Art. 1

Coming into effect

This Law may be cited as the FINANCIAL INSTITUTIONS LAW 1989 and shall come into force on the date of its publication in the Official Bulletin.

Art 2

Definitions

In this Law, unless the context otherwise requires:

a)         "banking business" means: i) the business of receiving funds from the public or from members thereof through the acceptance of money deposits payable upon demand or after a fixed period or after notice, or any similar operation through the frequent sale or placement of bonds, certificates, notes or other securities, or ii) the business of making loans or investment for the account and at the risk of the person doing such business; and; iii) any other activity recognized as customary banking practice which a financial institution engaging in the activities described in i) and/or ii) may additionally be authorized to do by the Central Bank;

b)         "Bank" means any financial institution engaging simultaneously in the activities described in (a) (i) and (a) (ii). Included the acceptance of deposits subject to transfer by cheque or other third party payment order;

c)         "Central Bank" means the Central Bank of Somalia;

d)       "Credit institution" means any financial institution engaging simultaneously in the activities described in (a) (i) and (a) (ii), but whose operations do not include the acceptance of deposits subject to transfer by cheque or other third party payment order;

e)       "Specialized financial institution" means any financial institution engaging solely in the activities described in (a) (i) or in those described in (a) (ii);

f)        "Financial institution" means any person doing banking business: Provided, that for the purpose of this law, unless the context otherwise requires, all offices and branches of a financial institution in Somalia shall be deemed to be one financial institution;

g)       "Foreign financial institution" means a financial institution, organized abroad, doing business in Somalia, whether such business be banking or other business;

H       "Somalia" means the Somali Democratic Republic;

i)        "Licensed financial institution" means a financial institution licensed under the provisions of this law;

j)        "Local financial institution" means a financial institution organized .under the law of Somalia;

k)       "Member of the board of directors" means:

(i)       in relations to a local financial institution, any individual by whatever name he be called, carrying out or empowered to carry out substantially the same functions in relation to the direction to the financial institution as those carried out by a member of the board of directors of a corporation organized under the law of Somalia;      .

in relation to a foreign financial institution, both a member of the board as

Defined above and the person in Somalia responsible for carrying out the functions of such foreign financial institution;

l)        "Minister" means the Minister responsible for financial matters;

m)      "Person" includes any company, partnership, associations or body of persons corporate or unincorporated;

n)      "Place of business" means any branch or office of a financial institution in Somalia, including a mobile office open to the public;

0)       "unsecured" in relation to advances or credit facilities means advances or credit facilities granted without security, or in case of advances and credit facilities granted against security, any part of such advances and credit facilities which at any given time exceeds the market value of the assets comprising the security given, or which exceeds the valuation approved by tile Central Bank whenever it deems that no ascertainable market value exists for the said assets.