New Amendments Prohibit Use of "Misleading Names"

Members of the National Assembly last Thursday 9th July 2009, repealed the Financial Institutions Act 2003, and enacted the Banking Bill 2009, making provisions for the regulation of banking institutions, including Islamic banking in the country.

The move, which was unanimously supported by members of the National Assembly now paves the way for the prohibition of the use of names that 'resemble or that can mislead' people with an existing bank in the country.

Under the new provision, no banking institution shall be issued a licence under a name which so closely resembles the name of an existing institution or in the opinion of the Central Bank of The Gambia, mislead or is likely to mislead the public.

Tabled before the deputies by the Minister of Finance and Economic Affairs, Mr. Abdou Colley, the new provision also under Section 14 seeks to enable banks and others investors to invest in Shariah compliance government instruments, which the Central Bank has introduced on behalf of the government of The Gambia.

"This will now allow banks to invest in such instruments as may be issued from time to time by the Central Bank or any other reputable institution subject to compliance with Shariah principles.

"Banking laws and regulations enhances safety, soundness and confidence in the banking system", the Minister of Finance and Economic Affairs told National Assembly Members.

According to him, the dynamic nature of banking requires that supervisors periodically review the legal framework to evaluate the relevance of existing requirements, as well as determine the need to add new solutions. In essence, he added, reviews are essential to continually reinforce the powers of the Central Bank of the Gambia to effectively regulate and supervise the banking system.

Section 25 of the new provision also requires that "audit reports of banks be sent to the Central Bank of The Gambia as supervisory authority to ensure that things are being done properly instead of bank shareholders and directors only".

The Central Bank of The Gambia also proposes in the new provision that people who were involved in the management of a bank that has been declared bankrupt or that has failed due to their management be disqualified. This, according to the Finance and Economic Affairs Minister, is aimed at safeguarding depositors' interest.