Section 1: In this Act, unless the context otherwise requires -

"administrative penalty" includes - (a) fines, including interest, payable to the Central Bank under this Act, (b) the removal from office of any director, officer or employee by the Central Bank; (c) withdrawal of any privilege normally accorded to banks or financial holding companies by the Central Bank; (d) withdrawal of a "fit and proper" person’s status previously accorded by the Central Bank; or (e) such other sanctions as the Central Bank may by regulations, directives or guidelines prescribe; "advisor" means a person appointed by a written order from the Central Bank to advise the chief executive of a bank or financial holding company; "affiliate" means- (a) a body corporate of which the bank or financial holding company is a subsidiary; (b) a subsidiary of the bank or financial holding (c) a body corporate which is controlled by the same entity which controls a bank or a financial holding company. "agent" means a person that is engaged by a bank or a financial holding company to provide specific financial services on its behalf or a person that is engaged by the Central Bank to provide specific services; "applicant" means a body corporate; "associate" means a body corporate over which a bank or financial holding company has the power to participate in its financial or operating decisions but which does not control or jointly control its governance policy; "bail-in" means write-down of the liabilities of a bank or conversion into equity with-out the consent of shareholders or creditors and specifically excludes insured and secured claims; "bank" means a body corporate licensed by the Central Bank to carry on banking business in accordance with this Act; "banking business'' or the business of banking includes- (a) accepting deposits from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, order, or by any other means; (b) the financing whether in whole or in part or by way of short, medium or long term loans or advances; or (c) any other financial activities prescribed by the Central Bank; 2 3 Interpretation. "beneficial owner" means a person or body corporate that enjoys the benefit of ownership even though the title of the property owned is in another name; "branch" means an office of a bank that is not separately incorporated through which a bank may be permitted to engage in banking business; "bridge bank" means temporary national bank established to take ownership of part or all of an institution to bridge the lapse between failure and final resolution; "bridge institution" is an institution established by the government or the Central Bank for a temporary period for the purpose of resolving a bank in official administration, or to an asset management vehicle established by thegovernment for the purpose of acquiring, managing, and disposing of problem assets of a bank as part of the resolution of the bank; "capital base" means the sum of tier 1 capital and eligible amount of tier 2 capital, prescribed by the Central Bank; "capital adequacy ratio" means the ratio expressed as a percentage of the adjusted capital base to the risk weighted financial exposure; "capitalised expenditure" includes preliminary expenses, share selling commission, brokerage losses incurred by the bank and any other item of expenditure not represented by tangible assets; "Central Bank" means the Bank of Sierra Leone; 4 5 "chief executive" means a person who is responsible, subject to the authority of the Board of directors of a body corporate, for the conduct and management of the day to day business of that body corporate; "close relative" means spouse, son, daughter, step son, step daughter, brother, sister, father, mother, cousin, nephew, niece, aunt, uncle, step sister, step brother, grandparent or grandchild; "control" "controlling shares" or "shareholding" mean a relationship wherein a person or a group of persons acting in concert, directly or indirectly- (a) owns 50% or more of the voting shares of a body corporate; (b) has power to appoint or remove the majority of the Board of directors of a body corporate; (c) has the ability to exert a significant influence on the management or policies of the body corporate; or (d) has the ability to direct the activities of the body corporate as to affect the financial returns on any investment made with such body corporate; "Court" means a Court of competent jurisdiction; "credit exposure" means the amount at risk from a claim or transaction of a bank, whether on or off-balance sheet, and whether contingent or actual, including extensions of credit facilities, credit openings, letters of credit, credit commitments, advances, guarantees, acceptances, debt securities, as well as investments by a bank; "corporate group" means a company and the affiliates or associates of that company; "deposit" means a sum of money paid on terms under which it will be repaid, with or without interest or a premium, and either on demand or at an agreed time under the legal and contractual conditions applicable and not referable to the provision of property or services or the giving of security; "Deposit Protection Fund" means a deposit protection fund set up to provide for the accumulation of financial contributions from banks and branch offices of foreign banks for eventual compensation of deposits held in banks and branch offices of foreign banks and for their management; "director" in relation to a bank, includes a person carrying out or empowered to carry out substantially the same functions as those carried out by a director of a company registered under the Companies Act, 2009 or a director of a cooperative society registered under the Cooperative Societies Act, 1977; "direction" means a legally binding directive of the Central Bank issued to a specific bank, all banks, financial holding company, or any particular group thereof, in the implementation of this Act; "emolument" means salaries and allowances other than performance related earnings; "employee" means staff of a bank or financial holding "examination" includes the carrying out of on-site, off- site, credit reporting and any other examination as may be determined by the Central Bank including the Anti-MoneyLaundering Act, 2012 or any other law; "executive officer" means- (a) the chief executive officer, chief financial officer, chief operating officer, chief risk officer, chief internal auditor, chief compliance officer, and chief accounting officer of a bank; (b) any other person who participates or has authority to participate in major policy making or functions of the bank, whether or not such person has an official title or receives compensation for such actions, and is designated as an executive officer by the Central Bank; "exempted persons' means persons to whom the restrictions on the conduct of banking business and deposit-taking does not apply including friendly societies whose total deposits remain less than an amount prescribed by the Central Bank; "financial exposure" in relation to a bank or financial holding company or with respect to a person means, the aggregate of the loans, advances, placements, and credit facilities including off-balance sheet obligations given to that person, and the value of the holdings by that bank or financial holding company of shares and debentures and other debt securities issued by that person; 6 7 "financial holding company" means a body corporate or an entity that confirms and controls a bank; "financial company" means a person, including a bank that primarily engages in one or more of the permissible banking activities referred to in section 16 and any other activities as prescribed by the central bank; "financial group" means a bank, financial holding company, financial company and its subsidiaries, affiliates and associates, as the case may be; "finance leasing" means a contract between two parties whereby a lessor gives the lessee possession and use of a specific asset (or portfolio of assets) in consideration for payment of rentals over a given period in which the lessor retains ownership or title with the intention to transfer ownership of these assets to the lessee upon termination of the finance lease; "fit and proper person" means a person who is suitable to hold the particular position which that person holds or is to hold with regard to - (a) the probity, competence and soundness of judgment of the person for purposes of fulfilling the responsibilities of that position; (b) the diligence with which that person fulfils or is likely to fulfil those responsibilities; (c) whether the interest of depositors or potential depositors of the entity are threatened, or likely to be, in any way threatened by the person holding that position; (d) the integrity and the qualifications and experience of the person are appropriate for the position in the light of the business plan and activities of the entity which the person serves, or is likely to serve, taking into account the size, nature and complexity of the institution; and (e) any other criteria that may be stipulated by the Central Bank; "financial institution" means an institution subject to regulation and supervision by the Central Bank under this Act or any other enactment; "financial services" means any service, including banking business, prescribed as such by the Central Bank; "foreign bank" means a bank licensed in another country; "foreign financial holding company" means a financial holding company registered or authorised in another country; "foreign supervisory authority" means the relevant supervisory authority in the country where the foreign bank has its principal place of business; "home supervisory authority" means the supervisory authority in the country in which the bank or financial holding company is licensed or registered; 8 9 "independent director" means a director who is free of management and shareholders influence and whose judgment will be exercised for the sole benefit of the bankorfinancial holding company and who has no perceived or actual conflict of interest arising from relationshipswith thebank, financial holding company and with bank and financial holding company-related parties whether present, past or future and other relevant facts and circumstances; "insider" means a director, key management personnel, all other employees or significant shareholder of a bankor financial holding company; "insolvent or insolvency" means a bank or financial holding company that is unable to meet its obligations as they fall due or the value of its liabilities exceeds the value of its assets; "key management personnel" includes the chief executive, deputy chief executive, chief operating officer, chief finance officer, board secretary, treasurer, chief internal auditor, the chief risk officer, the head of compliance, the head of anti-money laundering functions, the head of internal control functions, chief legal officer, chief technical officer, manager of a significant business unit of a bank, or financial holding company or any person with similar responsibilities; "licence" means an authorisation granted by Central Bank to a body corporate for the purpose of carrying out banking business; "management letter" means a formal letter from the auditor addressed to a financial institution on the weaknesses identified in the operations of that financial institution during the audit; "minimum paid-up capital" includes- (a) initial funds required to start-up a bank; and (b) the operational start-up costs,as may be prescribed by the Central Bank but excludes expenses incurred in employing capital; "money" means any regulated and generally accepted medium of financial exchange, as prescribed by the Central Bank, which can be used as a legal tender for the repayment of debt; a store of purchasing power, a standard of value and a unit of accounting measure; "net-own funds" means the sum total of share capital that has been - (a) paid-up; (b) free reserves but excludes revaluation reserves; and (c) the statutory reserve fund subject to netting out accumulated losses, goodwill and unwritten-off capitalised expenditure including pre-operating expenses and deferred tax; "non-financial company" means a person that primarily engages in commercial, industrial or agricultural activities; "non-interest banking" means the practice of banking business in conformity with Islamic finance; "non-performing asset" means a credit exposure or asset classified as non-performing by the Central Bank; 10 11 "non-preferential" means upon terms no more favourable than those which would be offered under prevailing conditions to all clients and customers of a bank or financial holding company; "official administrator" means a person appointed by the Central Bank to carry out official administration of a bank or financial holding company as prescribed under this Act; "off balance sheet transactions" includes contingent assets, contingent liabilities in the form of letters of credit,guarantees, bids, bonds and indemnities; "paid-up capital" includes minimum capital, additional fully paid-upshares, and the capitalisation of income surplus; "person" includes an individual, a body corporate or association of body of persons whether or not incorporated; "prescribe" means prescribed by regulations, rules, directives or guidelines issued by the Central Bank; "place of business" means any branch, agency, office, outlet, cash point, mobile office, or booth of a bank that is open to the public; "public interest" includes a right or advantage which ensures or is intended to ensure the general benefit of the people of Sierra Leone; "purchase and assumption" means an agreement in which a part or -the whole of the assets of the fail-ed bank are purchased and all or some of the liabilities are assumed by an acquiring bank; "receivership" means the process of revoking the charter of a failing bank and appointing a receiver- (a) to continue with the closing function of a failed institution; (b) to liquidate the failed institution's remaining assets; and (c) to distribute any proceeds of the liquidation to the Central Bank, to the failed institution's customers who had uninsured deposit amounts, to general creditors, and to others with approved claims; "resolution" means the process of - (a) valuing a failing institution; (b) marketing the failing institution to healthy institutions; (c) soliciting and accepting bids for the sale of some or all of the institution's assets and assumption of deposits (including some liabilities); (d) determining which bid is least costly to the deposit insurance fund; and (e) working with the assuming institution through the closing process (or ensuring the payment of insured deposits in the event there is no acquirer); "related person" means a bank or financial holding company's subsidiaries, affiliates and any party including- 12 13 (a) their subsidiaries, affiliates and special purpose entities that the bank or financial holding company exerts control over or that exerts control over the bank or financial (b) the bank or financial holding company's controlling shareholders, Board Members, senior management and key staff and their direct or related interests; and (c) their close relatives as well as corresponding persons in affiliated companies; "representative office" in relation to a bank incorporated overseas means premises from which the banking business or other financial activity of the overseas bank are promoted in any way; "registration" means an authorisation granted by a Central Bank to a financial holding company pursuant to this Act; "regulation" means a legally binding directive adopted by the Central Bank and applied to all banks in the implementation of this Act; "resident non-executive director" means nonexecutive director residing in Sierra Leone; "significant shareholding" means a direct or indirect holding in a bank or financial holding company which represents 5% or more of - (a) the paid-up capital; (b) the voting rights; or (c) which makes it possible to exercise a significant influence over the management of the bank or financial holding company in which a holding subsists; "significantly under-capitalised" means a capital position that is less than 50% of the capital adequacy ratio requirements prescribed by the Central Bank; "statutory reserve fund" means the statutory reserve fund required to be maintained by a bank or financial holding company under subsection (1) of section 30; "subsidiary" means a body corporate over which another body corporate has control; "Tier 1 Capital" means permanent shareholders' equity in the form of issued and fully paid-up shares plus all disclosed reserves, perpetual non-cumulative preference shares and retained earnings, less goodwilland any other intangible assets, as may be prescribed by the Central Bank; "Tier 2 Capital" means general provisions which are held against future and current unidentified losses and are freely available to meet losses which subsequently materialize, and includes subordinated debt, cumulative and redeemable preferred stock, revaluation reserves on fixed assets, and any other form of capital, as prescribed by the Central Bank; "under-capitalised" means any capital position below the Minimum Capital Adequacy Ratio requirement; 14 15 No. 6 The Banking Act 2019No. 6 The Banking Act 201916 17 "unsecured advances or credit facilities" means- (a) loans or credit facilities made without security, (b) part of loans or credit facilities made in excess of the market value of the security pledged; or (c) loans or credit facilities which the Central Bank deems that no market value exists for the security pledged.