Credit Unions Act


Published: 1978

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Credit Unions Act


1988 Revised Edition






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CREDIT UNIONS ACT

Credit Unions Act CAP. 107 Arrangement of Sections




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CREDIT UNIONS ACT

Arrangement of Sections
Section
1 Short title..........................................................................................................7
2 Interpretation....................................................................................................7
3 Appointment of Registrar of Credit Unions.....................................................7
4 Register to be kept. ..........................................................................................8
5 Memorandum of association............................................................................8
6 Contracts of memorandum...............................................................................8
7 Registration. .....................................................................................................8
8 Incorporation of credit union with limited liability. ........................................8
9 Publication of notice of registration.................................................................9
10 Restriction on name. ........................................................................................9
11 By-laws. ...........................................................................................................9
12 Capitalisation. ..................................................................................................9
13 Shares, how purchased...................................................................................10
14 Dividends. ......................................................................................................10
15 Transfer of shares...........................................................................................10
16 Objects. ..........................................................................................................10
17 Powers............................................................................................................10
18 Land. ..............................................................................................................11
19 Entrance fee. ..................................................................................................11
20 Change of registered office. ...........................................................................11
21 Meetings.........................................................................................................11
22 Election of directors and committees.............................................................11
23 Removal of directors and committee members..............................................12
24 Appointment of officers. ................................................................................12
25 Remuneration.................................................................................................12
26 Records of Registrar. .....................................................................................13

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27 Duties of Directors. ........................................................................................13
28 Credit committees and loan officers...............................................................13
29 Purpose of loans. ............................................................................................14
30 Security of loan. .............................................................................................14
31 Restrictions.....................................................................................................14
32 Prohibitions. ...................................................................................................14
33 Interest rates. ..................................................................................................14
34 Repayment......................................................................................................14
35 Duties of supervisory committee....................................................................14
36 Borrowing powers. .........................................................................................15
37 Powers of hypothecation. ...............................................................................15
38 Reserve fund...................................................................................................15
39 Procedure for payment of dividend. ...............................................................16
40 Members limited to groups. ...........................................................................16
41 Minors. ...........................................................................................................16
42 Register of members.......................................................................................17
43 Expulsion of member. ....................................................................................17
44 Withdrawal of member...................................................................................18
45 Payments upon death, withdrawal or expulsion of a member........................18
46 Effect of expulsion or withdrawal. .................................................................18
47 Officers etc. not to withdraw or to transfer shares. ........................................18
48 Voting.............................................................................................................18
49 Fiscal year. .....................................................................................................18
50 Federation of Credit Unions. ..........................................................................19
51 Security by officers. .......................................................................................19
52 By-laws binding. ............................................................................................19
53 Debts due by members. ..................................................................................20
54 Shareholders entitled to receive copies of accounts. ......................................20
55 Other returns...................................................................................................20
56 Form of documents.........................................................................................20
57 Examination of affairs. ...................................................................................20
58 Reference by Registrar to Minister. ...............................................................21
59 Information from the Bank.............................................................................21
60 Offences. ........................................................................................................21
61 Liability of Officers and directors. .................................................................21
62 Prohibition of use of words “Credit Union”...................................................22
63 General penalty. .............................................................................................22
64 Consent of Registrar required to amalgamation.............................................22
65 Application for consent to amalgamation. .....................................................22
66 Vote on application for consent to amalgamation..........................................22
67 Procedure for amalgamation etc.....................................................................23
68 Transfer of liabilities etc. to credit union formed by amalgamation. .............23
69 Disputes as to assets and liabilities.................................................................23
70 Cancellation of registration. ...........................................................................23
71 Dissolution. ....................................................................................................24

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72 Liability of members in winding up...............................................................24
73 Provisions as to instrument of dissolution. ....................................................25
74 Income tax......................................................................................................26
75 Appeal. ...........................................................................................................26
76 Fees payable to Registrar. ..............................................................................26
77 Disposal of fees..............................................................................................26


FIRST SCHEDULE 27

MEMORANDUM OF ASSOCIATION ...............................................................27

SECOND SCHEDULE 28

CERTIFICATE OF INCORPORATION.............................................................28

Credit Unions Act CAP. 107 Section 1




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CREDIT UNIONS ACT

Acts 4 of 1977 and 9 of 1983

AN ACT TO REGULATE CREDIT UNIONS

Commencement [31st May 1978]

1 Short title.
This Act may be cited as the Credit Unions Act.

2 Interpretation.
In this Act unless the context otherwise requires —

“Minister” means the Minister of Labour, Commerce and Industries;

“Registrar” means the Registrar of Credit Unions.

3 Appointment of Registrar of Credit Unions.
The Minister shall appoint a person to administer this Act and such person shall
be called the Registrar of Credit Unions, and may appoint persons to assist such
Registrar and may, by special or general order in the Gazette confer on any such
persons all or any of the powers of the Registrar under this Act. (Amended by
Act 9 of 1983.)

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4 Register to be kept.
The Registrar shall keep a register of all credit unions registered under this Act.

5 Memorandum of association.
(1) Any 15 or more persons resident in the Kingdom who desire to associate

themselves together as a credit union for the objects hereinafter set forth,
may, in the presence of a witness, sign in duplicate a memorandum of
association, and cause it to be filed in the office of the Registrar. Such
memorandum of association, printed or typewritten, shall be in the form in
the First Schedule to this Act and there shall be attached to the
memorandum an affidavit verifying the signatures to such memorandum.

(2) Such persons, after signing the memorandum of association, shall appoint
a provisional secretary who shall hold office until a secretary is appointed
in accordance with section 24 of this Act.

6 Contracts of memorandum.
The memorandum of association shall state —

(a) the name of the credit union;
(b) the group of persons to whom membership shall be limited;
(c) the address in the Kingdom at which the registered office of the

credit union is to be situated;
(d) the par value of its shares;
(e) the names and addresses of the subscribers to the memorandum, the

number of shares subscribed by each and the qualification of each
within the group to which membership is limited.

7 Registration.
On the memorandum of association being filed the Registrar, if he is satisfied
the registration is advisable and in particular that the group to which
membership is limited is such as to ensure reasonable personal contact amongst
the members, shall register the credit union upon payment of a registration fee of
$4.00 and shall issue to the provisional secretary a certificate of incorporation in
the form in the Second Schedule to this Act.

8 Incorporation of credit union with limited liability.
The registration of a credit union shall render it a body corporate by the name
under which it is registered, by which it may sue and be sued, with perpetual

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succession and a common seal and with limited liability; and shall vest in the
credit union all property for the time being vested in any person in trust for the
credit union; and all legal proceedings pending by or against the trustees of any
such credit union may be prosecuted by or against the credit union in its
registered name without abatement.

9 Publication of notice of registration.
The Registrar shall cause a notice of registration under the preceding section to
be published in the Gazette.

10 Restriction on name.
No credit union shall be registered under a name identical with that by which
any other existing credit union has been registered, or so nearly resembling the
same as to be likely to deceive, and the words “Credit Union Limited” shall be
the last words of the name of every credit union registered under this Act.
(Amended by Act 9 of 1983.)

11 By-laws.
(1) The Registrar shall prepare and submit for approval by the Minister

standard by-laws not inconsistent with this Act, which shall apply subject
as hereinafter provided to every Credit Union registered hereunder.

(2) The Registrar shall supply a copy of the standard by-laws to any person
bona fide applying therefore for any purpose relating to a credit union or
the proposed formation of a credit union.

(3) A credit union may by a two-third vote of the members present at an
annual general meeting or at a special general meeting called for the
purpose make by-laws for the credit union to be known as supplementary
by-laws. Such supplementary by-laws may be in addition to, or in
amendment or repeal of, any standard by-laws but no supplementary by-
laws shall be of any effect until the same have been approved by the
Minister. Supplementary by-laws may provide for fines not exceeding $2
for failure to make repayments on loans and payments on shares
when due.

12 Capitalisation.
The capital of every credit union shall be unlimited in amount and shall be
divided into shares of a par value of not less than $2 each.

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13 Shares, how purchased.
The shares may be purchased outright or by instalments in such manner as may
be determined by by-laws.

14 Dividends.
A shareholder shall receive dividends only on fully paid up shares.

15 Transfer of shares.
(1) Subject to the other provisions of this section and to the by-laws, shares

may be assigned, transferred or withdrawn by the holder.

(2) Shares may only be assigned or transferred to a member of the credit
union.

(3) No assignment, transfer or withdrawal shall be valid unless approved by
the directors elected in accordance with section 22 of this Act; but such
approval shall not be unreasonably withheld.

(4) No assignment, transfer or withdrawal shall be approved by the directors
if the total number of shareholders is thereby reduced below 15.

16 Objects.
The objects of a credit union shall be —

(a) to promote thrift among its members;
(b) to receive the savings of its members as payment on shares;
(c) to make loans to members exclusively for provident or

productive purposes.

17 Powers.
(1) For the purpose of carrying out its objects, a credit union may, subject to

the provisions of this Act —
(a) deposit money in any bank in the Kingdom;
(b) invest in any security or local loan of the Government of the

Kingdom of Tonga;
(c) borrow money as hereinafter provided;
(d) insure its loans, funds and property against loss;

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(e) draw, make, accept, endorse, execute and issue promissory notes,
bills of exchange, bills of lading, warrants and other negotiable or
transferable instruments;

(f) do all such other acts and things as are incidental or conducive to or
consequential upon the attainment of its objects.

(2) Notwithstanding any provision in subsection (1) hereof or elsewhere in
this Act, no credit union shall remit or authorise the remittance of any
money to any place outside the Kingdom for any purpose whatsoever
except with the approval of Cabinet.

18 Land.
A credit union may in its own name hold or take on lease any land, and may
exchange, mortgage or lease the same.

19 Entrance fee.
A credit union may charge an entrance fee not exceeding that authorized by the
by-laws.

20 Change of registered office.
A credit union may change its registered office on written notice to the
Registrar.

21 Meetings.
(1) There shall be an annual general meeting at such time as the by-laws may

provide.

(2) Special general meetings may be called in the way and manner provided
by the by-laws.

(3) Within 10 days after receipt by the provisional secretary of the certificate
of incorporation, he shall notify each of the applicants for incorporation
that the certificate has been received, and shall call a meeting of the credit
union for the organization thereof which shall be deemed to be the annual
general meeting for that year.

22 Election of directors and committees.
(1) At the first annual general meeting the credit union shall elect a board of

directors of not less than 5 members, a credit committee of not less than 3
members and a supervisory committee of 3 members.

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(2) One half of the members of the board and of each of the committees
aforesaid shall go out of office in each year and their successors shall be
elected at the annual general meeting. Where the number of members of
the board or of either of the committees aforesaid is not evenly divisible
by 2, the number of members of the board or of such committee to go out
of office shall be half the number next below the number of members of
the board or committee.

(3) The members of the Board or a committee to go out of office shall be
those members who have been longest in office without re-election and in
the case of equality shall be determined by ballot.

(4) Any retiring member shall be eligible for re-election.

(5) No director or member of the credit committee shall be a member of the
supervisory committee.

23 Removal of directors and committee members.
A special general meeting convened for the purpose may remove a director, a
member of the credit committee or a member of the supervisory committee
before the expiration of their term of office, by majority of three-fourths of the
members present, who shall proceed at the same meeting to the election of
others in their stead who shall hold office until the next annual general meeting
at which replacement directors or committee members shall be elected. (Inserted
by Act 9 of 1983.)

24 Appointment of officers.
At their first meeting, which shall be held within 10 days after their election, the
directors shall appoint from their own number a president and a vice-president,
and shall appoint a secretary and a treasurer or a secretary-treasurer, who may
not be a director.

25 Remuneration.
No member of the board of directors or of the credit committee or supervisory
committee shall, as such, receive remuneration, but the secretary and the
treasurer or the secretary-treasurer may be paid such salaries as the members of
the board of directors may determine at any annual or special meeting.

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26 Records of Registrar.
A record of the names and addresses of the directors, the members of the
committees and of the officers shall be filed with the Registrar within 10 days
after election or appointment.

27 Duties of Directors.
Subject to the provisions of this Act the directors shall have the general
management of the affairs of a credit union and in particular shall —

(a) act on applications for membership and on the expulsion of
members;

(b) determine the maximum individual shareholdings and the
maximum individual loan which may be made with or
without security;

(c) determine interest rates on loans;
(d) declare dividends;
(e) fix the form and amount of the security which shall be required

from officers and employees handling money;
(f) fill casual vacancies in the board of directors and in the credit

committee until the election of successors at the next annual
general meeting;

(g) perform such other duties as are required by this Act or by the
by laws.

28 Credit committees and loan officers.
(1) The Credit Committee shall have the general supervision of all loans to

members and subject to any general order of the board and the provisions
of this Act shall fix the amount of, and rate of interest on, each loan.

(2) No loan shall be approved except by a majority decision of all the
members of the credit committee.

(3) A credit committee may delegate its functions to a loan officer to be
appointed thereby. Such loan officer may grant loans of amounts which
shall not exceed $100, subject to and in accordance with any directions
given to him by the credit committee, upon the security of the
unencumbered shares of any member or members of the same credit
union.

(4) Where a loan officer has made a loan not in accordance with the
provisions of the last preceding subsection or of any written directions
given to him by the credit committee, the loan officer shall be personally

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liable to refund to the credit union the amount of such loan which shall be
deemed to be a debt due by him thereto.

29 Purpose of loans.
Every loan shall be for a provident or productive purpose.

30 Security of loan.
(1) The credit committee shall require security to be given on all loans in

excess of an amount to be fixed by the Registrar.

(2) The credit committee shall determine the security and guarantors which
shall be required for each loan and the conditions of repayment.

31 Restrictions.
No director, officer or member of the credit or supervisory committee shall be
allowed to borrow in excess of the value of his shares except upon the approval
of the majority of all the members of the board of directors, a majority of the
credit committee and supervisory committee, sitting together, the said director,
officer or member not being present when vote is taken.

32 Prohibitions.
No credit union shall lend money to or accept deposits from any person who is
not a member of the credit union, but this section shall not limit the powers
contained in paragraphs (a) and (b) of section 17 of this Act.

33 Interest rates.
The interest rate on any loan made by a credit union shall not exceed one per
centum per month on the unpaid balance of such loan; provided that the
minimum amount of interest charged shall be 10 seniti per month.

34 Repayment.
A borrower may repay his loan in whole or in part on any day on which the
office of the credit union is open for business.

35 Duties of supervisory committee.
The supervisory committee shall —

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(a) make an examination of the affairs of the credit union at least
quarterly and audit its books and if deemed necessary by them, call
a special general meeting of the credit union for consideration of
the report of the supervisory committee;

(b) make or provide for an annual audit and submit a report thereon to
the annual meeting;

(c) fill casual vacancies in its own membership until the next annual
meeting and successors are chosen;

(d) if deemed necessary and by unanimous vote, suspend any officer,
and call a meeting of the credit union to consider their report on
such suspension;

(e) call a special general meeting to consider any matter or matters,
which in their opinion, should be placed before the credit union.

36 Borrowing powers.
(1) Subject to the other provisions of this section a credit union may borrow

moneys for the carrying out of its objects and functions.

(2) A credit union shall not borrow any money so that the total indebtedness
of the credit union in respect of borrowings exceeds 50 per centum of the
paid up value of the issued capital.

(3) No money shall be borrowed by a credit union save upon a resolution by
the directors.

(4) Where any borrowing would make the total indebtedness of the credit
union in respect of borrowings exceed 25 per centum of the paid up value
of the issued capital, the resolution of the directors to borrow such money
shall require confirmation either by a vote of not less than three-quarters
of the members present at a general meeting duly called for considering
such resolution or by the unanimous sanction in writing of the members of
the credit union.

37 Powers of hypothecation.
A credit union may charge, hypothecate, mortgage or pledge its real or personal
property to secure any liability for the repayment of moneys borrowed in
pursuance of a resolution passed under section 36.

38 Reserve fund.
(1) Every credit union shall have a reserve fund into which shall be paid all

entrance fees and fines.

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(2) The directors shall at the end of each financial year before declaring any
dividend set aside for payment into the reserve fund not less than 20 per
centum of the net earnings for that year: Provided that the directors shall
not be required to set aside for or to pay into reserve fund any sum which
would make the amount of the reserve fund exceed 10 per centum of the
sum of the deposits and the issued capital of the credit union for the time
being.

(3) The moneys in the reserve fund may be invested in the same manner as
other moneys of the credit union but any interest or dividend on such
investments shall be paid to the general revenue of the credit union.

(4) The reserve fund shall be held as a reserve against bad loans or losses
other than operating deficits and shall not be used for any other purpose
except on liquidation.

39 Procedure for payment of dividend.
After making provision for the reserve fund, as required by section 38, the board
of directors may declare a dividend from the remainder of the net earnings and
in such case shall present its resolution to the annual meeting of the credit union
for confirmation. Any dividend authorized at that meeting shall be paid on all
shares fully paid up and in the possession of the same member throughout the
previous fiscal year, except that shares which become fully paid up during the
previous fiscal year shall be entitled to a proportionate part of such dividend
from the first day of the month following such payment in full. In no case shall
the dividend declared by the credit union exceed 6 per centum per annum of its
net earnings for any fiscal year.

40 Members limited to groups.
(1) The membership of a credit union shall be limited to groups of persons

having a common bond of occupation or association or to groups of
persons residing within a well defined neighbourhood, community, rural
or urban district.

(2) A person admitted to membership shall not exercise any of the rights of a
member until he has subscribed to one share and has paid an amount
thereon not less than the initial instalment provided by the by-laws.

41 Minors.
(1) A minor may be a member, provided that a minor shall not vote until he

has reached the age of 18 years, nor shall he be elected as a director or as
a member of the credit committee or supervisory committee until he has
attained the age of 21 years.

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(2) The minority of any person duly admitted as a member of any credit union
shall not debar that person from executing any instrument or giving any
acquittance necessary to be executed or given under this Act, and shall not
be a ground for invalidating or avoiding any contract entered into by any
such person with the credit union; and any such contract entered into by
any such person with the credit union, whether as principal or as surety
shall be enforceable at law by or against such person notwithstanding his
minority.

42 Register of members.
A register, or list of shareholders, shall be kept by every credit union. Such
register shall show and shall be prima facie evidence of —

(a) the names, addresses and occupations of the shareholders, the
number of shares held by them respectively, the number of such
shares and the amount paid or considered as paid thereon;

(b) the date on which each shareholder was registered;
(c) the date at which any shareholder ceased to be such.

43 Expulsion of member.
(1) The board of directors may by a two-thirds vote, at a meeting duly called,

expel a member from the credit union.

(2) The secretary shall within 5 days from the date on which the member is
expelled, notify him in writing of the action of the board of directors.

(3) An appeal from the action of the board of directors may be taken by the
member to the next general meeting of the credit union: Provided that
written notice of intention to appeal shall be given by him to the secretary
within 30 days from the date of receipt of the notice mentioned in
subsection (2) of this section.

(4) At such meeting a majority of the members present may confirm or
rescind the action of the board of directors.

(5) The expulsion of a member shall take effect —
(a) where no notice of appeal has been given within the time for

appealing, upon the expiration of such time;
(b) where an appeal has been made, upon the date of confirmation by

the members at the general meeting.

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44 Withdrawal of member.
A member may withdraw from the credit union at any time on giving such
notice of withdrawal as may be required by the by-laws.

45 Payments upon death, withdrawal or expulsion of a member.
All amounts paid in on shares by a member who is expelled or withdraws from
the credit union or who dies and any relative dividends or interest shall be paid
to him or in the case of death to his personal representative as funds become
available and after deducting all amounts due from him to the credit union. Any
shares paid off under this section shall for the purpose of paragraph (e) of
section 72 of this Act be deemed to have been withdrawn by a notice given on
the date of such expulsion, withdrawal or death, as the case may be.

46 Effect of expulsion or withdrawal.
A member who is expelled or withdraws shall have no further rights in the credit
union but shall not, by such expulsion or withdrawal, be released from any
remaining liability to the credit union.

47 Officers etc. not to withdraw or to transfer shares.
No member entrusted with or participating in the direct management of the
affairs of the credit union shall withdraw or transfer or otherwise dispose of his
shares, during the exercise of his functions. In case of insolvency of the credit
union any such withdrawal or transfer made by him within 4 months preceding
such insolvency shall be null and void. Such member shall remain liable to
creditors of the credit union to the extent of such shares so disposed of or
transferred.

48 Voting.
No member shall have more than one vote at any meeting and no member may
vote by proxy.

49 Fiscal year.
The financial year of a credit union shall end on the thirty-first day of March in
each year or on such other date as the by-laws may provide.

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50 Federation of Credit Unions.
(1) Credit Unions incorporated or registered under this Act that desire to

associate as a federation for the furtherance of their common interests and
the benefit of their members may execute in duplicate, under seal and
attested by the hands of their proper officers, a memorandum of
association and if such memorandum is approved by the Registrar of
Credit Unions, cause it to be filed in the office of the Registrar.

(2) The memorandum of association shall state the name of the federation, the
par value of the shares, the objects of the federation, the place at which its
registered office will be situated, the names and addresses of the
subscribers to the memorandum of association and the names of the credit
unions which they respectively represent and shall be accompanied by a
copy of the by-laws by which the federation is to be governed and such
other documentary evidence as the Registrar may require.

(3) If the Registrar approves of incorporation he shall endorse upon both
copies of the memorandum of association a certificate of incorporation
and such endorsement shall be conclusive evidence of incorporation under
this Act.

(4) The Registrar shall cause a notice of the incorporation to be published in
the Gazette.

(5) From the date of the certificate of incorporation the credit unions on
whose behalf application has been made for incorporation in the
memorandum of association and such other credit unions as from time to
time become members shall be a body corporate by the name contained in
the memorandum and the provisions of this Act shall apply mutatis
mutandis to federation.

51 Security by officers.
Every person appointed to an office touching the receipt, management or
expenditure of money for the purposes of a credit union shall, before entering
upon the duties of his office, give such security as is deemed sufficient by the
directors, which security may be varied in amount or renewed from time to time.

52 By-laws binding.
The by-laws of a credit union shall bind the credit union and the members
thereof to the same extent as if each member had subscribed his name and
affixed his seal thereto and there were in such by-laws a covenant on the part of
himself, his heirs, executors and administrators to conform to such by-laws
subject to the provisions of this Act.

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53 Debts due by members.
(1) All moneys payable to a credit union by a member shall be a debt due

from him to the credit union and shall be recoverable as such in any court
of competent jurisdiction.

(2) The credit union shall have a lien on the shares of a member, past member
or deceased member for any sum due from him to the credit union and for
any loan endorsed by him.

54 Shareholders entitled to receive copies of accounts.
Every credit union shall, within one month of receiving an application to that
effect and without charge, supply to any shareholder so applying a copy of the
accounts of the credit union giving details of receipts and expenditure and the
assets and liabilities thereof in respect of the financial year immediately prior to
the date of such application.

55 Other returns.
Every credit union shall furnish the Registrar with such information as he may
from time to time require.

56 Form of documents.
Every document required for the purpose of this Act and the books of accounts
kept by credit unions shall be in such form as the Registrar may prescribe.

57 Examination of affairs.
(1) The affairs of any credit union —

(a) may be examined by or under the direction of the Registrar, at any
time; or

(b) shall be examined by or under the direction of the Registrar
whenever he suspects fraud or other irregularity, and in either of
such cases the credit union shall produce all books, documents and
other papers required by the person conducting the examination.

(2) The cost of any examination carried out under the provisions of this
section shall be borne by the credit union.

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58 Reference by Registrar to Minister.
(1) Where as a result of an examination of affairs carried out under section 57

the Registrar is of opinion that the board of directors, the supervisory
committee or the credit committee of the credit union is not performing its
duties properly he may refer the matter to the Minister in writing.

(2) The Minister shall inform the credit union in writing of the action he
proposes to take and unless cause to the contrary is shown by the credit
union within 14 days of the date of the Minister's letter the Registrar shall
take such action as directed by the Minister. (Inserted by Act 9 of 1983.)

59 Information from the Bank.
Notwithstanding anything in any other written law, the Registrar may, where he
considers it necessary to do so, require any bank —

(a) to furnish any information regarding the transactions of any
registered credit union with the bank;

(b) to produce a copy showing the account of the credit union with the
bank from the ledger kept by the bank;

(c) to produce any cheques paid to the credit of the credit union or
endorsed by the credit union.

(Inserted by Act 9 of 1983.)

60 Offences.
It shall be an offence against this Act if any credit union —

(a) fails to give any notice, send any document, or do or allow to be
done any act or thing which the credit union is by this Act required
to give, send, do or allow to be done;

(b) wilfully neglects or refuses to do any act or to furnish any
information required for the purposes of this Act by the Registrar or
any other official or person whose duties require him to obtain the
information, or does any act or thing forbidden by this Act;

(c) wilfully furnishes information in any respect false or insufficient.

61 Liability of Officers and directors.
Every offence by a credit union shall be deemed to have been also committed by
every officer of the credit union who is bound by the by-laws thereof to fulfil the
duties whereof such an offence is in breach or, if there are no such officers, then
by each of the directors and members of the credit and supervisory committees,

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unless such officer, director or member of committee is proved to have been
ignorant of or to have attempted to prevent the commission of such offence.

62 Prohibition of use of words “Credit Union”.
(1) No person other than a credit union shall trade or carry on business under

any name or title of which the words “Credit Union” is part: Provided that
nothing in this section shall apply to the use by any person or his
successors in interest of any name or title under which he traded or carried
on business at the commencement of this Act.

(2) Any person who contravenes the provisions of this section shall be guilty
of an offence and liable on conviction to a fine not exceeding $50 and in
the case of a continuing offence to a further fine not exceeding $2 for each
day during which the offence continues.

63 General penalty.
Any person guilty of an offence against this Act for which no specified penalty
is provided shall be liable on conviction to a fine not exceeding $50 and, in the
case of a continuing offence, to a fine not exceeding $2 for each day during
which such offence continues.

64 Consent of Registrar required to amalgamation.
Save with the consent of the Registrar, no Credit Union shall amalgamate with
another credit union.

65 Application for consent to amalgamation.
(1) Where two or more credit unions desire to amalgamate as one credit

union, an application shall be made to the Registrar for his consent to the
amalgamation.

(2) Every application made under the provisions of the last preceding
subsection shall be signed by the president and one other director of each
credit union and shall be accompanied by 3 copies of any proposed
supplementary by-laws of the credit union to be formed by the intended
amalgamation.

66 Vote on application for consent to amalgamation.
No application under the provisions of the last preceding section for the consent
of the Registrar to the amalgamation of any registered credit union shall be made

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unless, in the case of each credit union desiring amalgamation, the proposal for
amalgamation is passed by a majority of not less than two-thirds of all the
members of such credit union.

67 Procedure for amalgamation etc.
No credit unions shall be amalgamated as one credit union unless the notice in
writing of the consent of the Registrar to the amalgamation has been posed at the
registered office of each of the credit unions party to the amalgamation and in
every branch thereof for a period of not less than 14 days.

68 Transfer of liabilities etc. to credit union formed by amalgamation.
(1) All deeds, bonds, agreements and instruments to which any credit union

that is amalgamated with any other credit union was a party that are
subsisting at the time of the amalgamation shall be of as full force and
effect against or in favour of the credit union formed by the amalgamation
as if, instead of such credit union, the credit union so formed and had been
named therein or had been a party thereto.

(2) Where, in respect of any credit union that has amalgamated with any other
credit union, any proceedings or cause of action was pending or existing
or existed at the time of amalgamation, the same may be continued or
enforced by or against the credit union formed by the amalgamation.

69 Disputes as to assets and liabilities.
In the event of any dispute arising concerning the assets or liabilities of any
credit union amalgamating with any other credit union, such dispute shall be
referred to a referee to be appointed by the Registrar for the purpose, in which
event the decision of such referee shall be final and conclusive.

70 Cancellation of registration.
(1) Subject to the approval of the Minister the Registrar may by order cancel

the registration of a credit union if satisfied that —
(a) the incorporation of the credit union was obtained by fraud or

mistake; or
(b) the credit union exists for an illegal purpose; or
(c) the number of members has been reduced to less than 15; or
(d) the credit union is not carrying on business or is not in operation; or
(e) the credit union has wilfully, after notice by the Registrar, violated

any of the provisions of this Act.

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(2) The Registrar shall give the credit union not less than two months' notice
of proposed cancellation, specifying the reason therefor and stating that,
unless cause is shown to the contrary within the said period, the
registration will be cancelled.

(3) At the expiration of the time mentioned in the notice the Registrar may,
unless cause to the contrary is previously shown by the credit union,
cancel the registration. In such case the Registrar shall publish notice
thereof in the Gazette, whereupon the credit union shall be dissolved.

(4) A credit union whose registration has been cancelled shall from the date
of publication in the Gazette of the notice of cancellation absolutely cease
to enjoy as such the privileges of a credit union but without prejudice to
any liability incurred by such credit union which may be enforced against
the same as if such cancellation had not taken place.

71 Dissolution.
A credit union may be dissolved —

(a) by an order of the court to wind up the credit union or a resolution
by the members for the winding up thereof, made as directed in
regard to companies by the Companies Act the provisions whereof
shall apply to any such order or resolution except that the term
“Registrar” shall for the purposes of such winding up have the
meaning given to it by this Act; or

(b) by the consent of three-fourths of the members testified by their
signatures to an instrument of dissolution.

72 Liability of members in winding up.
Where a credit union is wound up in pursuance of an order or resolution the
liability of a present or past member of the credit union to contribute for
payment of the debts and liabilities of the credit union, the expenses of winding-
up, and the adjustment of the rights of contributories amongst themselves, shall
be qualified as follows: —

(a) No person who has ceased to be a member for one year or upwards
prior to the commencement of the winding-up, shall be liable to
contribute;

(b) No person shall be liable to contribute in respect of any debt or
liability contracted after he ceased to be a member;

(c) No person, not a member, shall be liable to contribute unless it
appears to the court that the contributions of the existing members
are insufficient to satisfy the just demands on the credit union;

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(d) No contribution shall be required from any person exceeding the
amount, if any, unpaid on the shares in respect of which he is liable
as a past or present member;

(e) A person shall be taken to have ceased to be a member, in respect
of any withdrawable share withdrawn, from the date of the notice or
application for withdrawal.

73 Provisions as to instrument of dissolution.
Where a credit union is terminated by an instrument of dissolution: —

(a) the instrument of dissolution shall set forth the liabilities and assets
of the credit union in detail, the number of members and the nature
of their interests in the credit union respectively, the claims of
creditors (if any) and the provisions to be made for their payment,
and the intended appropriation or division of the funds and property
of the credit union, unless the same be stated in the instrument of
dissolution to be left to the award of the Registrar;

(b) alterations in the instrument of dissolution may be made with the
like consents as hereinbefore provided, and testified in the
same manner;

(c) a statutory declaration shall be made by the president and the
secretary of the credit union that the provisions of this Act have
been complied with, and shall be sent to the Registrar with the
instrument of dissolution; and any person knowingly making a false
or fraudulent declaration in the matter shall be guilty of an offence
and liable on conviction to imprisonment for a period not exceeding
2 years;

(d) the instrument of dissolution and all alterations therein shall be
binding upon all the members of the credit union;

(e) the Registrar shall cause a notice of the dissolution to be advertised
at the expense of the credit union in the Gazette; and unless, within
3 months from the date of the Gazette in which such advertisement
appears, a member or other person interested in or having any claim
on the funds of the credit union commences proceedings to set aside
the dissolution of the credit union, and such dissolution is set aside
accordingly, the credit union shall be legally dissolved from the
date of such advertisement, and the requisite consents to the
instrument of dissolution shall be considered to have been duly
obtained without proof of the signatures thereto;

(f) notice shall be sent to the Registrar of any proceeding to set aside
the dissolution of a credit union, not less than 7 days before it is

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commenced by the person by whom it is taken, or of any order
setting it aside within 7 days after it is made by the credit union.

74 Income tax.
The income of a credit union shall not be liable to income tax.

75 Appeal.
If the Registrar refuses to approve of any application for incorporation or of any
proposed by-law or amendment of any standard by-laws, the provisional
secretary or the credit union as the case may be may appeal from such refusal to
an appeal board to be appointed by the Minister consisting of not more than 3
members one of whom shall be a member of some other credit union. The
decision of the appeal board shall be final.

76 Fees payable to Registrar.
The Minister may from time to time by order prescribe the fee payable to the
Registrar for services under this Act.

77 Disposal of fees.
All fees received by the Registrar under or by virtue of this Act shall be paid by
him into the general revenue of the Kingdom.



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FIRST SCHEDULE

(Section 5)

THE CREDIT UNIONS ACT

MEMORANDUM OF ASSOCIATION

1. The undersigned are desirous of being incorporated under the provisions
of the Credit Unions Act.

2. The group of persons to whom membership is available is limited.

3. The corporate name of the Credit Union is to be (insert name proposed)
Credit Union Limited.

4. The registered office of the credit union is situated at ..............................

5. The par value of each share is $.........................

6. The names and addresses of the undersigned; the number of shares for
which each has subscribed, and the qualification of each within the group
to which membership is limited, are as follows: —
NAMES ADDRESSES NO. OF SHARES SUBSCRIBED

Will be provisional secretary of
the proposed credit union.





Dated at ........................ this ....................... day of ....................... 19 .................







………………………… ………………………….

Signature of Witnesses Signature of applicants.

Note: Not less than 5 of the above applicants must be of the full age of 21 years.

SECOND SCHEDULE
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SECOND SCHEDULE

(Section 7)

THE CREDIT UNIONS ACT

CERTIFICATE OF INCORPORATION

The ………………………………. Credit Union Limited, having filed a duly executed
Memorandum of Association, is incorporated under the Credit Unions Act.

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