Home | Databases | WorldLII | Search | Feedback Cook Islands Sessional Legislation

Banking Act 1969

Repealed

COOK ISLANDS

BANKING ACT 1969

ANALYSIS

Title

1. Short Title
2. Interpretation
2A. Power of Exemption

PART I
LICENSING OF BANKS

3. License required to conduct banking business.
4. Application to be made to Board.
5. Public interest to be considered.
6. Principal office and officers to be stated.
7. Amendment and revocation of license.
8. Information to be supplied to Board.
9. Keeping and audit of accounts.
10. Powers of the Board.
11. Use of the word "bank" and other words.
12. Appeal.
13. Saving power of Audit Office to inspect accounts.
14. Mode of proof of entries in books.
15. When books not compellable to be produced.
16. Court or Judge may order inspection.
17. Post Office Savings Bank.
18. Destruction of cheques and other documents.
19. Stamp duties.
20. Bank not to issue bank notes.
21. Sections 645 and 646 of the Cook Islands Act 1915 not to apply to Bank transactions.
22. Regulations
23. Repeal.

PART II
EXCHANGE CONTROL

24. Control of overseas exchange and other transactions.

-------------------------------------------

No. 13 of 1969

[In this Act, the word "Board" was substituted for the word "Minister"- see Act 1981/18].

An Act to regulate banking and business in the Cook Islands and matters related thereto

(9 October 1969

BE IT ENACTED by the Legislative Assembly of the Cook Islands in Session assembled, and by the Authority of the same, as follows:

1. Short Title - This Act may be cited as the Banking Act 1969.

2. Interpretation - In this Act, unless the context otherwise requires, -

"Bank" means any person carrying on banking business;

"Banking business" means the business of banking in all its customary branches and departments including that of a Savings Bank and without limiting the generality of the foregoing also includes borrowing, receiving or taking up money at interest or otherwise on current account, savings account, deposit account or other account and which according and subject to arrangement is repayable on the cheque, draft, order or authority of the customer; lending or advancing money, securities and property or giving credit at interest or otherwise with or without security to any person, company or corporation; discounting, buying, selling and dealing in bills of exchange, promissory notes, coupons, drafts, bills of lading, warrants, debentures, certificates script, hire purchase agreements, and other instruments and securities whether transferable or negotiable or not; granting and issuing letters of credit and circular notes; buying, selling and dealing in bullion and specie; dealing in foreign or overseas exchange; acquiring, holding, issuing on commission, underwriting and dealing with stocks, funds, shares, debentures, debenture stock, bonds, obligations, securities and investments of all kinds; negotiating of loans and advances; becoming surety for the payment of money or performance of contracts or obligations by any person, company or corporation; receiving money and valuables on deposit or for safe custody or otherwise; collecting and transmitting money and securities; managing property and transacting all kinds of agency, business commonly transacted by bankers; carrying on such other business outside the customary scope of its business of banking as the Board may from tine to time authorise or approve;

"Bank notes" means negotiable instruments used or circulated or intended for use or circulation as currency;

"Court" means the High Court of the Cook Islands and "Judge" means a Judge of the High Court;

"Legal proceedings" means any civil or criminal proceeding or inquiry in which evidence is or may be given and includes arbitration;

"Officer" in relation to a bank includes manager accountant and cashier of the bank or of any branch thereof;

["Board" means the Cook Islands Monetary Board;]

"Person" includes any body or persons whether corporate or unincorporate and any company corporation or society incorporated or which may hereafter be incorporated in the Cook Islands;

"Prescribed" means prescribed by regulations made under this Act.

[Amended Act 1981/18]

2A. Power of Exemption - (1) The Cook Islands Monetary Board may, under its own motion or pursuant to an application in writing lodged with the Secretary by a Bank, exempt that Bank from all or any of the provisions of this Act and any regulations made under this Act and may impose such terms and conditions as it thinks fit as a condition under which that exemption is granted. An exemption so granted may be revoked or varied by the Board at any time.

(2) In dealing with an application under this section, the Board shall not be required to act judicially and its decision shall in all cases be final.

(3) Any exemption or condition imposed pursuant to subsection 1 of this section, shall take effect as from the date to be decided by the Monetary Board in its discretion.

(4) Notwithstanding anything contained in subsection (1) of this section the Board shall not exempt any Bank unless the business to be carried on by that Bank relates solely to the extending of a loan to the Crown.

PART I
LICENSING OF BANKS

3. Licence required to conduct banking business - (1) No banking business shall be transacted in the Cook Islands whether or not such business is carried on in the Cook Islands except by a person who is in possession of a licence issued by the Board authorising such person to carry on such business.

(2) Every person who contravenes the provisions of this section shall be guilty of an offence and liable on conviction to a fine not exceeding two thousand dollars or to a term of imprisonment not exceeding one year or to both such fine and imprisonment and in the case of a continuing offence to an additional fine not exceeding two hundred dollars for each day during which the offence continues.

4. Application to be made to Board - Any person desirous of carrying on banking business in the Cook Islands shall make application to the Board for a licence so to do. Every such application shall be in writing and shall be accompanied by such references information and particulars as shall be prescribed and the Board may if satisfied that the carrying on of such business by the applicant will not be against the public interest issue a licence subject to such terms and conditions as the Board may deem necessary or advisable.

5. Public interest to be considered - (1) Whenever it considers it to be in the public interest so to do the Board may refuse to grant a licence.

(2) [Spent]

6. Principal office and officers to be stated - (1) A licence shall not be granted to any bank having its head office or its registered office outside the Cook Islands unless such bank designates and notifies to the Board -

(a) a principal office in the Cook Islands;

(b) by name one of its officers who is to be the authorised agent of the bank in the Cook Islands; and

(c) by name another of its officers who in the absence or inability to act of the officer named under paragraph (b) of this subsection is to be the authorised agent of the bank in the Cook Islands.

(2) It shall be a condition of every licence granted to a bank to which subsection (1) of this section applies that the bank shall forthwith notify the Board in writing of any change of -

(a) its principal office in the Cook Islands; or

(b) either or both the officers designated pursuant to paragraphs (b) or (c) of subsection (1) of this section.

7. Amendment and revocation of licence - (1) The Board may amend add to or vary any licence at any time and from time to time.

(2) The Board may revoke any licence -

(a) if the bank has ceased to carry on banking business; or

(b) if the bank goes into liquidation or is wound up or otherwise dissolved except for the purposes of amalgamation or reconstruction; or

(c) in the circumstances and in the manner provided for in section 10 of this Act.

8. Information to be supplied to Board - It shall be a term of any licence pursuant to this Act that the licensee shall furnish to the Board such information and particulars in relation to the licensee's banking business as the Board shall require and at such times as may be prescribed provided that nothing in this section shall authorise the Board to require the licensee to disclose any information which in accordance with accepted banking practice a banker is not obliged to disclose without the consent of the customer concerned.

9. Keeping and audit of accounts - (1) Every licensee shall cause full and faithful accounts to be kept of all money received and disbursed and of all assets and liabilities and of all profits and losses in respect of the operations of the licensee within or from the Cook Islands.

(2) An annual balance sheet and statement of accounts of the licensee in respect of its business in the Cook Islands shall be audited by an auditor who shall be a member of the New Zealand Society of Accountants and shall be certified by such auditor and transmitted to the Board not later than three months after the end of each financial year of the licensee.

10. Powers of the Board - If in the opinion of the Board a licensee is carrying on its business in the Cook Islands in contravention of the provisions of this or any other Act or of any Order licence or regulation made under this Act the Board may from time to time as may to it seem necessary require the licensee forthwith to take such steps as it may require to rectify the matter or may make an order revoking the licence of such licensee and requiring its business in the Cook Islands to be wound up.

11. Use of the word "bank" and other words - (1) Except with the approval of the Board no person other than a licensee shall-

(a) use or continue to use the words "bank", "savings" or "savings and loan" or any of their derivatives either in English or Maori or any other language in the description or title under which such person is carrying on business from or within the Cook Islands;

(b) make or continue to make any representation in any billhead letter letterhead circular paper notice advertisement or in any other manner whatsoever that such person is carrying on banking business;

(c) in any manner whatsoever solicit or receive deposits from the public.

(2) Before giving its approval under subsection (1) of this section the Board may require of any person such references and such other information and particulars as may be prescribed.

(3) Whenever it considers it to be in the public interest the Board may withdraw any approval given under subsection (1) of this section.

(4)The Board may refuse to grant a licence to a bank or if such bank is already in possession of a licence it may revoke such licence if in its opinion such bank is carrying on or intending to carry on banking business as the case may be under a name which -

(a) is identical with that of any other person, firm or business house whether within the Cook Islands or not or which so nearly resembles that name as to be calculated to deceive; or

(b) is calculated to suggest falsely the patronage of or connection with some person in authority

(5) Every person who contravenes the provisions of this section shall be guilty of an offence against this Act end shall be liable on conviction to a fine not exceeding two thousand dollars or to a term of imprisonment not exceeding one year or to both such fine and imprisonment and in the case of a continuing offence to an additional fine not exceeding two hundred dollars for each day during which the offence continues.

12. Appeal - (1) An appeal shall lie to the Court from any decision of the Board -

(a) Amending, adding to or varying any licence pursuant to section 7 subsection (1) of this Act;

(b) Revoking a licence pursuant to subsection (2) of section 7, section 10 or section 11 of this Act;

(c) Withdrawing any approval under section 11 subsection (3) of this Act; or

(d) Requiring a licensee to take certain steps which the Board may specify under section 10 of this Act.

(2) An appeal against the decision of the Board shall be on motion. The appellant within twenty-one days after the day on which the Board has given its decision shall serve on the Advocate General a notice in writing signed by the appellant or his counsel or Attorney of his intention to appeal and of the grounds of the appeal:

Provided that any person aggrieved by the decision of the Board may upon notice to the Advocate General apply to the Court for leave to extend the time within which the notice of appeal prescribed by this section may be served, and the Court upon hearing of such application may extend the time prescribed by this section as it deems fit.

(3) The Advocate General shall upon receiving the notice of appeal transmit to the Registrar of the Court without delay a copy of the Board's decision and all papers relating to the appeal:

Provided that the Advocate General shall not be compelled to disclose any information if he considers that the public interest would suffer by such disclosure.

(4) The Registrar shall set the appeal down for argument on such day, and shall cause notice of the same to be published in such manner, as the Court may direct.

(5) At the hearing of the appeal the appellant shall, before going into the case, state all the grounds of appeal on which he intends to rely and shall not, unless by leave of the Court, go into any matters not raised by such statement.

(6) The Court may adjourn the hearing of the appeal and may upon hearing thereof confirm, reverse, vary or modify the decision of the Board or remit the matter with the opinion of the Court thereon to the Board.

(7) An appeal against a decision of the Board shall not have the effect of suspending the execution of such decision unless the Minister or the Court on application so directs.

(8) Any notice required to be given to the Advocate General pursuant to this section shall be sufficiently given if delivered to the office of the Advocate General at Rarotonga.

13. Saving power of Audit Office to inspect accounts - Nothing herein shall limit the power of the Auditor of the Cook Islands Government Account under the authority of any Act for the time being in force relating to the public revenues of the Cook Islands to inspect the account of a private person in any bank if the Auditor declares that he has reason to believe and does believe that money the property of Her Majesty or of the Government of the Cook Islands or of any public body whose accounts he is by law required to audit have been fraudulently or wrongfully paid into the private account of such person.

14. Mode of proof of entries in books - (1) Subject to the provisions of section, a copy of any entry in the books of a bank shall in all legal proceedings be received as prima facie evidence of such entry, and of the matters, transactions, and accounts therein recorded.

(2) Such copy shall not be received in evidence under this Act unless it is first proved -

(a) that the book was at the time of the making of the entry one of the ordinary books of the bank, and that the entry was made in the usual and ordinary course of business, and that the book is in the custody or control of the bank; which proof may be given either orally or by affidavit by an officer of the bank; and

(b) that the copy has been examined with the original entry and is correct; which proof shall be given either orally or by affidavit by some person who has examined the copy with the original entry.

(3) Any affidavit for the purposes of this section may be sworn before any person authorised to take affidavits.

15. When books not compellable to be produced - An officer of a bank shall not, in any legal proceedings to which the bank is not a party, be compellable either to produce any book of the bank the contents of which can be proved as aforesaid, or to appear as witness to prove the matters, transactions, and accounts therein recorded, unless by order of a Judge made for special cause.

16. Court or Judge may order inspection - (1) On the application of any party to a legal proceeding a Court or Judge may, on summons, order that such party be at liberty to inspect and take copies of any entries in the books of a bank for any of the purposes of such proceeding.

(2) An order under this section shall be served on the bank three clear days before the same is to be obeyed, unless the Court or Judge directs otherwise.

(3) Sunday, and any bank holiday, shall be excluded from the computation of time under this section.

(4) The costs of any application to the Court or Judge under or for the purposes of this section, and the costs of anything done or to be done under an order of a Court or Judge made under or for the purposes of this section, shall be in the discretion of the Court or Judge.

(5) Where any such costs have been occasioned by any default or delay on the part of the bank, the Court or Judge may order that the same or any part thereof be paid to any party by the bank.

(6) Any such order against the bank may be enforced as if the bank were a party to the proceeding.

17. Post Office Savings Bank - This Act shall not apply to the Post Office Savings Bank.

18. Destruction of cheques and other documents - (1) All cheques and bank drafts drawn on a bank and in the possession of the bank and all bills of exchange or promissory notes in the possession of a bank and made payable at the bank, may be destroyed by the bank after the expiration of seven years from the date thereof in the case of documents payable on demand, or from the due date thereof in the case of all other documents.

(2) No such document shall be destroyed under the authority of this section at any time after a demand for the delivery of such document has been made to the bank by the person entitled thereto.

19. Stamp duties - Notwithstanding anything to the contrary in any Act, Ordinance or Regulation whether passed or made before or after the commencement of this Act no stamp duty or revenue duty shall be payable on any bill of exchange, promissory note or other negotiable instrument, whether drawn or made within the Cook Islands or outside the Cook Islands.

20. Bank not to issue bank notes - No bank licensed pursuant to this Ac shall issue bank notes in the Cook Islands.

21. Sections 645 and 646 of the Cook Islands Act 1915 not to apply to transactions - Sections 645 and 646 of the Cook Islands Act 1915 shall not apply to any contract or security made with or given to a bank duly licensed pursuant to this Act provided there shall appear on the document evidencing such contract or security a certificate in the prescribed form signed by an interpreter approved by the Registrar of the High Court that such contract or security has been interpreted to the native concerned and that he appears to understand and appreciate fully the meaning and effect thereof.

22. Regulations - (1) The High Commissioner may from time to time by Order in Executive Council and upon notice in the Cook Islands Gazette make all such regulations as may be deemed necessary or expedient to give full effect to the provisions of this Act and for the due administration thereof. Such notice shall be sufficient if it states the regulations have been made and gives the place where copies of them can be obtained.

(2) Without limiting the general power hereinbefore conferred it is hereby declared that regulations may be made under this section for all or any of the following purposes -

(a) prescribing the times and days of the week in which banks may be open to conduct banking business;

(b) prescribing the days on which banks may close as bank holidays and the public notice thereof;

(c) prescribing conditions of approval of interpreters by the Registrar of the High Court, forms of certificates by interpreters and fees payable to interpreters in respect thereof;

(d) prescribing the rates of interest chargeable by or payable by banks.

(3) All regulations made under this section shall be laid before the Legislative Assembly within twenty-eight days after the date of the making thereof if the Legislative Assembly is then in session, and, if not, shall be laid before the Legislative Assembly within twenty-eight days after the date of the commencement of the next ensuing session.

23. Repeal - Section 13 of the Cook Islands Amendment Act 1921 is hereby repealed.

PART II
EXCHANGE CONTROL

24. Control of overseas exchange and other transactions- (1) Whereas it is the sovereign right of Her Majesty the Queen as Head of State of the Cook Islands to control currency and credit in the public interest and whereas it is desirable that the High Commissioner be empowered by Order in Executive Council to make regulations for safeguarding the credit overseas resources or development of the Cook Islands now therefore it is hereby enacted that in addition to any other power to make regulations conferred by this Act the High Commissioner may from time to time by Order in Executive Council if he is satisfied that it is necessary so to do for the purpose of safeguarding in the public interest the credit overseas resources or development of the Cook Islands make regulations providing for the prohibition, restriction, regulation and control of overseas exchange transactions and other transactions affecting or likely to affect at any time the overseas resources of the Cook Islands.

(2) Without limiting the generality of subsection (1) of this section, regulations may be made for the purposes of that subsection in respect of all or any of the following matters:

(a) The taking, sending, or transfer of money or securities to or from the Cook Islands;

(b) The registration of securities in the names of, or the issue, transfer, or delivery of securities to, or the furnishing of information, in relation to the ownership or acquisition of or control over securities or rights or interests therein by persons not ordinarily resident in the Cook Islands, or companies that are under the effective control of such persons or of bodies corporate incorporated outside the Cook Islands, or nominees, trustees, or agents of such persons or of such companies or bodies corporate; or the transfer to overseas registers of securities;

(c) The commencement of business in the Cook Islands by companies incorporated outside the Cook Islands;

(d) The disposal of foreign currency and foreign securities accruing to, held by, or at the disposal of persons resident, whether permanently or temporarily, in the Cook Islands;

(e) Any dealing or transaction having the effect of a purchase, borrowing, sale, loan, or exchange of foreign currency or foreign securities;

(f) The consideration for, and methods of settlement for, exports (including re-exports) from and imports into the Cook Islands, and the disposal of the overseas proceeds of exports and re-exports;

(g) The acquisition, surrender, transfer, disposition, or provision of, or other dealings in, property, goods, money, securities, services, or work, or rights or interests in respect of any such things, or any other benefit, in the Cook Islands in consideration in whole or in part for the acquisition, surrender, transfer, disposition, or provision of, or other dealings in, property, goods, money, securities, services, or work, or rights or interests in respect of any such things or any other benefit, outside the Cook Islands; or any arrangement or transaction having the like effect.

(3) Any regulation made for the purposes of paragraph (a) of subsection (2) of this section may provide-

(a) For the search, by authorised officers, of persons about to depart from the Cook Islands;

(b) For the production to authorised officers of money or securities that such persons have with them;

(c) For the examination and search, by authorised officers, of articles that such persons have or are taking with them, and the examination and search of ships and aircraft, for the purpose of discovering any money or securities;

(d) For the examination and search, by authorised officers, of articles or goods consigned or otherwise taken or sent from the Cook Islands to a destination outside the Cook Islands, for the purpose of discovering whether there are being sent with such articles or goods any money or securities;

(e) For the seizure, by authorised officers, of money or securities so produced or discovered, unless such officers are satisfied that the taking or sending thereof does not involve a contravention of the regulations;

(f) For the forfeiture of money or securities so seized.

(4) For the purposes of this section, unless the context otherwise requires, -

"Authorised officer", in relation to any matter, means any officer or agent of the Cook Islands Government acting or employed in that matter with the written authority of the Board, and any officer of Customs within the meaning of the Customs Act 1913 and its amendments, and any member of the Police;

"Foreign currency" means the bank notes or other currency, postal notes, or money orders of any country other than the Cook Islands pr New Zealand; and includes promissory notes and bills of exchange payable otherwise than in New Zealand currency;

"Foreign securities" means -

(a) Any security in respect of which the principal is repayable, or interest is payable, in any country other than the Cook Islands or in any foreign currency; and

(b) Any security registered or inscribed or situated outside the Cook Islands; and

(c) Any security issued by a body corporate having its head office outside the Cook Islands, whether or not the security is registered or inscribed on a register in the Cook Islands and includes -

(d) Gold situated outside the Cook Islands; and

(e) Any debt or money due or accruing due to, or any sum held in any account for, a person in the Cook Islands by a person outside the Cook Islands; and

(f) Any right to receive payment of any sum of money in any country other than the Cook Islands; and

(g) Any right to receive payment of any amount of foreign currency;

"Gold" includes gold coin, gold bullion, retorted gold, gold ores, gold amalgam, gold alloys; precipitates containing gold, slag, concentrates, tailings, and residues; but, with the exception of gold coin, does not include things manufactured of gold;

"Head office", in relation to a body corporate, mean,, the centre of its administrative management;

"Money" includes the bank notes and other currency; postal notes, and money orders of New Zealand and the Cook Islands or any other country; and also includes promissory notes and bills of exchange;

"Person" includes a corporation sole and also a body of persons, whether incorporated or not;

"Securities" includes shares, stock, bonds, debentures debenture stock, mortgages, liens, treasury bills, coupons or warrants representing dividends or interest, and life or endowment insurance policies, in whatever currency the securities are expressed and whether they are situated in New Zealand or the Cook Islands or elsewhere; and also includes any document or means whereby the right to the ownership or provision of any money or security, or any interest therein, may be exercised; but does not include promissory notes or bills of exchange.

(5) For the purposes of this section, an individual shall be deemed to be ordinarily resident in the Cook Islands at any time if at that time -

(a) He is domiciled in the Cook Islands; or

(b) He is residing in the Cook Islands and his usual place of abode is, and has been for the immediately preceding period of twelve months, in the Cook Islands whether or not he has been occasionally or temporarily absent from the Cook Islands during that period.

(6) For the purposes of this section -

Where any body corporate incorporated outside the Cook Islands and carrying on business through a branch or branches in the Cook Islands does not have its head office in the Cook Islands, each such branch shall be deemed to be a separate person and shall, together with the person in the Cook Islands for the time being having control of the business in the Cook Islands, be deemed to be ordinarily resident in the Cook Islands, and such persons shall is respect of the branch be jointly and severally liable accordingly; but nothing in this paragraph shall be construed to relieve the body corporate from any obligation or liability to any penalty under this Act or under any regulations made under this Act.

(7) For the purposes of this section, any reference to the transfer of any authority includes a reference to a transfer of the security by way of loan, mortgage, pledge, or bailment, whether in respect of a legal or an equitable interest.

(8) For the purposes of this section -

(a) Money shall be deemed to be taken or sent if it is taken or sent by telegraph or post or by means of any draft, letter of credit, traveller's cheque, or transfer of account, or by any means whatsoever; and

(b) The making, in respect of a person who is not ordinarily resident in the Cook Islands, of a book entry whose effect is either to create a credit overseas, or to extinguish a debit overseas, in the name of a person who is ordinarily resident in the Cook Islands shall be deemed to be the taking or sending of money out of the Cook Islands.

--------------------------------------------------