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| Title: | The Financial Institutions Act No. 23 of 1973 and how it has affected the participation of Lesotho's commercial banks in the process of economic development |
| Author: | Kabi, Mokhele |
| Year: | 1992 |
| Periodical: | Lesotho Law Journal: A Journal of Law and Development (ISSN 0255-6472) |
| Volume: | 8 |
| Issue: | 1 |
| Pages: | 175-206 |
| Language: | English |
| Notes: | biblio. refs. |
| Geographic terms: | Lesotho Southern Africa |
| Subjects: | banking economic development banking law Economics, Commerce Lesotho. Financial Institutions Act (1973) commercial banks Financial institutions |
| Abstract: | Lesotho's Financial Institutions Act was enacted in 1973 and became effective on 1 September 1974. The Act had two major aims: to provide a legislative framework within which financial institutions in Lesotho would be regulated and controlled, and to ensure that these institutions channelled locally mobilized savings into nationally beneficial investment projects. The article first outlines some of Lesotho's developmental goals and strategies and the role of commercial banks therein, and reviews the main features of banking in Lesotho. It then examines the legal controls of the Financial Institutions Act in detail. Controls designed for the protection of depositors include requirements relating to licensing, minimum share capital, the keeping of a special reserve fund and prescribed liquidity levels, and the control of management and financial records. There are also controls limiting the freedom of commercial banks in undertaking certain transactions, controls relating to winding up and merging, controls limiting the repatriation of profits and the maintenance of a prescribed minimum amount of local assets. Finally, the article assesses the Act's impact on the stated goals of economic development and general regulation and concludes that, sixteen years after its enactment, no major change has occurred. App., notes, ref. |