MAURITIUS Law and Practice Contributed by: Valerie Bisasur, Jean-Vincent Dacruz and Shane Mungur, BLC Robert & Associates
unique economic environment, the BoM includes “exposure to large groups” as an additional indi - cator. The BoM assesses banks whose Segment A assets represent at least 3.5% of GDP. In line with the recommendations of the BCBS, the additional loss absorbency requirement of D-SIBs must be met with common equity Tier 1. This additional capital takes the form of a surcharge for D-SIBs. The level of capital sur - charge applicable to each D-SIB is then cali - brated depending on the category in which that D-SIB is placed. The BoM periodically reviews the list of banks that are determined to be sys- temically important for Mauritius, with the last review being undertaken in June 2021. 8. Insolvency, Recovery and Resolution 8.1 Legal and Regulatory Framework Mauritius has not yet implemented the Finan - cial Stability Board’s “Key Attributes of Effective Resolution Regimes for Financial Institutions”. Under the current legal regime, conservatorship is the principal means of resolving a failing or a Under Section 65 of the Banking Act, the BoM may – in order to protect the assets of a financial institution for the benefit of its customers and other creditors – appoint a conservator, if it has reasonable cause to suspect that: • the capital of the bank is impaired or there is threat of such impairment; likely-to-fail bank. Conservatorship • the financial institution has, or its directors have engaged in, practices detrimental to the interest of its depositors or that the financial
institution or its senior management officers have violated any provision of the banking laws, AML/CFT obligations or guidelines; and • the assets of the financial institution are not sufficient to provide adequate protection to the bank’s depositors or creditors. When a conservator is appointed, the latter takes full control of the bank and has all powers necessary to preserve, protect and recover any assets of the financial institution, and to collect all sums of money and debts due to the bank. The conservator also has the power to suspend, in whole or in part, the repayment or withdrawal of any liabilities and pre-existing deposits of the financial institution. Unless the BoM determines otherwise, there is a time constraint of 180 days on the conservator to rehabilitate the financial institution. Compulsory Liquidation The BoM will appoint a receiver to manage and control a bank where it has evidence that the bank’s: • capital is impaired or unsound; • capital-to-assets ratio is less than 2%; • business is unlawful or unsafe; • continuance is detrimental to the interests of its customers; or • licence has been revoked. Duties of Receiver Under Section 77 of the Banking Act, the receiv - er must commence proceedings leading to the compulsory liquidation of the assets of the financial institution or take such other measures necessary in respect of the financial institution within a period of not more than 30 days, or must terminate the taking of possession.
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