Laws

No.550-XIII of 07.21.95

The Law is based on a model provided by the IMF and provides a reasonable basis for banking operations. The Law defines the business of banking, establishes conditions for bank licensing and ownership and provides rules that s bank must meet to remain a sound institution.

However the Law does not clearly establish the ultimate responsibility of the board to set and enforce prudent policies for bank’s risk exposure and risk management, for protection of the bank against internal fraud, to maintain adequate level of capitalization and to ensure that management is capable and effectively discharges the responsibility for day-to-day operations of the bank.

The Law provides for various types of sanctions for violations of laws attached to an authorization, a breach of fiduciary duty, unsafe and unsound banking practices, and corrective actions for capital deficiencies.