanding anything to the contrary in any provisions of this Act, the Reserve Bank may purchase or acquire or hold on its behalf Government notes, bills, securities or other evidences of debt in amounts not greater than the sum of the liabilities represented by the credit balances of financial institutions and statutory corporations in its books."

AMENDMENT OF SECTION 39 OF THE PRINCIPAL ACT

16. Section 39 of the principal Act is amended as follows:-

(a) by the repeal of subsections (1) and (2) of that section and the substitution of the following subsections:-

"(1) Except in accordance with this section and sections 28, 37 and 38 the Reserve Bank shall not, directly or indirectly make advances to the Government or acquire the notes, bill, securities or other evidence of debt of, or guaranteed by the Government:

Provided that this section shall not operate to prevent the acquisition by the Reserve Bank of securities in accordance with section 5(4) and section 26(2) or its making advances in accordance with section 28(d)(iv) and section 38(3) or its making purchases in accordance with section 38(4).

(2) The total amount of outstanding advances made by the Reserve Bank to the Government and the holdings by the Reserve Bank of notes, bills, securities or other evidence of debt of, or guaranteed by, the Government exclusive of the holdings pursuant to section 5(4), section 26(2), section 28(d)(v), section 38(3) and section 38(4) shall at no time exceed twenty percent of the average annual ordinary revenue of the Government as determined in subsection (3) except as provided in subsection (5)."

(b) in subsection (5) of that section, in the proviso thereto, by the substitution for the word 'twenty' of the word 'thirty'.

COMMENCEMENT

17. This Act shall come into operation on the date of its publication in the Gazette.

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