ACT NO. 23 OF 1973
[Date of Assent: 25th April 1974]
[Date of Commencement: 1 September, 1974]
To provide for control of various financial institutions. Enacted by the Assembly
PART I-INTRODUCIORY PROVISIONS
1. This Act may be cited as the Financial Institutions Act 1973 and shall come into operation on a day appointed by the Minister in the Gazette.
2. In this Act, unless the context otherwise requires- "affiliate", in respect of any financial institution means-
(a) any company, association, syndicate, partnership or other body of persons corporate or unincorporate in which twenty-five per cent or more of any class of voting shares or other voting participation is directly or indirectly owned or controlled by such financial institution, or is held by it with power to vote; or
(b) any company, association, syndicate, partnership or other body of persons corporate or unincorporate in which the election of a majority of directors is controlled in any manner by such financial institutlon;
"bank" means any financial institution whose operations include the acceptance of deposits subject to withdrawal or transfer by cheque;
"banking business" means 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 sale or placement of bonds, certificates, notes or other securities, and the use of such funds either in whole or in part for loans, investments or any other operation authorised either by law or by customary banking practices, for the account and at the risk of the person doing such business;
"company" shall have the meaning ascribed to it ln the Companies Act, No. 25 of 1967;
"court" in relation to any financial institution means the High Court of Lesotho and, in relation to any offence against this Act, includes a Subordinate Court having jurisdiction in respect of that offence;
"credit institution" meaIls any financial institution other than a bank;
"director"-
(a) in relation to a local financial institution, includes any person, by whatever title he may be referred to, carrying out or empowered to carry out substantially the same functions in relation to the direction of the financial institution as those carried out by a director of a company incorporated under the Companles Act, No. 25 of 1967;
(b) in relation to a foreign financial institution, includes both a director as defined above and the person in Lesotho responsible for carrying out the functions of such foreign financial institution;
"financial institution" means any person carrying on banking business:
Provided that for the purposes of thls Act, unless the context otherwise requires, all branches and offices of a foreign financial institution in Lesotho shall be deemed to be one financial institution;
"foreign financial institution" means a financial institution, incorporated or otherwise, other than a local financial insstution, doing business ln Lesotho, whether such business be banking or other business;
'licensed"-
(a) in relation to an agent, means licensed under the provisions of section 9;
(b) in relation to a financial institution, means licensed under the provisions of sections 8 or 12;
"local financial institution" means a financial institution organised under the laws of Lesotho;
"long-term liability" in relation to any date, means a liability (including a loan from or a deposit by another financial Institution) which is payable after the expiration of more than six months as from that date or which on that date is subject to notice which makes it payable after more than six months;
''medium-term liability" in relation to any date, means a liability (including a loan from or a deposit by another financial institution) which is payable on or after the thlrty-first day as from that date but not later than the day on which a period of six months as from that date expires, or which on that date is subject to notice which makes it payable on or after the thirty-first day as from that date but not later than the day on which a period of six months as from that date expires, and includes savings deposits;
"Minister" means the Minister for Finance;
"person" includes any company, partnership, syndicate, association or body of persons, corporate or unincorporate
"place of business" means any branch or office of a financial institution in Lesotho, lncluding a mobile agency, open to the public "Commissioner" means the Commissioner of Financial Institutions appointed under section 4, or any person acting in that capacity;
"short-term liability" in relation to any date, means a liability (including a loan from or a deposit by another financial institution) which is payable on or before the thirtieth day as from that date, or which on that date issubject to notice which makes it payable on or before the thirtieth day as from that date
"unsecured advances" or "unsecured credit facilities" means advances or credit facilities granted without security; or, in the 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 the Registrar whenever he deems that no market value exists for the said assets.
3. (1) The provisions of this Act shall apply to all financial institutions except-
(i) an institution undertaking exclusively insurance business in Lesotho; and
(ii) a co-operative society to which the provisions of the Co-operatives Societies Proclabation, No. 47 of 1948, as amended, applies:
Provided that nothing in this section contained shall be construed as exempting an agent of an institution referred to in this section from any provisions of this Act relating to an agent of such institution.
(2) The Minister may by notice in the Gazette exempt any class of credit institutions from all or part of the provisions of sections 16 (1) and (2), 17,18(1) (b) and (2),19, 22 and 24 for such period as he may determine whenever such exemption may be de~med by him to be in the public interest:
Provided that:-
(a) any such notice shall be laid before the Assembly as soon after the making thereof as possible and that, if it is disappraved by the Assembly, it shall cease to have effect after such reasonable period as the Minister may grant for the purpose of effecting compliance with the provisions of this Act; and
(b) such exemption shall not be granted for periods exceeding two years, but may be granted anew by determination of the Minister with notice as prescribed in paragraph (a) to the Assembly and in the Gazette.
(3) For the purposes of this Act "insurance business" shall have the meaning assigned thereto by section 2 of the Insurance Proclamation No. 65 of 1956.
PART II-ADMINISTRATION
4. (1) Subject to the law governing the public service-
(a) The Minister shall by notice in the Gazette appoint an officer, to be styled the Commissioner of Financial Institutions;
(b) The Minister may in addition appoint one or several Deputy Commissioners of Financial Instiutions;
(c) The Commissioner shall appoint such personnel and agents, as may be necessary.
(2) No person shall hold office under the provisions of this section if-
(a) he directly or indirectly owns any part of the ownership interest in, or, without the prior approval of the Minister, any obligation of, a financial institution;
(b) he is a director, manager, officer, employee or agent of a financial institution; or
(c) he has, during the year preceding his appointment or at any time during his tenure, directly or indirectly received any gift or accepted any credit on favoured terms or other undue advantage from a financial institution or secured such for another person.
5. (1) The Commissioner shall perform, under the control of, and subject to appeal to, the Minister, the functions assigned to him by law.
(2) A Deputy-Commissioner may, in the absence of the Commissioner or by way of delegation from him approved by the Minister, do anything which may lawfully be done by the Commissioner.
(3) The officers, employees and agents of the Commissioner's office shall perform the functions assigned to them by the Commissioner and exercise such authority as may be delegated by the Commissioner with the approval of the Minister.
6. (1) Except for the pulpose of the performance of his duties or the exercise of his functions or when lawfully required to do so by a competent court or under the provisions of any Act no Commissioner, Deputy-Commissioner, officer, employee, or agent of the Commissioner's office, including any examiner duly authorised by the Commissioner to examine the affairs of, or advise concerning, any person, shall disclose to any person any information relating to such office or to the affairs of any person. including any customer of a financial institution, which he has acquired in the performance of his duties or the exercise of his functions.
(2) Every person subject to subsection (1) shall, before acting in the execution of his office, take and subscribe before a Commissioner of Oaths such oath of fidelity or secrecy as may be prescribed by regulation.
(3) Every person who, in contravention of the true intent of the oath of fidelity or secrecy taken by him and without lawful excuse, reveals any matter which has come to his knowledge in his official capacity shall be guulty of an offence and shall be liable on conviction to imprisonment for a term not exceeding two years with or without hard labour, or to a fine not exceeding two thousand rand or to both such imprisonment and fine.
(4) If any person acts in the execution of his office before he has taken the prescribed oath he shall be guilty of an offence and shall be liable on conviction to a fine not exceeding twenty rand.
7. With respect to any licensed financial institution or agent and notwithstanding the provisions of section 6, the Commissioner shall disclose upon request-
(i) the nature of the licence;
(ii) any conditions and limitations attached to such licence;
(iii) the places where the holder of such licence may, according to his licence, carry on his activities;
(iv) the name of the person upon whom process may be served in lieu of the holder of such licence, when a certificate of designation has been filed with the Commissioner.
PART Ill-LICENCES
8. (1) No business shall be transacted, either in Lesotho by a foreign financial institution, or in Lesotho or abroad by a local financial institution, unless such financial institution has been licensed by the Commissioner under the terms of this Act.
(2) Subject to the provisions of subsection (3), no local financial institution shall be granted a licence under the terms of this Act unless it is incorporated as a public company under the Companies Act, No. 25 of 1967.
(3) (a) Any person who, immediately before the commencement of this Act, was carrying on banking business in Lesotho and who intends to continue to carry on such business, shall, within ninety days of the said commencement, apply to the Commissioner for a provisional licence.
(b) The Commissioner shall issue upon request to all persons carrying on banking business in Lesotho when this Act enters into force, a provisional licence for a term of one year from the aforesaid date.
(c) Before the expiration of the one year period any financial institution holding a provisional licence and desiring to carry on banking business in Lesotho shall apply for a licence under the provisions of section 12.
(d) Unless otherwise specified in this Act, or in its provisional licence, a financial institution holding such provisional licence shall be subject to the provisions of this Act.
(4) Any person proposing to engage in banking business after this Act has entered into force shall, before commencing such business, apply for a licence under the provisions of section 12.
(5) Any person who contravenes the provisions of subsection (1) shall be guilty of an offence and liable on conviction to a fine of three hundred rand in respect of each day on which the contravention continues.
9. (1) Any person, other than a licenced financial institution, proposing to act as agent of a financial, investment, or insurance institution, not licensed in Lesotho, who represents such institution, or undertakes any activity on its behalf, in Lesotho, other than in the course of a legal proceeding, shall, before engaging in such representation or activity, apply to the Commissioner for a licence under the terms of this section:
Provided that any person acting as agent of such institution when this Act enters into force, who holds a valid trading licence issued under the Trading Order, No. 20 of 1973, and has applied for a licence under this section not later than ninety days after this Act has entered into force, shall after such application be entitled to carry on his activities on a provisional basis until the Commissioner has informed him that a licence under this section has been either granted or refused to him.
(2) In applying for a licence, the applicant shall submit in writing to the Commissioner full particulars of-
(i) his authority;
(ii) the business he proposes to carry on; and
(iii) the manner in which, and the places where, he proposes to carry on such business.
(3) A licence granted under this section shall satisfy the provisions of item 2 of the Schedule to the Trading Order, No. 20 of 1973:
Provided that the licencee shall, upon the granting or renewal of such licence, pay to the Commissioner of Financial Institutions the licence fee for agents as prescribed in the Schedule to this Act.
(4) The term of the licence shall be limited to one year. The licence may be renewed upon application to the Commissioner and payment of the licence fee prescribed in the Schedule to this Act.
(5) The Commissioner may at his discretion refuse to grant or renew such licence.
(6) In granting or renewing a licence, the Commissioner may impose conditions to be satisfied by its holder and limitatlons on his activity.
(7) (a) The licence may be revoked at the discretion of the Commissioner in the event that its holder-
(i) exceeds the tenns of his licence;
(ii) comes under the provisions of section 36 (1); or
(iii) fails to comply with conditions or limitations imposed upon him under subsection (6) .
(b) Before revoking any licence, the Commissioner shall give the agent notice of his intention to do so, and shall afford him a reasonable opportunity to show cause why such licence should not be revoked:
Provided that in no circumstances shall a licence be revoked earlier than twenty-eight days after the notice of inntention is served on the agent; and Provided further that the Commissioner may obtain a temporary injunction upon application to a court for the suspension of any part or all of the business being conducted by the agent after the notice of intention has been served upon him. (c) When the Commissioner has revoked a licence under this section he shall as soon as possible publish notice of the revocation in the Gazette and take other means appropriately calculated to inform the public of such revocation, including, where possible, publication of notice of such revocation in a newspaper of general circulation in Lesotho. (8) Any person who contravenes the provisions of subsection (1) shall be guilty of an offence and liable on conviction to a fine not exceeding two thousand rand. 10. (1) No person other bhan a licensed financial institution, its agent, or an agent licensed under section 9, shall without the consent of the Commissioner, use the word "bank" or any of its derivatives in any language, or any other word indicating the transaction of banking business, in the name, description or title under which such person is transacting business in Lesotho, or make or continue to make any representation to such effect in any bill-head, letter-paper, notice, advertisement or in any other manner whatsoever for the purpose of transacting business in Lesotho. (2) Nothing m subsection (1) shall prevent a person from using the word "bank" or any of its derivatives in any language, when- (a) it is for the sole purpose of organising a company to the end of applying for a licence under the provisions of this Act; or (b) it is included in the title of a bank staff association ~r simil ar organisation. 11. (1) Whenever the Commissioner has reason to believe that any person is engaging in banking business or acting as an agent within the meaning of section 9 without a valid licence, he may, with the approval of the Minister, call for and examine the books, accounts and records of such person in order to ascertain whether such person is so acting. Any person refusing to make available for examination such books, accounts and records after having been duly requested to do so by the Commissioner shall be gullty of an offence and shall be liable on conviction to a fine not exceeding one thousand rand or to imprisonment for a term not exceeding one year, or to both such fine and imprisonment. (2) A person holding funds which he has obtained by carrying on banking business, or acting as an agent within the meaning of section 9, without being licensed as reqired by this Act, shall repay such funds in accordance with the Commissioner's directions. (3) Nothing in subsection (2) shall relieve any person from liability to crirninal proceedings arising out of any contravention of the provisions of this Act. 12. (1) In order to obtain a licence under this Act as a financial institution, the applicant shall apply in writing to the Commissioner and submit- (a) authenticated copies of its memorandum and article~ of association, or, in the case of a foreign financial institution which is not incorporated, such similar documents regulating its affairs; (b) a sta~tement of the address of its head office, and the name and address of its chairman, of every director, and of its principal officer; (c) a copy of its balance sheet as of a date within ninety days prior to the date of its application; (d) full parti~ulaIs of the ~usiness it proposes to carry on, and of the manner in which it proposes to carry on such business; (e) the location of the principal and other places of busl ness in Lesotho where it proposes to carry on its ac'dvities and, in the case of a mobile agency, the area to be served; and (f) such other information as the Commissioner may require. (2) The application and every document subn~itted in ac,cordance with subsection (1) shall be signed by the principal offlcer of the applicant. (3) The applicant shall- (a) pay to the Commissioner the investigation fee; and (b) deposit with the Commissioner the registration fee and the licence fee for the first year, as prescribed in the Schedule to this Act: Provided that such deposit shall be returned to the a~ plicant lf the licence has not been granted. (4) (a) ~ considering an application for a licence, the Commissioner shall conduct su~h investigation as mav be deemed necessary to ascertain the validity of the documents submitted under subsection (1 ), the financial status and history of the applicant, the c~aracter and e~cpe~ence of its management, the adequacy of its capital structure, the convenience and needs of the community it intends to serve, the earning prospects afforded by the area primarily to be served, the pro~ pective effect that the opening of a financial institution may have on existing financial institutions in the area primarily to be served, and the national interest. (b) A financial institution shall not be granted a licence unless it fulfills the requirements specified, either in section 18 (1 (a) if it is a bank, or in section 18 (1) (b~ if it is a credit institution: Pro~ided that a financial institution which ls ent~tled to a provisional licence under the provisions of section 8 (3) shall not be subject to the provisions of this paragraph during the term of such licence. (S) Within ninety days after the receipt of an application, or, where further information has been required, after the receipt of such information, the Commissioner shall either grand a licence or inform the applicant that he has refused to grant a licence. (6) In granting a licence, the Commissioner may impose con ditions t~ be satisfied by the licencee, including a condition that the licencee carry on business at a designated place or places, or prov~de or refrain from providing specified services or facilities. In the case of a foreign financial institution, without limiting the generality of the foregoing, the Commissioner shall require as a condition for the commencement of operations that there be ~led with him- (a) a duly executed instrument in writing, by its terms of indefinite duration and irrevocable, appointing the Commissioner its true and lawful agent, upon all process in any action or proceeding against it on a cause of action arising out of a transaction with its places of business in Lesotho, may be served with tlle same force and e~ect as if it were organised m Lesotho had been law fully served with process therein; and (b) a written certificate of designation, which may be changed from time to time thereafter by the filing of a new certificate of designation, specif~g the name and a ddress of the officer, agent, or other person in Lesotho - (i) to whom suc~ process shall be forwarded by the Commissioner; or (ii) upon whom any process not served upon the Commissioner under the provision of paragraph (a )may be served. (7) In refusing to grant a licence , the Commissione rshall furnish to the applicant a written statement of the reasons for his decision: Provided that if the Ministe rshall certify to the Commissioner that the granting of s uch licence is not in the national interest, no other reason for refusal need be furnished to the applicant. (8) A licence granted u nder this section shall satisfy the provisions of item 3 of the Schedule to the Trading Order, No. 20 of 1973: Provided that the licencee shal lpay to the Commissioner of Financial Institutions the lice nce fee for financial institutions as prescribed in the Schedule to this Ac t. 13. (1) The Commissioner may revoke the licence of any financial institution if the holder- (a) fails to commence operations withm a period of one year following the grant of the licence; (b) fa~ls bo comply wl~ the cond~tions o~ its licen~e or the measures requ~red by the Commissioner in accordance with section 33 (a); (c) i~ in breach of any other of the provisions of t~s Act; or (d) ceases to carry on the business for which he is licensed. (2) Before revoking the Licence of any financial ~stitu tion, the Commissioner shall give such institution notice of his intention to do so and shall afford it a reasonable opportunity to show cause why such licence should not be revoked: Provi~ed that in no event shall a licence be revoked ear1ier than bwenty-eight days after the notice of intention i8 served on the financial ~titution; and Provided further that the Commissioner may obtain a temporary injunction upon application to the court for the suspension of any part or all of the business being conducted by such ~titution after t~e notice of intention ~as been served upon it. (3) When the Commissioner has revoked a licence, he shall as soon as possible publish notice of the revocation in the Gazette and take other mean6 appropriately calculated to inform the public of such revocation, including where p~ssible, publication of the notice of revocation in a newspaper of general circulation In each of the places in which there is situated a place of business of the financial institution. 14. (1) No financial institution shall be granted or con'dnue to hold a licence under a name which so closely resembles the name of an elcisting institution as would be likely, in the opinio nof the Commissioner, to mislead the public. (2) Except w ith the written consent of the Commissioner, no financial ~nstltution shall use, or refer to itself by, a name ~her bhan the name under whlch it is licensed. 15. (1) Any licence g ranted under sections 8 or 12 shall au1~orise the llcencee to carry on business at the place or places designated in the licence. (2) No financlal institution shall open anew place o~ business in Lesotho, or change the locati on of, or close an existing p~ace af business in Lesot~o without the pri~r consent of the ~orr ~lissioner. Before granting consent, the Commissioner may iequ ire to be satisfied by inspection whether the new place of business, or the financial institution as relocated, will continue to meet the criteria, as applicable, of section 12 (4) (a). 1~. (1) All shares emlowed with voting rights, ~hich are Issued by a local financial institu~on, shall be in registered f~rm. (2) Without the prior approval of the Commissioner, no person may acquire either directly or indirectly any interest in the capital stock of a local financial institution which would confer upon him a voting share exceeding twenty per cent of the total. In considering any application for such approval, the Commissioner may call for such information as he may require. (3) Without the prior approval of the Commissioner, no local finan~ial institution shall- (a) enter into a merger or consolidation; (b) transfer the whole or any part of its assets in Le6otho other than in the ordinary course of its business; (c) effect an increase or reduction of its authorised share capital or a reduction of its paid-up capital; (d) alter its name as set out in its licence; or (e) amend its memorandum or articles of as~ociation. (4) Without the prior approval of the Commissioner, no foreign financial institution which is licensed under this Act shall (a) transfer the whole or any part of its assets in Lesotho other than in the ordinary course of its business; (b) effect a reduction of its assigned capital in Lesotho; or (c) alter its name as set out in its licence. PART IV-FINANCIAL REQUIREMENTS AND LIMITATIONS 17 (1) (a) Every financial ~stitution shall at all times m~tain unimpaired capital, either paid-up if it is a local financqal institution, or assigned if it is a foreign financial institution, at least equal to the ~imum amoullt specified either in section 18 (1) (a) (i) or in section 18 (1) (b) (i), as the case may be. (b) The assigned capital of a foreign financial ~nstitution shall serve the same purposes under this Act as the paid-up capital of a local financial institution. (c) For '~he purpose of computing the minimum re~uired capital of a financial institution when such amount i~ prescribed in reference to its liabilities, both capital and liabilities shall be of such kinds and computed in such manner as may be prescribed by regulation. (2) (a) Every financial institution shall maintain a Re serve Account and, before any dividend ~ declared or any profit is transferred to the head office or elsewhere, shall transfer to such Account out of the net profits o~ each year, after due provision has been made for ta~ation, a sum e~ual to n~t less than the ~imum amount specified either in section 18 (1) (a) (ii) or in sectlo~ 18 ( 1 ) (b) (ii), as the case may be. (b) The Reserve Account shall ~either be reduced nor lm paired: Provide~ that the impairment of the Reserve Account shall be permitted when it is the only means ~ preventing an impairment of the capital, in which case the Registrar shall be notified within thirty days of the amount of suc~ impairment. (3) No financial institutlon shall declare, credit or pay any di~idend or make any other transfer from profits whenever there is an impairment of the paid-up or assi~ned capltal or of the minimum required balance in its Reserve Acco~nt. (4) The requirements of this sectlon shall not applY ~o the Lesotho Bank, set up under the Lesotho Bank Order, No. 8 of 1971, as amended. 18. (1) The following requirements shall apply in respect of a financial institution- (a) operating as a bank- (i) the minimum required capital shall be not less than the greater of one hundred thousand rand or five per cent of its liabilities to the public in Lesotho in terms of the most recent balance sheet prepared in accordance with section 27 (1) (a); (ii) there shall be transferred each year to its Reserve Account a sum equal to- (a) not less than fifty per cent of its net profits until the - balance ~ the Reserve Account is equal to one-half the amount of its minimum required capital; or (b) not less than twenty-five per cent of such net profits whenever the balance in the Reserve Account is equal to m~re than one-half but is less than the whole amount of the minimum required capital; (b) operating as a credit institution- (i) the ~nimum required capital shall be not less than that amount prescribed by regulation in respect of the appropriate class of institutions: Provided tnat such prescription- (A) shall not be inferior to the greater ~f fifty thousand rand or five per cent of its liabilities to the public in Lesotho in terrns of the most recent balance sheet prepared in accordance with section 27 (1) (a); and (B) shall not exceed ~e greater of two hundred thousand rand or twenty per cent of its liabilities to the public in Lesotho in terms of the most recent balance sheet prepared in accord ance with section 27 (1) (a); and Provided further that any credit institution required by a change in a regulation under this section to augment its capital shall be afforded a reasonable period of time, not less than twelve months, in which to comply; (ii) there shall be transferred each year to lts Reserve Account a sum equal to not less than twenty-five per cent of its net profit until the balan~e in such ~eserve Account is equal to the whole amount of the minimum requLred capital. (2) When the minimum required capital of a financial in stitution, prescribed in reference to its liabilities, exceeds the amount of its unimpaired capital, such institution may, provisionally and subject to the approval of the Commissioner for such period as he may prescribe, include in the computation of its capital any unimpaired balance in its Reserve Account in excess of the unimpaired balance of the minimurn required amounts which shall have been transferred to such Account under the provisions of subsection (1) (a) (ii) or subsection (1) (b) ii), as the case may be. 19. In making the calculations necessary to ascer~ain that a financial institution has complied with the requlrements of section 18, provision shall be made to t~he satisfactlon of the Commissioner and of the auditor of such institution for the following items- (a) depreciation of assets and bad or doubtful debts (to be calculated at least once in each calendar year) and including accumulated depreciation and bad debts not yet written of~; (b) operating and aocumulated losses; (c) preliminary expenses, representing expenses relat~g to organisation or extension or the purchase of business or goodwill, and including underwriting commission; (d) the value of any assets lodged or pledged to secure liabilities incurred under any law where all the liabili ties (including contingent liabilities) so secured are not included in the calculati~n an~ where the effect of such lodging or pledging is that such assets are not available for the purpose of meeting the liabilities of the institution to the public under this Act; and (e) such other it~ms as may be prescribed by regulation. 20. The Minister may from time to time prescribe by regu lation that every financial institution of a given class or classe~ shall maintain in Lesotho prescribed investments of an amount to be determined as a percentage of its liabilities to the public in Lesotho as shown in its last preceding month~y statement furnis~etl io the Commissioner under section 28 (a): Provided that the total amount of such prescribed in ves tments shall not exceed five per cent of such llabillt le~; and Pronded further that every institutlon required to m~int ain such prescribed investments shall be afforded reasonable period, not less than three months, in whlch to comply with such requirement. 21. The Minister may from time to time prescri~oe by regulation that every financial institution of a given class or classes shall maintain a prescribed minimum amount of loc l assets, i.e. assets (other than claims) situate in Lesotho and as~ consisting of claims payable in Lesotho, to be determined a6 percentage, not exceeding one hundred per cent, of the aggree-t~ value of- (a) i~ liabilities to bhe public in Lesotho as shown in its last preceding quarterly statement furnished to the Commissioner under section 28 (b); and ~b) the minimum paid-up capital and unimpaired Reserve Accoun~t whlich ilt is re~quired to maintain under section 18: Provided that every institution subject to a regulation under this section shall be afforded a reasonable period in which to comply; and Provided further that no such institution shall be re quired to augment its holdings of local assets during any calendar month by an amount in excess o~f ten per cent of the aggregate value referred to in this section. 22. (1) (a) Every financia~ institution which carries on banking business in Lesotho shall at all times maintain liquid assets amounting to not less than the aggregate of- (1) thlrty per cent of its short-term liabilities to the public in Lesotho other than lialbilities under accepbances; plus (ii) twenty per cent of its medium-term llabilities to the public in Lesotho other than liabilities under acceptances; plus (iii) five per cent of its long-term liabilities to the public in Lesotho; and (vi) ten per cent of its liabilities under acceptances, as shown in the last preceding monthly statement furnished to the Commissioner under section 28 (a): Provided that any amounts owing to a financial institu tion in respect ~f loans made by it against the security of ~ixed deposits included under (i), (ii) and (ili) above, may be deducted from the liabilities referred to in said paragraphs. (b) The distribution of amounts between the various types of liquid assets required to be held under this section s~all be ~ade at the discretion of each finallcial instituti~ Provided that the Minister may prescribe by regulation the distribution of amounts bet~veen the types of liquid assets required to be held by every financial institution of a given class or classes. (2) (a) Notwithstanding subsection (1), when, ln the opinion of the Minister, the economic or financial conditions in Lesotho so require, he may from time to time determine for a period, not to exceed six months, that in respect of the institutions of a particular class the percentages mentioned in (i), (ii) and (iii) of paragraph (a) of subsection (1) shall be increased to not more ~an sixty, forty and ten respectively or decreased to n~t less ~an twenty, ten and five respeclively: Provided that no financial lnstituti~n withln a given class may be required to hold any higher percentage than any other institution within the same class. (b) Whenever the Minister has made a determinatlon under paragraph (a), he shall inform the Commissioner thereof in writing, and the Commissioner shall as soon as practicable give written notice of such determination to every instiution of the class to which the determination applies, and cause the determination to be published in the Gazette. (c) Any such determination shall take e~ect on such date, not earlier than its date of publication, as may be prescribed by the Minister and published in the Gazette. (d) Within a period of six months following a determin~tion by the Minister under paragraph (a), he may at any time increase or decrease any percentage determined by him under paragraph (a), within the limits set forth in the said paragraph, and the provisions of paragraphs (b) and (c) shall apply mutatis mutandis to any such increase or decrease. (e) Notwithstanding anything contained in this subsection, no financial institution shall be required to augment its liquid assets during any calendar month by an amount in excess of ten per cent of its short-term and five per cent of its medium-term and long-term liabilities, respectively, as of the close of business on the last working day of the preceding month. (3) For the purposes of this section, "liquid assets" shall consist of freely transferable assets, unen cumbered by any charge or lien whatsoever, of the following c lasses- (d) (a) notes and coins ~.hat are legal tender in Lesotho; (b) net balances withdrawable on deman d at any Snancial institution in Lesotho and money at call in Les otho; (c) Treasury bills and other securities issued by the Government and maturing within three hundred and seventy days; n~t balances or money at call at such fi nancial instltu tions, denominated in such currencies and locat ed In such countries and available in accordance with such terms, as the Commissioner may approve; (e) negotiable instruments of such type as the Commissioner may approve bearing at least two good signa tures, payable within a period o~ one hundred and eighty-si x day~ and drawn on such places, and denominated in such currencies, as the Commissioner may approve; (f) Treasury notes or bills issued by the Gove~ment of such countries, and denominated in such currenci es, as the Commissioner may approve, and maturing within three hundred and seventy days; (g) such other assets as the Minister may, by notice ln tbe Gazette, approve. 2~. A financial institution shall be held to be in violation o~ this Act if it fails to furnish within such reasonable period as may be prescrbed by the Commissioner any informa~ion requested by the Commissioner to satisfy himself that the financial institution is complying with sections 20, 21 and 22. 24. (1) No financial institution shall directly or indirectly- (a) grant to any person any advance or credit facility, or give any financial guarantee or incur any other liability on behalf ~f such person, so that the total value of such advances or credit facilities to, and financial guarantees or other lia~ilities on behalf of, such person is at any time more than ten per cent of the sum of the unimpaired paid up or assigned capital and unimpaired balance in the Reserve Account of the financial institution: D~ ;AA~ tl.~qt ~ rluYl~ UI.a~,lu~ pOIl ~1~ lUl~Olllg ~r~l~a~; tions shall not apply in respect thereof if such transactions- (i) are upon, or with respect to, drafts or bills of exchange drawn in good faith against actually e~t ing assets, or upon bankers' acceptances or bills of exchange of the kinds and maturities authorised by regulation9 or upon commercial or business paper actually owned by the person discounting or selling the same with or to such financial institution and endorsed without l~tation or guaranteed by such person; (ii) are granted against special security, appropriately covered by insurance, if the property is insurable, having a value as collateral as found in good faith by an officer of such financial institution, of at ~east (lii~ (iv) fifteen per cent more than the amount of the obligation secured thereby;". represent loans to, or guaranteed by, the Government of Lesot ho; or represent such loans to, or guaranteed by, such foreign governments, as the Commis sioner may specify for the purposes of this section; (v) are se~ ed by a written guarantee furnished by a gl~..rantor of established credit worthiness accepted in good faith by an officer of such financial institution; or are secured by a pledge of assets ha ving value determined in good faith by such officer of at least fifteen per cent more than the amount of the obligation secured thereby;". (b) grant any advances or credit facilities against the security of its ow~ shares or those of any other licensed financial institution; (c) except with the prior approval in writing of the Commissioner, grant or permit to be outstanding unsecured advances or unsecured credit facilities of an aggregate amount in excess of the greater of thr ee thousand rand or one per cent of the sum of its unimpaired paid-up or assigned capital and unimpaired balance in its Reserve Account- (1) to any one of its directors; (ii) to any firm, partnership, syndicate, association, company or other body of persons corporate or unincorporate in which it or any one or more of lts directors is interested as owner, shareholder, director, partner, manager, agent or member; or (iii) to any individual, firm, partnership, syndicate, association, company or other body of persons corporate or unincorporate of whom or of which it or any one or more of its directors is a guarantor; (d) grant or permit to be outstanding to its officers and employees unsecured advances or unsecured credit facilities which in aggregate amount for any one offlcer or employee exceed one year's emoluments of such officer or employee; (e) engage, whether on its own account or on a commission basis, in the wholesale or retail trade, including the import or export trade, except insofar as may exception ally be necessary in the course of banking business or in the course of the satisfaction of debts due to it; (f) acquire or hold any part of the share capital of any financial, commercial, agricultural, industrial or other undertaking except such shareholdings as a financial institution may acquire in the course of the satisfaction of debts due to it which shareholdings shall, however, be disposed of at the earliest suitable moment: Provided that this paragraph shall not prevent the purchase and sale of shares of stock for trust account or upon the order a~d for the ~ccount of a customer without recourse; and Provided further that it shall not apply- (i) in respect of any shareholding approved by the Minister ln any corporation set up for the purpose of insuring deposits or of promoting the developmer~ of a money market or securities market in .,esotho or of improving the financial mechanism for the financing of economic development; Li) to all shareholdings in other undertakings the aggregate value of which does not at any tlme exceed twenty-five per cent of the sum of lts unimpaired paid-up or assigned capital and unimpaired balance in its Reserve Account: Provided, however, that, notwithstanding the provisions of (ii), the acquisition of voting shares of a local financial Institution shall be subject to the prlor authorisation of ~e Commissioner, (g) purchase, acquire or lease real property except as may be necessary for the purpose of conducting its business, iIlcluding provision for future e~pansion or housing its staff or in 6uch circumstances as the (~ommissioner many approve: Provided that- (i) ~n respect of any real property held or leased by a financial institution at the commencement of this Act for purposes other than those referred to here in, such financial institution shall be allowed a reasonable period, not less than three years, in which to comply with this para~raph; and (ii) a financial institution may secure a debt on any real or other property and in default of repayment may acquire such property for resale by the financial institution as soon as possible thereafter. (2) In the application of the limitation of paragraph (a) of subsection (1), if the Commissioner shall determine that the interests of a group of two or more persons are so interrelated that they should be considered as a unit, the total indebtedness of that group shall be combined and deemed in respect of a single person: Provided that a financial institution shall not be deemed to have violated paragraph (a) of subsection (1) solely by reason of the fact that the combined indebtedness exceeds the limitation at ~e time of the determination, but the financial institution shall dispose of indebtedness of the group in the amount in excess of the limitation within such reasonable time as shall be fixed by the Commissioner. (3) Any financial institution which, prior to the commencement of this Act, entered into any transactions ~compatible with the pronsions of paragraphs (a) to (f) of subsection (1), shall within three months after ~e commencement of this Act submit a statiment thereof to the Commi3sioner and shall, subject to agreement with the Commissioner, liquidate all such transactions as soon as possible. PART V-AUDlT, INFORMATION AND INSPECIlON 25. (1) Every financial institution shall appoint annually an independent auditor, satisfactory to the Commissioner, whose duty shall be to make ~ report to the shareholders in the case of a local financial institution and to the head of fice in the case of a forei~n financial institution upon the annual balance sheet and profit and loss account, and in every such report he shall state whether in his opinion the balance sheet and profit and loss account are full and fair and properly drawn up, whether they exhibit a true and correct statement of the financial institution's affairs and, if the auditor has called for explanations or information from the officers or agents of the financial institution, whether such are satisfactory. (2) The report of the auditor shall be read together with the report of the board of management of the finallcial institutlon at the annual meeting of shareholders of each local financial institution and shall be transmitted to the head office of each foreign financial institutlon, and a copy thereof sent to the Commissioner. (3) If a financial institution fails to appoint an auditor in accordance with the provisions of subsection (1), the Commis sioner shall have the power to appoint him. The remuneration of such auditor shall be paid by the financial institution. (4) No person having any interest in a financial ~nstitutlo~ otherwise than as a depositor and no offlcer, employee or agent of a financial institution shall be eligible for appointment as an auditor to such financial institution, and any person appointed as an auditor to any financial institution who shall after such appointment acquire such interest or become an officer, employee or agent of such financial institution shall for~hwith cease to be such auditor. 26. Every financial institution shall keep such record~ in Lesotho as are necessary to exhibit clearly and correctly the state of its affairs and to explain its transactions and financlal position and to enable the Commissioner to determine whether the institution has complied with the provisions of this Act, and it shall preserve every such record for a period of at least three years as from ~he date of the last entry therein. 27. (1)(a) Not later than ~ree months after the expiration of the calendar year, every local financial institution , in respect of all business transacted by it, and every foreign financial institution, in respect of all business transacted through its places of business in Lesotho shall prepare, with reference to that year, a balance sheet and profit and loss a count as of the last working day of the year in such form as the Commissioner may prescribe and under the joint signatures of the principal offlcer and majority of directors in the case of a local financial institution and of the manager and the ne~t most senior officer ~f the principal place of busines~ in Lesotho in the case of a foreign financial instltution. (b) The balan~ sheet and profit and loss account prepared in accor~ance with paragraph (a) shall be audited in the manner prescribed in section 25. (2) Every financial institution shall- (a) within f ourteen days after the preparation of a balance sheet and profit and loss acoount in accordance with the provisions of subsection (1)- (i) send to the Commissioner copies thereof; and (u) publish a copy of such balance sheet in the Ga~ette and, where possible, in at least one newspaper ot gen eral c~rculation in LesoMlo; and (b) exhibit throughout the year in a conspicuous position in everg place of business of the financial institution in Lesotho excluding a mobile agency a copy of its latest such balance sheet. 28. Every financial intitution shall send to the Commissioner ln duplicate- (a) not later than the twenty-first day of each month a statement in such form as the Commissioner may pres cribe showing the assets and liabilities of its places of business in Lesotho at the close of business on the last business day of the preceding month; (b) not later than forty days after the last day of each quarter endmg on 31st March, 30th June, 30th September and 31st December, a statement in such form as the Commissioner may prescribe giving an analysis of its assets and liabilities in Lesotho at the close of the last business day of the quarter: Provided that the Commissioner may from time to time call for any additional information which he may require for the pur~ose of the administration of this Act from any financial instltution about lts operations in Lesotho or those of its afflliates in Lesotho or from a local financial institution about its operations and those of its affiliates abroad. 29. At ~le request of a financial institution, the Commissioner may, in his discretion, extend from time to time any period withln which such financial institution is, under the provisions of this Act, obliged to furnish any document or information. 30. (1) The Commissioner may, from time to time, after con- ] sultation with the Minister, cause an examination under condi- t tions of secrecy to be made of any fin~ncial institution in order to determine that it is in a s~und financial condition and that the requirements of this Act have been complied with in the administration of its affairs. (2) For the pulpose of determining the condition of a fin ancial institution and its compliance with this Act in the course o£ an examination undertaken pursuant to subsection (1), the Commissioner may cause an examination to be made of any of its affiliates in Lesotho to the same extent that an examination may be made of the financial instih~tion. (3) The Commissioner shall also cause such an examination to be made where application is made by one-fifth of the total number of depositors, or by any number of depositors holding not less than one-third of the liabilities to the pubLic in Lesotho, of that institution: Provided that the applicants shall submit to the Commissioner such evidence as he may consider necessary to justify an examination. 31. (1) Every financial institution and every aff liate o fp such institution shall, pursuant to an examination conducted o~ under section 30, produce for the inspection of any examiner 81 dul yauthorised by the Commissioner to examine their affairs, at fc such times and in such places as the examiner may specify (being e~ times and places which, in the opinion of the examiner, would not be detrimental to the conduct of the normal daily business of such institution), all books, minutes, accounts, cash, securitie9, documents and vouchers in their possession or custody, relating to their business in Lesotho and shall supply alll information concerning their business in Lesotho as may reasonably be required by such examiner wi~hin such time as the examiner may specify. (2) If any books, minutes, accounts, cash, securities, docu ments and vouchers are not produced or information iS not supplied in accordance with subsection (1), the defaulting financial institution or affiliate, or both, as the case may be, shall be guilty of an offence and shall be liable on conviction to a fine not exceeding two hundred rand in respect of every day durlng which the default continues. If any lnformation supplied or item pr~ duced is false in any material particular, the financial institution or affiliate, or both, as the case may be, shall be guilty ~f an offence and shall be liable on convictlon to a fine not exceeding five thousand rand. (3) As soon as possible after the conclusion of an examl nation, the Commissioner shall forward a summary of the examiner's report containing its salient points to the head office of the financial institution concerned. (4) All expenses of, and incidental to, an examination shall be paid by the financial institution as prescribed ~y regulatlon. 32. Any director, officer, e~ployee or agent of a financial institution who- (a) obstructs- (i) the proper performance by an auditor of his duties in accordance with the provisions of this Act; or (ii) a lawful examination of suc~ institution by an exa miner duly authorised by the Commissioner; (b) with intent to deceive- (i) makes any false or misleading statement or ent~y; or (ii~ omits any statement or entry that should be made in any book, account, report, or statement of such institution, shall be guilty of an offenc~ and liable on conviction to a fine not exceeding one thousand rand, or to imprisonment for a term not exceeding one year, or to both such fine and imprisonment. 33. If in the opinion of the Commissioner an examination shows that the financial institution concerned is conducting its business in an unlawful or unsound manner or that it is otherwise in an un~ound condition, the Commissioner may- (a) require such institution forthwith to take such measures as he may c~nsider necessary to rectify the situation; (b) appoint a person, who in his opinion has had proper training and experi ence, to advise the financial inst~ tution on measures to be taken to recti£y its situation, and shall fix his r emunerati~n which shall be paid by the financial institution. 34. (1) Nothing in this Act shall authorise the Minister or C the Commissioner to inquire or cause an inquiry to be made mto li ~e affairs of any individual customer of a financial institution. P (2) The Commissioner may publish in whole or in part, in l ~uch form and at such tirne as he may determine, any information or date furnished or collected under this Act: Provided that no information or data shall be published which might disclose the particular affairs of a financiai institution or of a customer o£ a financial institution unless the consent of that financial institution or customer, as the case may be, has been obtained in writing prior to such publication. (3) The Commissioner shall annually submit to the Minister a report on all agents and institutions licensed or provisionally licensed under this Act and on all matters relating to such agents and institutions which have been dealt with by him during the year under review, and the Minister sh~ll present the report to the Assembly. PART VI-MISCELLANEOUS PROVISIONS 35. Any director, manager or other officer concerned in ] the management of a financial institution who fails to take all 5 reasonable steps to secure compliance by the institution with the requirements of this Act shall be guilty of an of~ence and shall I be liable ol~ conviction to a fine not exceeding one thousand rand ' or to imprisonment for a term not exceeding six months, or to both such imprisonment and fine. 36. (1) Any person who is a dire ctor or manager of, or ] otherwiseconcerned with the management in Lesotho of, a financi al institution, or is an agent withm the meaning of section 9, or is otherwise representing in Lesotho any financial institution, shall cease to exercise such function- (a) if he is declared bankrupt or makes a comp~sition with his cr editors; or (b) if he is convicted of an offence involving d ishonesty or fraud . (2) No person who has been a director or manager of, or ot herwise directly or indirectly concerned in the management of, a ny financial institution which has been liquidated, whether in Lesotho or abroad, shall, without the express authority of the Commissioner, act or continue to act as a director or manager of, or otherwise be directly or indirectly concerned in the management of any licensed financial institution. (3) Any person who contravenes the provisions of sub section (1) or (2) shall be guilty of an offence and liable on conviction to a fine not exceeding two thousand rand or to imprisonment for a term n~t exceeding two years, or to both such fine and imprisonment. 37. Every financial institution shall either maintain ~ special reserve account which is, in the opinion of the Commissloner, adequate and which is reserved exclusively for the purpoce of making good any loss resulting from the negligence or dishonesty of any of its officers and other personnel, or it shal] insure itself against such loss, to an amount which the Commissioner deems adequate, with a person approved of by the Commissioner carrying on insurance business or the business of guaranteeing against such loss as aforesaid. 38. (1) The klinister may declare, by appropriate notlce, a~ly day to be a financial holiday on which no financial institution may be open for business with the public. (2) Except with the approval of the Commissioner, all fill ancial institutions shall remain open for business with the public on such days, other than public holidays and financial holidays, and during such hours, as may be prescribed by regulation. (3) Any private obligation which can only be fulfilled at a financial institution and which would fall due on any day on which such institution is not open for business under this section, shall be deemed to fall due on the next day on which said financial institution is open for business. 39. In all transactions connected with the opening of, de posit into, or withdrawal from, a deposit account, whenever the depositor is unable to sign, his thumb impression afflxed in the presence of an officer of the financial institution shall have the same legal effect as if it were the depositor's signature. PART VII-WINDING UP AND SEIZURE 40. (1) Subject to the provisions of this section, ~e pro~isions of the Companies Act, No. 25 of 1967, relating to the winding up and judicial management of com panies (Part IV), the winding up of unregistered associations (Part V), or the winding up of external companies (Part VI) shall be applicable to licensed financial institutions which are companies, unregis tered associations or external companies, respectively, within the meaning of the Companies Act: Provided that- (i) for the purposes o£ this section and notwlthstanding section 278 of the Companies Act, an unregistere~l association shall be subject to the provisions of Part V of the Companie sAct regardless of the number of its members; (ii) notwithstanding ihe p rovisions of sections 27~ and 292 (2) of the Companies Act section 264 to 271, inclusive, of the Companies Act shall be applicabl~ mutatis mutandis to licensed ~nancial i nstitutions which are unregistered associations or exter nal companies; (iii) the powers and functions assigned to the Master under the Companies Act shall be exercised by the Commissioner or a person approved by the Commissioner, and (iv) the provisions of the Comp anies Act sp~ally a~ plicable to a creditors' voluntar y winding up (sections 218 to 221, inclusive) shall not apply to ~nancial institutions. (2) There shall be no win~ing up, whether voluntary or by the court, or ~udiclal management a licensed financial institution without the prior consent in writing of the Commissioner: Provided that the consent of the Commissioner for a voluntary liquidation shall be granted on such terms and conditions as he may determine and only if it appears to him that the institution is solvent and has sufficient liquid assets to repay its deposiors and other creditors in full and withou~ delay. (3) Within fourteen days from the granting of consent by the Commissioner under subsection (2) for windLng up, a notice setting forth such information as the Commissioner may prescribe sh~ll be sent by mail to all depositors, other creditors, and persons othelwise entitled to the funds or property held by the financial ins~itution as a trustee, fiduciary, lessor of a safe deposit box, or ~ailee. The notice shall also be posted conspicuously on the premises of each place of business of the financial institution, and the financial lnstitution shall publish it in the Gazette and in such other places as the Commissioner may prescribe. (4) (a) Notwithstanding the provisions of sections 187 (2) and 226 (2) of the Companies Act and the relevant pro visions ~f ~e law relating to insolvent estates, a depositor of a financial institution, evidence of whose claim appears, to the satisfaction of the liquidator, in the books, accounts or other documents of such institution, shall be deemed to have proved such claim for the purposes of the aforesaid provisions. (b) Any other funds or property held by the financial in stitution as a trustee, fiduciary, lessor of a safe deposit box, ~r bailee, which have not been returned to their rightful owners in the course of the winding up of such institution shall, together with the inventories pertaining thereto, be placed in the custody of the Commissioner (S) Notwithstanding the provisions of sectioll 256 of the ~:ompanies Act and section 103 of the law relating to insolvent estates, in the winding up of a financial institution unable to pay its debts, any balance of the free residue after making provision for the e~penditure mentioned in sections 97 to 102, inclusive, of said law, shall be applied in payment of the remaining claims in the fo~lowing order- (a) deposits and interest acc~.ied thereon up to an amount not exceeding five hu~dred rand per depositor; (b) deposits and interest accrued thereon of nationals or residents of Lesotho; (c) other deposits and interests accrued thereon; (d) other cl~s. 41. (1) A financial institution which receives any deposit ' while insolvent shall be guilty of an offence and shall be liable on conviction to a fine not exceeding five thousand rand. I (2) A director, officer or employee of a financial institu tlon who knows ~f, or, in the proper performance of his duties, ~ hould know of the insolvency of such insUtution, and who r~ ceives, or authorises the acceptance of, a deposit shall be g~ty of an offence and liable, on conviction, to imprisonInent for a terrn not exceeding one year, or to a fine not exceeding one thousand rand or to both such imprisonment and fine. 42. The Commissioner, may, acting with the prior written approval of the Minister, take possession of any financial institution- (a) whose required paid-up or assigned capital is impaired or whose condition is otherwise unsound: (b) whose business is being conducted in an unlawful or imprudent manner; (c) when the continuation of its activities is d~trimental to the interests of its depositors; (d) that refuses to permit a~ e~arnination to be made as provided in section 30 or has otherwise obstructed such examination; or (e) on which notice of intention to revoke its licence has been served under section 13 (2). 43. When taking possession, the Commissioner shall post at each place of busmess of the financial institution a notice announcing his action pursuant to section 42, specifying the time when such possession shall take effect. A copy of the notice shall be transmitted to the court. 44. Within a period of ten days after the date on which the Commissioner has taken possession of a financial institution, said institution may institute proceedings in the court to have the seiz ure lifted. 45. (1) When the Commissioner has taken poss ession of a financial institution, he shall be vested with the full and exclusive powers of management and control o~ the institution, including witho ut limiting the generality of the foregoing, the power to continue or discontmue its operations, to stop or limit the payment of its obligations, to employ any necessary officers or employees, to execute any instrument in the name of the financial institution, to initiate, defend and conduct in its name any action ~r proceedings to which the institution may be a party, to terminate possession by restoring the institution to ¥'~s board of directors or owners, as the case may be. (2) As soon as possible a~ter taking possession of a financial institution, the Commissioner shall make an inventory of the assets and property of the institution and transmit a copy thereof t othe court. This copy of the inventory shall be available fo r examination by interested parties at the office of the Commissioner of the Court. 46. When the Commissioner has taken possession of a financial institution- (a) any term, statutorY, contractual or othe~e, on the expiration of which a claim or right of the institution would expire or be extinguished, shall be extended by SL~ months fro~t n the date of seizur e; (b) (c) any a~tachment or llen, except an attachment or lien existing slx months prior to the seizure of the institution shall be vacated and no attachment or lien, except an attachment or lien created by the Commissioner in the application of section 45, shall attach to any of the assets or property of the institution so long as such possession continues; any transfer of an asset or property of the institution made sfter or in contemplation of its insolvency or seizure by the Commissioner with intent to effect a preference shall be void. 47. No execution shall be returned against the assets or property of a seized financial institutlon, except, i~ the discretion ~f the court, an execution effected pursuant to a judgment rendered prior to the date of the seizure for an amount not ex-, ceeding five hundred rand. 48. When the Commissioner has taken possession of a fin ancial institution, he shall, within a maximum period of sixty days counting from the effective date of seizure specified pursuant to section 43- (a) terminate the seizure; (b) apply to the court by petition for a wlnding up or ~dicial management order under the provisions of the Compani~s Act; or (c) propose a compromise or arrangement between the financial institution and its creditors under section 161 of the Companies Act or a reconstruction of such instl~ution under se~tion 163 of said Act: Provided that for the purposes of this paragraph the provlsions of sections 161 to 164, inclusive, of the Com panies Act shall apply mutatis mut~ndis to unregistered associations regardless of the number of members and to external compal~ies. PART Vlll-ABANDONED PROPERTY 49. (1) The following items held or owing by a ~inanclal instltu~ion, except as provided in subsection (2), ar e presumed to ~e abandoned: (a) any general deposit (demand, savings or matured time deposit) made in Lesotho with such institution, toget her with any interegt or dindend, excluding any lawful charges; (b) any funds paid in Lesotho toward the purchase of shares or other interests in such institution, together with any interest or dividend, excluding any lawful charges; (c) any sum payable on cheques certified in Lesotho, or on written instruments issued in Lesotho, on which such institution is directly liable; (d) any contents of a safe dep~sit box upon which the lease or rental period has e~pired and concerning which notice of the institution's intent to deliver said contents into the custody of the Commissioner has been sent by registered letter to the last known address of the lessee. (2) The items enumerated in subsection (1) (a), (b) and (c) shall not be presumed to be abandoned if the owner has, within fifteen years of the date of (a) initial deposit or any sub~equent deposit or withdrawal, (b) payment of funds, or (c) ~suance of instruments, as the case may be- (a) increased or decreased the amount of the deposit or funds or presented the passbook or ~ther record for the crediting of interest or dividends in respect of the items enumerated in subsection (1) (a) or (b); (b) corresponded in writing with the financial illstitution concerning the items enumerated in subsection (1) (a), (b) or (c); or (c) otherwise indicated an interegt in the items enumerated in subsection (1 (a), (b) or (c), as evidenced by a memorandum concerning them on file with the financial institution. 50 (1) Every financial ~titution holding any ltem pre surned to be abandoned under section g9 annually shall report such holding to the Commissioner, and thereafter pay or deliver to him all aballdoned funds or other property listed in the report, as may be prescribed by regulation. Upon paying or delivering abandoned funds or other property into the custody of the Commissioner, a financial institution shall be relieved of all liability to the extent of the value of such funds or other property for any claim in respect thereof. (2) Any funds paid to the Commissioner under subsection (1) shall be credited to the Consolidated Revenue Account as prescribed by regulation: Provided that if any person entitled thereto subsequently proves to the satisfaction of the Accountant-General his clairn to such funds he shall be repaid from said Account. 51. Any financial institution which wilfully fails to file the report, or to pay or deliver funds or other property presume~ to be abandoned into the custody of the Commissioner, in accordance with section 50 shall be guilty of an offence and shal~ be liable on conviction to a fine n~t exceeding five hundred rand. PART IX~ENERAL PROVISIONS AND REPEAL 52. The Minister may make such regulations as may be required from time to time for giving effect to the provisions of this Act. 53. Any decision taken by the Commis sioner under this Act, lncluding any refusal or revocation o f licence, shall be subject to appeal to Mle Minister. The appeal shall be noted and prosecuted ln the manner and within the time prescribed by regulation. 54. The Ban~s' Statements Act, No. 19 of 18~5 i~ hereby repealed. SCHEDULE Licenc~ and other fees Agents- Licence fee (per annum) Financial Institutions- Investigation fee Registration fee Licence fee (per annum)- Rand 100 50 100 For the first or only place of business 200 For every other place ~f business 50