CENTRAL BANK OF SEYCHELLES ACT, 2004

(Act 12 of 2004)

PART VII – RELATIONS WITH BANKS AND OTHER FINANCIAL INSTITUTIONS

29. The Bank may, on such terms and conditions as the Board may determine –

(a) open accounts for, and accept deposits from banks and other financial institutions;

(b) make loans, advances and rediscounts to banks and other financial institutions in Seychelles for periods not exceeding 180 days.

30. The Bank may establish or assist banks in establishing facilities for the clearing and settlement of payments, including payments by cheques and other payment instruments, and may issue such directions relating thereto as it deems appropriate.

31. (1) The Bank may, by written notice to each bank or other financial institution at its principal place of business in Seychelles, require the maintenance of such reserves against deposits and other similar liabilities as may be specified in the notice.

(2) The reserves required under subsection (1) shall be maintained by way of cash holdings or deposits with the Bank in such proportions as the Bank may specify.

(3) The Bank may, if it deems necessary, require secondary reserves to be maintained in such forms and in such proportions as may be specified.

(4) The Bank may require the maintenance of different reserve ratios for different classes of deposit and other similar liabilities and may lay down the method of their computation:

Provided that —

(a) the Bank shall not, unless the monetary situation so requires, require banks and other financial institutions to hold a total amount of reserves in excess of 40 per cent of the total deposit and other similar liabilities to which reserve ratios are applicable;

(b) the initial requirement of, or any increase in, the reserve ratios shall take effect after a period of not less than 15 days after the date of notice;

(c) the Bank may treat the requirements of this subsection as satisfied if the required reserve ratios are maintained on the basis of averages of holdings over such period as the Bank may notify; and

(d) the required reserve ratios shall be uniform for each class of bank and other financial institution in Seychelles.

(5) The Bank may impose on any bank or other financial institution which fails to maintain required reserves in the appropriate ratio as notified under this section a charge of interest on the amount of deficiency of reserve at a rate determined by the Bank not exceeding twice the highest effective rate of interest charged by that bank or other financial institution as the case may be from any of its customers during the period of such failure.

(6) The charge of interest mentioned in subsection (5) shall be imposed for each day on which the deficiency occurs.