Art. 20

Auditing of financial institutions

1. Every financial institution shall appoint annually an auditor, who shall be a professionally qualified person satisfactory to the Central Bank, whose duties shall be to make a report to the shareholders of each such institution incorporated under the (Corporation Law), to the owners of each such other local financial institution, and to the head office abroad of each foreign financial institution upon the annual balance sheet and accounts, and in every such report he shall state whether in his opinion the balance sheet and profit an loss account are full and fair and properly drawn up, whether they exhibit a true and correct statement of the institution's affairs and, if the auditor has called for explanation or information from the officers or agents of the institution, whether such is satisfactory

2. The report of the auditor shall be read together with the report of the board of directors of the financial institution at the annual meeting of shareholders or other owners of each local financial institution and shall be transmitted to the head office of each foreign financial institution. A copy of it shall be sent to the Central Bank:

3 If a financial institution fails, to appoint an auditor satisfactory to the Central Bank, the Central Bank shall have the power to appoint such an auditor. The remuneration of the auditor, whether appointed by the institution or by the Central Bank, shall be paid by the institution and, in the case of an auditor appointed by the Central Bank, shall be determined by the Central Bank, in accordance with prevailing rates for such services in Somalia.

4. No person having an interest in any financial institution otherwise than as a depositor and no director, officer, employee, or agent of a financial institution shall be eligible for appointment as auditor for such institution. Any person appointed as auditor who shall, after such appointment, acquire any interest or become a director, officer, employee or agent of such institution shall forthwith case to be the auditor.

Art. 21

Examination of financial institutions

1. The Central Bank, from time to time, shall cause an examination to be made of each financial institution whenever in its judgment such examination is necessary or expedient in order to determine that the institution is in a sound financial condition and that the requirements of law have been complied with in the conduct of its business.

2. For the purpose of determining the condition of a financial institution and its compliance with this Law, the Central Bank may at any time cause an examination to be made of any of its affiliates in Somalia to the same extent that an examination may be made of the institution;

3. All expanses of, and incidentals to, an examination shall be paid by the Central Bank.

Art. 22

Information for inspections

1. Every financial institution shall produce for the inspection of any examiner appointed by the Central Bank at such times as the examiner specifies, all books, minutes, accounts, cash, securities, documents and vouchers relating to its business in Somalia and shall supply all information concerning its business in Somalia as may reasonably be required by the examiner within such time as the examiner specifies.

2. If any books, minutes, accounts, cash, securities, documents and vouchers are not produced or information not supplied in accordance with sub-section (1), the defaulting institution or affiliate or both shall be guilty of an offense and shall be liable on conviction in a court of law to a fine not exceeding (50.000 Somali Shillings) in respect of every day during which the default continues. If any information supplied or item produced is false in any material particular, the institution or affiliate or both shall be guilty of an offense and shall be 1iable on conviction in a court of law to a fine not exceeding (500,000 Somali Shillings).

3. A conviction of the defaulting institution or its affiliate under sub-section (2) shall not preclude a conviction of a person under Articles 29 or 30.

Art. 23

Suspension of license, liquidation, reorganization

If in the opinion of the Central Bank an examination authorizer under Articles 21 (1) shows that the financial institution concerned is conducting its business in an unlawful or unsound manner or its capital or Reserve Account is impaired or it is otherwise in an unsound condition, the Central Bank may:

require that such institution forthwith take such measures as the Central Bank may consider necessary to rectify the matter; and

b) with the approval of the Minister:

i) appoint a person who in its opinion has had proper training and experience to advise the institution on the steps to be taken to rectify the matter, and shall fix his remuneration which shall be paid by the institution; or

ii) suspend the license granted or issued under this Law for a period not exceeding six months. During such period the Central Bank shall exercise supervision over the safeguarding of the institution's funds, documents and records in such manner as it deems fit to safeguard the interests its creditors; or

iii) take possession of the financial institution and commence proceedings leading to its compulsory liquidation or reorganization in accordance with the provisions of the laws of Somalia.

Art. 24

Information to the Central Bank

The Central Bank may from time to time call for any information which it may require for the purpose of this Law from any financial institution about its operations, and those of its affiliates, in Somalia or from a local financial institution about its operations and those of its affiliates abroad.

Art. 25

Information on credit

The Central Bank may require financial institutions to furnish it periodically with a statement of all credits granted to customers in excess of a sum to be prescribed by regulation and the extent of their utilization during the month. The Central Bank may communicate to the financial institutions, which have notified a credit or any application for credit in the name of a customer the overall amounts of credits opened and utilized by him during the period.

Art. 26

Extension of periods for information

At the request of a financial institution, the Central Bank may, in its discretion, extend from time to time any period within which such financial institution is, in accordance with the provisions of this Law, obliged to furnish any document or information.