Committee approves bill to amend Banking Act

Economic Committee of the People’s Majilis has approved a bill to amend the Maldives Banking Act.

The amendment bill was proposed by Ali Arif, MP for Kelaa Constituency on behalf of the government, and it was approved by the Economic Committee today.

The amendment stipulates that the standard of credit exposure kept at the Maldives Monetary Authority (MMA) and the standard of loan facilities given to those who are associated would be set by a regulation made by the MMA.

Subject of the amendment is Article 28(a) of the Act. The provision currently sets the credit exposure standard at MVR1 million, and sets the standards of credit exposure to parties associated in any way at 15 per cent of the Bank’s capital.

MP Arif noted that having the standards rigidly mentioned in the statute causes difficulties, as economic situation of the country often requires these standards to be raised or lowered, and that the law should instead give the central bank, MMA, discretion to set them from time to time, on the basis of economic condition and necessities.

The Economic Committee’s report after “researching the amendment bill” says that all stakeholders in the government as well as all the Banks in the country were consulted during the “research process”.