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21 1989

TRUSTEE SAVINGS BANKS ACT, 1989

PART II

Establishment and Licensing of Trustee Savings Banks

Trustee savings bank”.

9. —(1) In this Act “trustee savings bank” means a society formed for the purpose of establishing and maintaining an institution in the nature of a bank conforming to the provisions of this Act—

(a) whose business is managed and administered under the supervision of trustees in accordance with those provisions, and

(b) that carries on, in pursuance of a licence and in accordance with those provisions and rules made by its trustees and subject to the general supervision of the Central Bank, any one or more of the following:

(i) the business of accepting deposits payable on demand or on notice or at a fixed or determinable future date,

(ii) the business normally carried on by a former bank,

(iii) the business of providing, with the consent of the Central Bank, any other financial service.

(2) A trustee savings bank may, with the consent of the Central Bank, carry on business outside the State.

(3) In the exercise of any of its functions under this Act the Central Bank shall not be required to treat assets or liabilities of trustee savings banks outside the State as if they were held in the State.

Licences.

10. —(1) Subject to the provisions of this Act, the Central Bank may, on application to it in that behalf by the trustees of the society concerned, grant or refuse to grant to them a licence authorising them to establish, maintain, and carry on the business of, a trustee savings bank (in this Act referred to as “a licence”).

(2) The Central Bank shall not refuse to grant a licence without the consent of the Minister and unless it is satisfied that the grant of the licence would not be in the interest of the orderly and proper regulation of trustee savings banks or that there is not compliance with this Act as respects the institution, or the trustees, concerned and the Minister shall not grant his consent to the refusal unless he is satisfied that the grant of the licence would not be in the interest of the orderly and proper regulation of trustee savings banks or that there is not compliance with this Act as respects the institution, or the trustees, concerned.

(3) Whenever the Central Bank proposes to refuse to grant a licence to the trustees of a society—

(a) it shall notify them in writing of its intention to seek the consent of the Minister to the refusal and of its reasons for the refusal and that they may, within 21 days of the giving of the notification, make representations in writing to the Minister in relation to the proposed refusal,

(b) the trustees may make such representations to the Minister within the time aforesaid, and

(c) the Minister shall, before deciding whether to give or withhold his consent to the proposed refusal, consider any representations duly made to him under this subsection.

(4) (a) Subject to paragraph (b) of this subsection, the Central Bank shall, not later than 6 months after the receipt of an application therefor, either grant the licence or give a notification under subsection (3) (a) to the persons who made the application.

(b) Paragraph (a) shall have effect in relation to a case where, pursuant to subsection (6), the Central Bank requests the persons concerned to furnish information in relation to an application for a licence as if the reference to the receipt of an application were a reference to the furnishing of the information.

(5) An application for a licence shall be in such form and contain information in relation to such matters as the Central Bank may specify.

(6) The Central Bank may, following the receipt by it of an application for a licence, request the persons concerned in writing to furnish information to it in relation to specified matters and the persons shall comply with the request.

(7) Where, immediately before the commencement of this section, a former bank was carrying on business, the Central Bank shall, upon application therefor by its trustees, grant to them, as soon as may be thereafter, a licence in respect of its business and the licence shall have, and be deemed to have had, effect as on and from such commencement.

(8) The grant of a licence shall not constitute a warranty as to the solvency of the institution concerned and the Central Bank shall not be liable in respect of any losses incurred through the insolvency or default of a person to whom a licence is granted or the trustee savings bank in respect of which it is granted.

(9) The Central Bank may amend a licence by inserting therein or deleting therefrom, as appropriate, the names of trustees of the trustee savings bank concerned.

Prohibition on carrying on of business of a trustee savings bank without a licence.

11. —(1) A person, other than a person authorised so to do by a licence, shall not, on his own behalf or on behalf of any other person in or outside the State, carry on the business of a trustee savings bank or hold himself out or represent himself as carrying on such a business.

(2) For the purposes of this section, a person shall be deemed to hold himself out as carrying on the business of a trustee savings bank if he does an act specified in section 14 (2).

(3) A person who contravenes this section shall be guilty of an offence.

Conditions of licences.

12. —(1) Subject to subsection (2), a licence shall be subject to such conditions, if any, as the Central Bank may impose and specify at the time of the grant thereof, being conditions that in the opinion of the Bank are calculated to promote the proper and orderly regulation of trustee savings banks.

(2) The conditions of a licence may be amended, revoked or added to, and conditions may be imposed in relation to a licence, from time to time by the Central Bank if, in the opinion of the Central Bank, the amendment, revocation, addition or imposition is calculated to promote the orderly and proper regulation of trustee savings banks.

(3) Whenever the Central Bank proposes to impose a condition in relation to a licence or to amend or add to the conditions of a licence—

(a) it shall notify in writing the persons who hold the licence or to whom the licence is intended to be granted of its intention to impose the condition or to amend or add to the conditions of the licence, as the case may be, and of its reasons for so doing and that they may, within 21 days of the giving of the notification, make representations in writing to the Central Bank in relation to the imposition, amendment or addition, as the case may be,

(b) the persons may make such representations to the Central Bank within the times aforesaid,

(c) the Central Bank shall, before deciding to impose the condition or amend or add to the conditions of the licence, consider any representations duly made to it under this subsection, and

(d) if any representations are duly made to the Central Bank under this subsection, it may, upon the expiration of the period of 21 days aforesaid, withdraw the proposal aforesaid or impose such a condition or effect such amendments of or additions to the conditions of the licence as, having regard to the representations, the Central Bank considers appropriate subject only to the proviso that the action taken by the Central Bank shall not be such as to render compliance with the conditions of the licence more onerous than it would have been if the conditions of the licence had been those contained in the licence at the time of the giving of the notification under paragraph (a) as amended or added to or otherwise affected in accordance with the notification.

(4) A person who fails or refuses to comply with a condition of a licence shall be guilty of an offence.

Revocation of licences.

13. —(1) The Central Bank may, with the consent of the Minister, revoke a licence—

(a) if the holders of the licence so request,

(b) if the institution concerned has not commenced to carry on the business authorised by the licence within 12 months of the date on which the licence was granted,

(c) if the trustee savings bank concerned is being wound up,

(d) if the trustee savings bank becomes unable to meet its obligations to its creditors or suspends payments lawfully due by it or, in the opinion of the Central Bank—

(i) no longer possesses funds that are sufficient for the purposes of the business aforesaid, or

(ii) can no longer be relied upon to fulfil its obligations to its creditors, including the repayment of deposits held by it and the payment of interest thereon,

(e) if the trustee savings bank is convicted on indictment of an offence under this Act or is convicted of an offence involving fraud or dishonesty,

(f) if, since the grant of the licence, the circumstances relevant to the grant have changed and are such that, if an application for the grant of a licence were made in the changed circumstances, the grant thereof would be refused,

(g) if the Central Bank is not satisfied that the circumstances of the trustee savings bank are such that the bank is capable of repaying deposits accepted by it and paying any interest due to the depositors thereon in accordance with the terms of the deposits,

(h) if the trustees or the trustee savings bank fail to comply with a direction of the Central Bank under this Act,

(i) if there is not compliance with this Act as respects the trustees or the trustee savings bank, or

(j) if the trustee savings bank has ceased to carry on the business authorised by the licence and has not carried it on during a period of more than 6 months immediately following the cesser.

(2) Whenever the Central Bank proposes to revoke a licence (other than in pursuance of a request by the holders thereof to do so)—

(a) it shall notify the holders in writing that it intends to seek the consent of the Minister to the revocation and of the reasons therefor and that the holders may, within 21 days after the date of the giving of the notification, make representations in writing to the Minister in relation to the proposed revocation,

(b) the holder may make such representations as aforesaid to the Minister within the time aforesaid, and

(c) the Minister shall, before deciding to grant or withhold his consent to the revocation, consider any representations duly made to him under this subsection.

(3) Where a licence is revoked and the trustee savings bank concerned is not wound up—

(a) the bank shall continue to be liable in respect of deposits accepted by it until any liabilities in respect of them have been discharged to the satisfaction of the Central Bank,

(b) upon the discharge of the liabilities aforesaid, the bank shall be closed in accordance with section 42 , and

(c) the trustees of the bank shall discharge all their liabilities to their depositors in full and without undue delay and shall notify the Central Bank and the depositors with the bank, in such manner and within such time as may be determined by the Central Bank, of the action they are taking to do so.

(4) Where a licence is revoked and the trustee savings bank concerned is being wound up, the liquidator of the bank may carry on the business of the bank to such extent as the Central Bank or, if the winding up is pursuant to an order of the Court, the Court may consider necessary to enable the liquidator to discharge his functions.

(5) A person who contravenes subsection (3) (c) shall be guilty of an offence.

Name of trustee savings bank.

14. —(1) The phrase “trustee savings bank” or the phrase “savings bank” shall, unless the Central Bank consents to its omission, be included in the name of a trustee savings bank.

(2) A person other than a trustee savings bank—

(a) if he is a body corporate, shall not include in the name of the body either of the phrases aforesaid or any phrase that is a variant, derivative or translation of or is analogous to either of those phrases,

(b) if he is an individual carrying on a business under a name or title (other than his own name without any addition thereto), shall not include in the name or title either of the phrases aforesaid or any phrase that is a variant, derivative or translation of or is analogous to either of those phrases,

(c) if he is an unincorporated body of persons carrying on a business, shall not include in the name under which the body carries on business (not being, in the case of a partnership, the name or names of one or more of the partners without any addition thereto) either of the phrases aforesaid or any phrase that is a variant, derivative or translation of or is analogous to either of those phrases,

(d) shall not use, in an advertisement, circular, business card or other document either of the phrases aforesaid or any phrase that is a variant, derivative or translation of either of those phrases if by doing so he would hold himself out or represent himself as being a trustee savings bank.

(3) A person who contravenes subsection (2) shall be guilty of an offence.

Lending and borrowing by trustee savings bank.

15. —(1) The rates of interest charged by a trustee savings bank on loans provided by it and paid by it on deposits accepted by it shall be fixed in such manner and by reference to such matters as the Central Bank may determine.

(2) (a) A trustee savings bank may borrow money including, with the consent of the Central Bank, money in a currency other than the currency of the State.

(b) The Central Bank may if it so thinks fit specify in a direction given to a trustee savings bank—

(i) the maximum liability which may be incurred by the bank in respect of borrowings by it and interest on such borrowings, and

(ii) the maximum liability which may be incurred by the bank in relation to any one person in respect of borrowings by it and interest on such borrowings, and

(iii) the terms and conditions upon which the bank may borrow money (including terms or conditions specifying or providing for the determination of the rate of interest payable on moneys borrowed by it and the security to be provided by it in respect of its borrowings).

(3) A trustee savings bank shall not carry on any business other than the taking of deposits and any other business carried on by a former bank without the consent of the Central Bank.

(4) A person who contravenes subsection (3) or fails or refuses to comply with a direction under subsection (2) shall be guilty of an offence.

Rules of trustee savings bank.

16.—(1) (a) (i) The trustees of a trustee savings bank shall before the bank commences to carry on business or, in the case of a trustee savings bank that immediately before the commencement of this section was a former bank, not later than 6 months after such commencement make rules (which shall be subject to the approval of the Central Bank) for the management and administration of the bank and for such other matters relating to the bank as it considers appropriate.

(ii) The trustees of a trustee savings bank may, subject to the approval of the Central Bank, by rules under subparagraph (i), amend or revoke rules under that subparagraph.

(b) The Central Bank shall—

(i) as respects proposed rules under paragraph (a) (i), approve of the rules if it is satisfied that they are in accordance with sound banking practice, make provision for all of the matters for which, in the opinion of the Central Bank, provision ought to be made by the rules and are in conformity with the law (including this Act),

(ii) as respects proposed rules under paragraph (a) (ii), approve of the rules if it is satisfied that they, together with the rules that would be in force following the proposed amendment or revocation, satisfy the conditions specified in subparagraph (i).

(c) Without prejudice to the generality of paragraph (a), rules under that paragraph shall make provision in relation to the matters for the time being standing specified in the Second Schedule .

(2) The Minister may by regulations, made after consultation with the Central Bank and the trustee savings banks for the time being carrying on business, amend the Second Schedule and that Schedule shall have effect subject to any regulations under this subsection for the time being in force.

(3) The following provisions shall have effect in relation to rules under this section of a trustee savings bank:

(a) the trustees, managers and other officers of the bank shall comply with the rules and the business of the bank shall be carried on in accordance with the rules,

(b) a copy of the rules shall be given to a depositor of the bank on request at any office of the bank,

(c) a copy of the rules shall be made available for inspection by depositors of the bank at each office of the bank during the times at which the bank is open to the public for business,

(d) in proceedings in any court or tribunal, production of a document purporting to be a copy of the rules and to be certified by an officer of the bank to be a true copy of the rules shall be evidence of the rules unless the contrary is shown.

(4) A person who contravenes subsection (3) (a) shall be guilty of an offence.

(5) Rules of a former bank in force immediately before the commencement of this section shall continue in force for the period of 6 months immediately after such commencement and may be amended or revoked during that period by the trustees of the trustee savings bank concerned as if made pursuant to this section and shall, during the said period, be deemed to comply with the provisions of this Act.