Pretoria University Law Press (PULP)

PULP is an open-access publisher based at the Centre for Human Rights, University of Pretoria

Legal aspects of banking regulation: Common law perspectives from Zambia

Legal aspects of banking regulation: Common law perspectives from Zambia
by Kenneth K Mwenda
2010
ISBN: 978-0-9814420-7-5
Pages: 330
Print version: Available
Electronic version: Free PDF available

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About the publication

The current global economic crisis has highlighted the need for effective regulation of the financial services sector. In this book Kenneth Mwenda investigates the regulation of the banking sector in Zambia. Apart from providing a thorough exposition and critique of the legal aspects of banking regulation in that country, the book serves as an example of the kind of work that needs to be done with respect to banking regulation in other African countries and indeed developing countries in general. As such it is an informative tool to those preoccupied with the supervision of banks and financial institutions, including domestic and international policy makers and legislators, everywhere.

‘In this ground-breaking book, Prof Mwenda explores with great mastery the tapestry of banking regulation law… The dearth of literature on issues of banking regulation as it pertains to Sub-Sahara Africa (SSA), with comparatives drawn from international best practices, makes this book a must read. The book’s approach, as well as its depth and breadth of coverage on this emergent topic, clearly distinguishes it from any that have been written on banking law and practice in SSA.’
– Gerry N Muuka, Professor of Management, Murray State University, USA

‘Prof Mwenda’s book is one of those rare works which demonstrate, with an enviable grasp of detail, the complexities of implementing transplanted legal concepts in a domestic institutional context. It is a stellar work of research and analysis which takes the various strands of this subject to a whole new level.’
– Victor Mosoti, Attaché Legal Adviser, Cabinet of the Director-General of the Food and Agriculture Organisation, Italy

‘Prof Mwenda’s work is an important addition to the discourse on financial governance in general and the regulation of the financial services sector in particular; timely and relevant, in the shadow of the crisis facing the world economy today.’
– Andrew Mwaba, Lead Economist, African Development Bank, Tunisia

About the editor:

Professor Kenneth K Mwenda is Senior Counsel in the Legal Vice-Presidency of the World Bank, Washington DC and Extraordinary Professor in the Faculty of Law at the University of Pretoria, South Africa.


Table of Contents

TABLE OF CASES
FOREWORD
PREFACE
ACKNOWLEDGMENTS
DEDICATION

  1. THE CONCEPT OF A BANK AND BANKING BUSINESS
    1 Context of the study
    2 Defining the terms ‘bank’ and ‘banking business’
    3 The element of deposit taking
    4 Conclusion
  2. APPLICABILITY OF THE ULTRA VIRES DOCTRINE OF COMPANY LAW TO BANKS AND FINANCIAL INSTITUTIONS
    1 Introduction
    2 The ultra vires doctrine under the English common law
    3 The ultra vires doctrine in Zambia’s company law
    4 Does the ultra vires doctrine apply to banks and financial institutions in Zambia?
    5 Conclusion
  3. REGULATION OF BANKS AND FINANCIAL INSTITUTIONS
    1 Introduction
    2 Money laundering and deposit insurance
    3 The role of the central bank as lender of last resort
    4 The independence of the Bank of Zambia
    5 The competent authority for regulating banks and financial institutions
    6 Directors and managers of banks and financial institutions
    7 Further efforts to legislate against insider lending
    8 Anti-competitive conduct
    9 Chapter VI of the Banking and Financial Services Act 1994
    10 Capital adequacy and special reserve or liability insurance
    11 Conclusion
  4. REGULATORY ROLE OF THE CENTRAL BANK IN PREVENTING AND FIGHTING MONEY LAUNDERING IN THE BANKING SECTOR
    1 Introduction
    2 Setting the discussion in context
    3 The Bank of Zambia Anti-Money Laundering Directives 2004
    4 Conclusion
  5. LEGISLATIVE FRAMEWORK FOR ANTI-MONEY LAUNDERING UNDER THE PROHIBITION AND PREVENTION OF MONEY LAUNDERING ACT 2001
    1 Introduction
    2 Supervisory authorities and regulated institutions
    3 The Anti-Money Laundering Authority
    4 The Anti-Money Laundering Investigations Unit
    5 Statutory offences of money laundering
    6 Other offences relating to money laundering
    7 Can tax evasion by banks lead to the offence of money laundering?
    8 The burden of proof in offences of money laundering
    9 Civil liability in cases of money laundering
    10 Statutory duties of the Bank of Zambia in fighting money laundering
    11 Statutory duties of regulated institutions in the prevention of money laundering
    12 Conclusion
  6. UNSAFE AND UNSOUND PRACTICES OF BANKS AND FINANCIAL INSTITUTIONS
    1 Introduction
    2 The concept of ‘unsafe and unsound practice’
    3 The Zambian case of Access Finance Services and Others v Bank of Zambia
    4 Statutory interpretation
    5 The treatment of ‘unsafe and unsound practice’ in the United States of America
    6 Legislative developments to counter unsafe and unsound practices in Zambia
    7 The difference between ‘unsafe and unsound practice’ and ‘money laundering’
    8 How we can determine what is ‘unsafe and unsound practice’ in the absence of a bank’smemorandum of association
    9 Conclusion
  7. LEGAL FRAMEWORK FOR RISK MANAGEMENT AND CORPORATE GOVERNANCE
    1 Introduction
    2 A metaphorical understanding of the term ‘risk’
    3 Banking and Financial Services Risk Management Guidelines 2008
    4 Banking and Financial Services (Corporate Governance) Guidelines 2006
    5 Conclusion
  8. REGULATING THE INSOLVENCY OF BANKS AND FINANCIAL INSTITUTIONS
    1 Introduction
    2 International efforts to harmonise insolvency systems
    3 Legal aspects of regulatory treatment of banks in distress
    4 The Zambian legal and institutional framework for bank insolvency
    5 Conclusion
  9. CONCLUSION
    1 Introduction
    2 FSDP (2004-2009) on the regulation of banks
    3 FSDP (2004-2009) on the regulation of non-bank financial institutions

BIBLIOGRAPHY
INDEX


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