Disqualification of officers
1. Any person who is a member of the board, manager, or other officer, concerned with the management of a financial institution shall cases to hold office;
a) if he becomes bankrupt or suspends payments;
if he is convicted in a court of law of a crime or any offense involving fraud or dishonesty.
2. No person who has been a member of the board of, or directly or indirectly concerned in, the management of a financial institution the license of which has been revoked shall, without the approval of the Central Bank, act or continue to act as a member of the board of, or be directly or indirectly concerned in, the management of any financial institution.
3) Any person dulling in contravention of sub-Section (1) or (2) is guilty of an offense and shall be liable on conviction in court of law to imprisonment for a term not exceeding (two years) or to a fine not exceeding (two million Somali Shillings) or to both such imprisonment and such fine.
Conflicts of interest with respect to officers
1. Every member of the board of a local financial institutions who is in any manner whatsoever, whether directly or indirectly, interested in an advance from that institution shall as soon as possible declare the nature of his interest to the board directors or other body responsible for the management of that institution and shall cause such declaration to be circulated forthwith to all of the members of its board.
2. The requirement of sub-Section (1) shall not apply where the interest of the member of the board consists only of being a creditor of, or holder of any ownership interest in, a concern which is interested in an advance from that institution if, in either case, the interest of the member of the board may properly be regarded as not being a substantial interest.
3. For the purpose of sub-Section (1) a declaration by a member of the board of a local financial institution to the effect that he I is to be regarded as interested in any advance, which may, after the date of the notice, be made by that institution shall be deemed to be a sufficient declaration of interest in relation to any advance so made if:
a) it specifies the nature extent of his interest and
b) his interest shall not be different in nature from or great in extent than, the nature and extent so specified in such notice at the time any advance is made.
4. Every member of the board of a local financial institution who holds any office or possesses any property whereby, whether directly or indirectly, duties or interests might be created in conflict with his duties or interests as a member of the board shall declare at a mottling of the members of the board of the institution the fact and the nature, character and extent of the conflict.
5. The declaration referred to in sub-Section (4) shall be made at the first meeting of the members of the board held.
a) after he becomes a member of the board of the institution or
if already a member of the board, after he commences to hold office or to possess the property.
6. Every member of the board of a local financial institution who qualifies as an interested member of the board under the provisions of this Article shall cause to be brought up and read any declaration made under sub-Section (1) or under sub-Section (4) at the next meeting of the members of the board after it is given, and shall cause to be recorded any declaration made under this Article in the minutes of the meeting at which it was made or at which it was brought up and read.
7. Any member of the board who acts in contravention of sub-Section (1) or sub-Section (4) is guilty of an offense and shall be liable on conviction in a court of law to imprisonment for a term not exceeding (one year) or to a fine not exceeding (5.000.000) Somali Shillings), or to both such imprisonment and such fine.
Penalties for default by officers
Any member of the board, officer, employee or agent of a financial institution who:
a) with intent to deceive:
i) makes any false or misleading statement or entry.
ii) omits any statement or entry that should be made in any book, account, report, or statement of the financial institution; or
b) obstructs or endeavors to obstruct:
i) the proper performance by an auditor of his duties in accordance with the provisions of this Law, or
ii) a lawful examination of the financial institution by a duly
authorized examiner appointed by the Central Bank.
is guilty of an offense and shall be liable on conviction in a court of law to imprisonment for a term not exceeding (two years) or a fine not exceeding (two million Somali Shillings) or to both such imprisonment and such fine.
Other penalties for officers
Any member of the board, manager, or other officer concerned in the management of a financial institution who:
a) falls to take all reasonable steps to secure compliance by the institution with the requirements of this Law, or
b) is implicated in an offense committed under Article 29, is guilty of an offense and shall be liable on conviction in a court of law to imprisonment for not more than (two years) or to a fine not exceeding (two million Somali Shillings) or to both such imprisonment and fine.
Penalties for receiving deposits while insolvent
1. It shall be in lawful for any financial institution to receive any deposit while insolvent, or for a member of the board or other officer or employee who knows or, in the proper performance of his duty should know, of such insolvency to receive or to authorize the acceptance of such deposit.
2. Every person who violates sub-Section (1) is guilty of an offense and shall be liable on conviction in a court of law to imprisonment for a term not exceeding (one year) or to a fine not exceeding (5.000.000 Somali Shillings), or to both such imprisonment and such fine.
Inability to sign
In all transactions connected with the opening of, deposit into or withdrawal from, any account, whenever the depositor is unable to sign, his thumb impression affixed in the presence of an officer of the financial institution shall have the same legal effect as if it were the depositor's signature.
Protection of customer's privacy
1. Nothing in this Law shall authorize enquiry to be made into the affairs of any individual customer of a financial institution.
2. The Central Bank shall not, unless lawfully required to do so by any court of law, reveal to any person any information as to the affairs of any individual customer of a financial institution obtained in the exercise of its regulatory jurisdiction: Provided, that this provision shall not operate as a bar to communication by the Central Bank in accordance with Article 25.
3. The Central Bank may publish in whole or in part at such times it may determine any information or data furnished under this Law: Provided, that no information or data shall be published which might disclose the individual affairs of a financial institution, or of a customer of such an institution unless the consent of every interested party has been obtained in writing prior to such publication.
1. The Central Bank may, by regulation, declare days upon which no financial institution may be open for business with the public, without regard to whether or not such days are not also public holidays.
2. All financial institutions shall remain open for business with the public during hours agreed to by the Central Bank on all days other than those referred to in sub-Section (1).
3. Any private obligation which can only be fulfilled at a financial institution and which would fall due on any day or at any particular hour on which such institution is to open for business under sub-Section (1) or (2) shall be deemed to fall due on the first business day after the expiration of the day of closure.
1. The following items held or owing by a financial institution, unless subject to sub-Section (2). are presumed to be abandoned:
a) any general deposit (demand, savings or matured time deposit) made in Somalia with a financial institution, together with any interest or dividend, excluding any lawful charges;
b) any funds paid in Somalia toward the purchase of shares or order interests in a financial institution, together with any interest or dividend, excluding any lawful charges;
c) any sum payable on cheque certified in Somalia or on written instruments issued in Somalia on which a financial institution is directly liable;
d) any contents of a safe deposit box upon which the lease or rental period has expired and concerning which notice of the institution's intent to deliver said contents into the custody of the Central Bank has been sent by registered letter to the last known address of the lessee and to which the lessee has failed to respond within (one) year.
2) The items enumerated in sub-Section (1) (a) through (c) shall not be presumed to be abandoned if the owner has, within (fifteen) years of the date of deposit, payment of funds, or issuance of instrument, as the case may be:
a) increased or decreased the amount of the deposit or funds or presented the passbook or other record for the crediting of interest or dividends in respect of the items enumerated in sub-Section (1) (a) or (b);
b) corresponded in writing with the financial institution concerning the items;
c) Otherwise indicated an interest in the items as evidenced by a memorandum concerning them written by the financial institution.
Delivering abandoned property to the Central Bank
1. Every financial institution holding any of the items enumerated in Article 35 annually shall report such holding to the Central Bank, and thereafter pay in deliver to it all abandoned property listed in the report in accordance with regulations which the Central Bank shall prescribe. Upon paying in delivering abandoned property into the custody of the Central Bank, a financial institution shall be released of all liability to the extent of the value of the property for any claim in respect thereof.
2 The Central Bank shall follow the provisions of the law of wheat escheat in respect of the disposition of all abandoned property paid or delivered to it.
Penalties for failure to deliver abandoned property
Any financial institution which willfully, fails to file the report or to pay or deliver property presumed to be abandoned into the custody of the Central Bank in accordance with Article 36 (1) is guilty of an offense and it and the members of its board shall be liable on conviction in a court of law to imprisonment for a term not exceeding (one year) or to a fine not exceeding (5.000.000 Somali Shillings) or to both imprisonment and fine.
The Regional Court of the Region in which an office was committee shall have jurisdiction of violations committed under this Law; and it shall be the duty of the (Attorney General) to institute proceedings to prevent and restraint such violations and to prosecute offenses committed under this Law. Before issuing any final decree the Court may at any time during the course of the proceedings make such temporary restraining order of prohibition as it shall deem just under the circumstances.
The Central Bank may issue such regulations as may be required from time to time for giving effect to the provisions of this Law.
Repealing of Laws
The following Law are repealed: Law of 14 August.1963. No. 18.
Mogadishu. 23 Nov. 1989.
The President of SDR
(Mohamed Siad Barre)