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Reserve Bank of Vanuatu (Amendment) Act 2009

Commencement: 04 May 2009

REPUBLIC OF VANUATU

RESERVE BANK OF VANUATU (AMENDMENT)
ACT NO. 9 OF 2009

Arrangement of Sections

1. Amendment
2. Commencement

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REPUBLIC OF VANUATU

Assent: 22/04/2009
Commencement: 04/05/2009

RESERVE BANK OF VANUATU (AMENDMENT)
ACT NO. 9 OF 2009

An Act to amend the Reserve Bank of Vanuatu Act [CAP 125].

Be it enacted by the President and Parliament as follows-

1 Amendment

The Reserve Bank of Vanuatu Act [CAP 125] is amended as set out in the Schedule.

2 Commencement

This Act commences on the day on which it is published in the Gazette.

SCHEDULE

AMENDMENTS OF RESERVE BANK OF VANUATU ACT [CAP 125]

1 Subsection 5 (4)

Delete all the words from and including ”non-interest”, to and including “paid- up capital” (second occurring), substitute “current market related interest rate security, or securities, with defined maturity term.

2 Sections 6 and 6A

Repeal the sections, substitute

“6 Net Profit

(1) The net profit of the Reserve Bank for any financial year shall be determined by the application of International Financial Reporting Standards (IFRS) and current best central bank practice.

(2) For the purposes of subsection (1), net income includes both realized and unrealized gains and losses except that for prudency, only realized gains should be available for distribution.”

3 Subsection 7(2)

Repeal the subsection, substitute

“(2) After allocations have been made to the General Reserve under subsection (1), the Board may set up other special retain earning reserves from time to time as it thinks fit.

(2A) The reserves under subsection (2) may be built up by net unrealized gains in relation to foreign exchange or securities, market price fluctuations in the bank’s financial assets.

(2B) Any subsequent realized components may be distributed to the bank’s retained earnings or to the Government as dividends.”

4 Subsection 8(3)

(a) Delete “four” substitute “five”

5 Paragraph 8(3)(b)

Repeal the paragraph, substitute

“(b) the Director General of the Ministry of Finance or his or her nominee;

6 Paragraph 8 (3) (c)

Delete “two”, substitute “three”

7 Subsection 8 (4)

Repeal the subsection, substitute

“(4) The members of the Board referred to in paragraphs 3(b) and 3(c) are to be appointed by the Minister and must have the following criteria:

(a) degree in finance, management or other related field from a recognised university; and

(b) relevant working experience in finance , management or other related field; and

(c) competent in carrying out their responsibilities under the Act.

8 Subsection 8(4A)

Repeal the subsection, substitute

“(4A) The Minister may remove a member from the Board who does not meet the criteria in subsection (4).”

9 Subsection 8(5)

Delete “The Chairperson”, substitute “The Governor who is the Chairperson”

10 Subsection 9(2)

Delete “Two”, substitute “Three”

11 After section 11

Insert

“11A Allowances

(1) Subject to subsection (2), the members of the Board other than the Chairperson are entitled to a sitting allowance of not more than VT15, 000 for each day in which the Board sits for a meeting.

(2) A member of the Board who holds office, ex officio or who is a public servant appointed under the Public Service Act [CAP 246] is not entitled to a sitting allowance if the Board meets during the normal working hours.

12 Section 25

Repeal the section.

13 Paragraph 35(1) (h)

After “payments” insert “and other economical statistics”

14 After section 35

Insert

“35A Bi-annual Monetary Statement

The Reserve Bank must publish a monetary policy statement of the Bank at least once on March and September of each Calendar year.

15 PART 9- ACCOUNTS, AUDIT AND REPORTS

Repeal the heading, substitute

“PART 9 ACCOUNTS, AUDIT AND REPORTS TO ACCOUNTING AND AUDITING”

16 Section 39

Repeal the section, substitute

“39 Financial year and approval of budget

(1) The financial year of the Reserve Bank is the same as the financial year of the Government.

(2) The Board is to approve the annual Reserve Bank budget and may publicly report the actual and budgeted data if it thinks appropriate.”

17 After subsection 40(1)

Insert

“(1A) The appointment made under subsection (1) is for a period of 5 years.”

18 After section 40

Insert

“40 A Audit Committee

(1) The Audit Committee of the Reserve Bank is established.

(2) The Committee consists of 4 members who are to be appointed for a period of 3 years by the Governor after consultation with the Minister.

(3) The following persons are to be members of the Committee:

(a) the Deputy Governor, ex officio;

(b) a board member other than the Governor;

(c) a senior manager of a government statutory body, a private accounting firm or a bank;

(d) a senior head of the department within the Reserve Bank other than the head of the department of Accounts and Internal Audit.

(4) The Governor must appoint from amongst the members, other than the Deputy Governor, the Chairperson of the Committee.

(5) The Committee has the following functions:

(a) to assist the Governor and the Board to carry out their functions under the Reserve Bank Act [CAP 125]; and

(b) to assess the internal audit performance in complying with internal control and audit objectives of the Internal Audit Charter.

(6) The Committee is to meet at least once every 3 months.

(7) The quorum at a meeting of the Committee is 3 members present at a meeting.

(8) If a decision cannot be reached by consensus in a meeting, the matter is to be determined by a majority vote of the members who are present and voting.

(9) If the vote is equal, the Chairperson presiding at the meeting has a casting vote.

(10) The Committee may require any person within the Reserve Bank to provide any information to assist the Committee to carry out its function under this section.

(11) A Committee member other than the Deputy Governor or a senior officer of the Reserve Bank is entitled to a sitting allowance of not more than VT10, 000 for each day in which the Committee sits for a meeting.”