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BANK FINANCE AND REGULATION Multi-Jurisdictional Survey BANK DEPOSIT GUARANTEE SCHEME

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  WORTELS LEXUS

QUESTIONNAIRE

PART I – GENERAL CHARACTERISTICS OF THE SCHEME

1. Does a bank deposit guarantee scheme exist in your jurisdiction?

We do not have a bank deposit guarantee scheme in Mauritius. Experience in the past does in fact calls for a remedy of similar nature.
Delphis Bank stepped into the shoes of BCCI which in turn recently changed into Bank One where fortunately the customers were not made to suffer. The Licence of the Union International Bank was revoked in mid nineties. In the latter case more that Rupees 16.5 million (1 USD = Rs 31) were embezzled with the complicity of some of the Bank Managers as per the criminal matter which was lodged before our Intermediate Criminal Court. The Mauritius Cooperative Central Bank turned out what is now the Mauritius Post and Cooperative Bank and all these changes have not occurred without creating chaotic situation in Mauritius with its 1.2 million inhabitants. It is urgent that such a scheme be established.
Our Central Bank, the Bank of Mauritius only intervenes to control inflation and it has since mid June 2010 decided to increase the Cash Reserve Ratio from 4, 5 % to 5% and this has resulted in removing Rupees 3 billion from the money market.

2. If the answer to question 1 above is negative, please explain whether bank deposits are or may be somehow secured / guaranteed in your jurisdiction.

It cannot be said that the bank deposits are secured or guaranteed as such should the business of a bank result into bankruptcy. We do not have a scheme specifically designed for that purpose and what would ultimately happen is that the Central Bank would put pressure on the bank to ensure that the amount so deposited are paid back to the customers.
Should on the other hand Insolvency proceedings be instituted against that bank, the ranking of the creditors would prevail and our laws are silent in that respect.

Potayya, S. 2011, BANK FINANCE AND REGULATION Multi-Jurisdictional Survey BANK DEPOSIT GUARANTEE SCHEME.