FINANCIAL INSTITUTIONS ACT, 2004

SCHEDULE 3

Section 66(3)

SEIZURE BY THE CENTRAL BANK

Central Bank taking possession

1. (1) The Central Bank may take possession of any financial institution –

(a) whose minimum required capital in terms of section 23 is impaired or whose condition is otherwise unsound;

(b) whose business is, in the opinion of the Central Bank, being conducted in an unlawful or imprudent manner;

(c) where the continuation of its activities is, in the opinion of the Central Bank, detrimental to the interests of its depositors;

(d) which refuses to submit itself to or otherwise obstructs any inspection by the Central Bank under section 42 of this Act or section 36 of the Central Bank of Seychelles Act;

(e) whose banking licence has been revoked under section 13(1), notwithstanding section 13(2) to (5) or any appeal or right to appeal under section 16.

(2) When taking possession of a financial institution under subparagraph (1), the Central Bank shall post on the premises of the institution a notice announcing its action under this Schedule, and the time when its possession is deemed to take effect, which shall not be earlier than the posting of the notice.

(3) Copies of a notice posted under subparagraph (2) shall be –

(a) given by the Central Bank to the Supreme Court and to the Registrar of Companies; and

(b) published immediately in the Gazette and in a local newspaper; and

(c) in the case of a foreign financial institution, sent by the Central Bank to the head office of the institution.

Consequences of seizure

2. Notwithstanding the Civil Code or any other rule of law to the contrary, where the Central Bank takes possession of a financial institution under this Schedule –

(a) any period, whether statutory, contractual or otherwise, on the expiration of which a claim or right of the financial institution would expire or be extinguished on or after the seizure, shall be extended so that it does not expire or is not extinguished while possession by the Central Bank under this Schedule continues;

(b) any attachment or lien on the property or assets of the financial institution in Seychelles (except a lien existing 6 months prior to the seizure of the financial institution under this Schedule) shall cease to have effect;

(c) no attachment or lien (except a lien created by the Central Bank in the application of this Schedule), shall attach to any property or assets of the financial institution in Seychelles so long as possession by the Central Bank under this Schedule continues; and

(d) any transfer of any assets in Seychelles of the financial institution made within 6 months prior to the seizure of the financial institution shall be null and void unless the financial institution satisfies the Central Bank that the transfer was not made with the intent to effect a preference.

Management by Central Bank

3. (1) Where the Central Bank takes possession of a financial institution under this Schedule, subject to subparagraph (2), there is vested in the Central Bank the full and exclusive power of management and control of the affairs of the financial institution, including, without prejudice to this generality, the power –

(a) to continue or discontinue its operations as a financial institution (notwithstanding that its banking licence has been revoked);

(b) wholly or partially to suspend, limit or stop the payment of its obligations;

(c) to employ any necessary staff;

(d) to execute any instrument in the name of the financial institution;

(e) to initiate, defend and conduct in its own name any action or any proceedings to which the financial institution may be a party;

(f) to reorganise, wind up or close down the financial institution in accordance with this Act.

(2) In the case of a foreign financial institution the power vested in the Central Bank under subparagraph (1) applies to –

(a) the operation of the financial institution in and with respect to Seychelles; and

(b) the assets and liabilities whether in or outside Seychelles of the financial institution pertaining to any branch of the financial institution in Seychelles.

(3) As soon as possible after taking possession of a financial institution the Central Bank shall make an inventory of the assets of the institution and shall transmit a copy of that inventory to the Supreme Court.

(4) The copy of the inventory transmitted to the Supreme Court under subparagraph (3) shall be available for examination by any interested person at such place and such time as the Court directs.

Appeal

4. The financial institution may, within 21 days of the Central Bank taking possession under this Schedule, apply to the Supreme Court to have the seizure lifted.

Further action by Central Bank

5. (1) Within a maximum period of 30 days from taking possession under this Schedule, the Central Bank shall –

(a) start the reorganisation of the financial institution under Schedule 4 (in which case the seizure under this Schedule remains effective until terminated under paragraph 7 of Schedule 4); or

(b) revoke the banking licence of the financial institution and –

(i) in the case of a local financial institution, start the compulsory winding up of that institution under Schedule 2; or

(ii) in the case of a foreign financial institution, close that institution under paragraph 2(2) of Schedule 5; or

(c) terminate the seizure and return full management, control and possession to the institution.

(2) Where the Central Bank terminates a seizure under subparagraph (l)(c) –

(a) it may take action under section 53 (Central Bank’s powers over unsafe practices);

(b) it shall immediately give notice of the termination –

(i) to the Supreme Court and the Registrar of Companies;

(ii) in the Gazette and in a local newspaper; and

(iii) i n the case of a foreign financial institution, to its head office.

(3) Section 13(2) to (5) (taking effect of revocation) and section 16 (appeals against revocation) do not apply to the revocation of a banking licence under subparagraph (1)(b).