The legal framework for banking business is embodied in the Banking Act 1988. Under the FSD Act 2001, consequential amendments were brought to section 46 of the Banking Act 1988 whereby Domestic Banks are now defined as Category 1 Banks having a Category 1 banking licence and offshore banks are now defined as Category 2 banks with a Category 2 banking licence. The banking legislation provides for prudential regulations with respect to banks’ concentration of risk, weighted capital adequacy ratio, income recognition and clarification of loans and advances for provisioning purposes, maintenance of accounting and other records and internal control systems.
