National Bank of Tuvalu Act


2008 Revised Edition

CAP. 38.30






NATIONAL BANK OF TUVALU ACT

National Bank of Tuvalu Act CAP. 38.30 Arrangement of Sections





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NATIONAL BANK OF TUVALU ACT

Arrangement of Sections
Section

PART I - PRELIMINARY 5
1 Short title................................................................................................................ 5
2 Interpretation.......................................................................................................... 5

PART II - ESTABLISHMENT, FUNCTION AND POWERS 6
3 Establishment of the Bank ..................................................................................... 6
4 Functions and powers of the Bank......................................................................... 6
5 Ministerial directions ............................................................................................. 7

PART III - BOARD, MANAGEMENT AND EMPLOYEES 7
6 The Board .............................................................................................................. 7
7 Constitution of the Board....................................................................................... 7
8 Disqualification...................................................................................................... 7
9 Chairman and Deputy Chairman ........................................................................... 8
10 Meetings of Board ................................................................................................. 8
11 Conflict of interest ................................................................................................. 9
12 Management........................................................................................................... 9
13 General Manager.................................................................................................... 9
14 Appointment of officers....................................................................................... 10
15 Casual employees ................................................................................................ 10

PART IV - CAPITAL, PROFITS AND RESERVES 10
16 Capital .................................................................................................................. 10
17 Profits................................................................................................................... 10
18 Reserve fund ........................................................................................................ 10

PART V - ANNUAL REPORTS AND FINANCIAL STATEMENTS 11
19 Financial year....................................................................................................... 11

Arrangement of Sections CAP. 38.30 National Bank of Tuvalu Act





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20 Annual reports and financial statements ..............................................................11

PART VI - MISCELLANEOUS 12
21 Guarantee by Government ...................................................................................12
22 Regulations...........................................................................................................12
23 Confidentiality......................................................................................................13

Supporting Documents

ENDNOTES 14

National Bank of Tuvalu Act CAP. 38.30 Section 1





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NATIONAL BANK OF TUVALU ACT

AN ACT TO ESTABLISH A NATIONAL BANK FOR TUVALU, AND FOR
RELATED PURPOSES1

Commencement [27th June 1980]

PART I - PRELIMINARY

1 Short title
This Act may be cited as the National Bank of Tuvalu Act.

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

“the Bank” means the National Bank of Tuvalu;

“the Board” means the Board of Directors of the National Bank of Tuvalu
established under section 6;

“Director” means a director of the Board;

“the Minister” means the Minister of Finance;

“the General Manager” means the General Manager appointed by the
Minister under section 13(1);

“the Chairman” means the Chairman appointed by the Minister under
section 9(1);

“the Deputy Chairman” means the Deputy Chairman appointed by the
Minister under section 9(1).

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PART II - ESTABLISHMENT, FUNCTION AND POWERS

3 Establishment of the Bank
(1) There is established by this Act a bank to be called the National Bank of

Tuvalu.

(2) The Bank shall —
(a) be a body corporate with perpetual succession;
(b) have a common seal;
(c) subject to section 5 of the Native Lands Act2 may acquire, hold and

dispose of property of every description;
(d) may sue or be sued in its corporate name; and
(e) do or perform such acts and things as bodies corporate may by law do

and perform.

4 Functions and powers of the Bank
(1) The Bank shall carry on general banking business to include the business of

accepting deposits of money withdrawable and repayable on demand or after
a fixed period or after notice and the employment of those deposits in whole
or in part by lending or any other means for the account and at the risk of the
Bank.

(2) Without in any way limiting the generality of subsection (1), the Bank shall
have the powers, in addition to any other powers conferred on it by this
Act —
(a) to receive money on deposit;
(b) to borrow money;
(c) to lend money;
(d) to buy, sell, discount and re-discount bills of exchange and promissory

notes;
(e) to buy, sell, or deal in securities issued by the Government and any

other securities;
(f) to buy, sell or deal in foreign currency, foreign exchange, specie, gold

and other precious metals;
(g) to establish credits and give guarantees;
(h) to underwrite loans and issues of capital;
(i) to appoint agents or correspondents; and

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(j) to do in Tuvalu or elsewhere, either alone or jointly with any person or
institution all things necessary or convenient to be done for or in
connection with or consequential upon any of its powers or functions.

5 Ministerial directions
In carrying out its powers, duties and functions under the provisions of this Act the
Bank shall act in accordance with any policy directions in the national interest given
to it from time to time in writing by the Minister.

PART III - BOARD, MANAGEMENT AND EMPLOYEES

6 The Board
(1) There shall be a Board of Directors of the National Bank of Tuvalu which

shall be constituted as hereinafter provided.

(2) It shall be the duty of the Board to ensure that the policy of the Bank is
directed towards the national interest and has due regard to the stability and
balanced development of the economy of Tuvalu.

7 Constitution of the Board
(1) The Board shall consist of Directors who shall be —

(a) The Secretary for Finance, ex-officio, and
(b) 4 other Directors appointed by the Minister.

(2) Directors shall be appointed for a period to be determined by the Minister but
shall be eligible for re-appointment.

(3) Directors shall be paid by the Bank such fees and allowances as may be
determined by the Board and approved by the Minister.

(4) The General Manager shall, unless otherwise directed by the Board or given
leave of absence in writing by the Chairman of the Board, be present at all
Meetings of the Board but shall not be entitled to any vote.

8 Disqualification
(1) No person shall be capable of appointment, as a Director, who —

(a) is a member of the Parliament of Tuvalu;
(b) is an officer or employee of the Bank;
(c) has been declared bankrupt or insolvent by a court in Tuvalu or

elsewhere and has not received his discharge;

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(d) is found lunatic or becomes of unsound mind;
(e) has been convicted anywhere of an offence involving dishonesty.

(2) A Director may resign his office by giving notice in writing to the Minister.

(3) The Minister shall by notice displayed at the Office of the Government,
Funafuti, terminate the appointment of a director if —
(a) the Director is without the prior written permission of the Chairman

absent from 3 successive meetings of the Board;
(b) in relation to the Director any circumstances arise which, if he were not

a Director would make him incapable of appointment under section
8(1).

(4) The Minister, after consultation with the Board, may by notice displayed at
the Office of the Government, Funafuti, terminate the appointment of any
Director but shall provide that Director with the reason or reasons for so
doing.

9 Chairman and Deputy Chairman
(1) The Minister shall appoint two Directors to be Chairman and Deputy

Chairman respectively of the Board for such periods as the Minister
determines but any such appointment shall cease immediately on the
Chairman or Deputy Chairman ceasing to be a Director.

(2) The Chairman or the Deputy Chairman may resign his respective appointment
by giving notice in writing to the Minister.

10 Meetings of Board3
(1) The Board shall meet as often as the business of the Bank may require but not

less frequently than once in every 2 months.

(2) Such meetings shall be at such times and places as the Board shall determine
or as the Chairman, or, in his absence, the Deputy Chairman shall direct.

(3) The Chairman or, in his absence, the Deputy Chairman shall be chairman at
meetings of the Board and in the absence of both the Chairman and the
Deputy Chairman from any meeting or any part of any meeting one of the
other Directors shall be appointed by the Board at or during such meeting to
be chairman of such meeting or part thereof.

(4) 3 Directors shall form a quorum at any meeting of the Board.

(5) Each Director shall have one vote.

(6) Questions arising at a Board meeting shall be resolved by a simple majority of
the votes of the Directors present and voting, except that in the event of an

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equality of votes, the chairman of the meeting or part thereof shall have a
second or casting vote.

11 Conflict of interest
(1) A Director shall fully disclose to the Board at the first meeting after, or at any

meeting during the course of which the relevant facts have come or come to
his knowledge, any interest direct or indirect in any matter before the Board:

Provided that the provisions of this subsection shall not apply to the Secretary
for Finance in his official capacities.

(2) After a Director has in pursuance of the last preceding subsection of this
section disclosed any interest in any matter before the Board, he shall not take
part in any further deliberation or in any decision of the Board on that matter:

Provided that the holding of any such interest shall not disqualify the
interested Director for the purpose of constituting a quorum at any meeting or
part thereof.

12 Management
The Bank shall be managed by the General Manager.

13 General Manager
(1) The General Manager shall be appointed for a period not to exceed 5 years

and may be removed by the Board but no appointment or removal shall be
made without the approval of the Minister. A General Manager shall be
eligible for reappointment.

(2) Where the General Manager is precluded by illness, absence from Tuvalu or
any other cause from exercising his functions as General Manager, the
Minister may appoint an acting General Manager who shall act as the General
Manager until such time as the General Manager is able to resume his
functions.

(3) The General Manager shall, except as may otherwise be provided in this Act,
or by any resolution of the Board, have the power to act and to enter into
contracts and to sign instruments and documents on behalf of the Bank, and
may with the approval of the Board, delegate such powers to other officers of
the Bank.

(4) The General Manager shall devote the whole of his services to the Bank and
shall not while holding office, without the approval of the Minister —
(a) receive any remuneration from any office or any employment other

than with the Bank;

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(b) hold any other office or employment, whether for remuneration or not,
except as a nominee of the Bank.

(5) The General Manager shall be paid by the Bank such salary and allowances as
determined by the Board and approved by the Minister.

14 Appointment of officers
The Bank may appoint on such terms and conditions as it shall determine such
permanent employees as are necessary for the purpose of this Act to be officers of
the Bank.

15 Casual employees
The Bank may also appoint such temporary and casual employees as are necessary
from time to time.

PART IV - CAPITAL, PROFITS AND RESERVES

16 Capital
(1) The authorised capital of the Bank shall be one million dollars and may be

increased from time to time by such amounts as may be proposed by the
Board and approved by the Minister.

(2) The issued capital of the Bank shall be —
(a) such sums as are contributed to be issued capital of the Bank as the

Minister determines from time to time;
(b) such other sums as are transferred from the reserve fund.

17 Profits
(1) The net profits of the Bank in any financial year shall be determined by the

Board after meeting all current expenditures for that year and making
provisions for such contingencies and purposes as are usually made by banks.

(2) The net profits of the Bank in any financial year shall be allocated as the
Board with the approval of the Minister determines.

18 Reserve fund
(1) The Bank shall have a reserve fund which shall consist of such sums as are

placed to the credit of the reserve fund as the Board with the approval of the
Minister determines.

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(2) There may be transferred from the reserve fund to the issued capital of the
Bank such sums as the Board with the approval of the Minister determines
from time to time.

PART V - ANNUAL REPORTS AND FINANCIAL
STATEMENTS

19 Financial year
The financial year of the Bank shall end on the 31st day of December in each year.

20 Annual reports and financial statements4
(1) The Board shall as soon as practicable after the end of each financial year and

in any event not later than 6 months from the end of the financial year,
prepare —
(a) a report on the operations of the Bank during that year; and
(b) financial statements, in the appropriate forms, in respect of that year.

(1a) The report prepared under paragraph (1)(a) shall include details of the
financial performance and effectiveness of the Bank as judged by
performance measures that are relevant to the banking and finance sector of
the Tuvalu economy and are prescribed by the Minister by notice.

(1b) The initial performance measures referred to in subsection (1a) shall be
prescribed by the Minister by notice no later than 31 August, 1996.

(2) The Auditor General shall inspect and audit and report at least once in every
financial year to Parliament on the accounts, transactions, finances and
property of the Bank in accordance with section 172 of the Constitution of
Tuvalu and subsection 35(1) of the Public Finance Act5 and must be satisfied
that —
(a) the accounts of the Bank have been properly prepared in accordance

with generally accepted accounting principles, taking into consideration
the requirement for good stewardship and developing practices with
respect to the reporting of corporate finances; and

(b) expenditure has been incurred with due regard to economy and the
avoidance of waste.

(3) The Auditor General in the report required by subsection (2) of this section,
shall state —
(a) whether the accounts and statements have been properly prepared in

accordance with the books and records of the corporation and give a

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true and fair view of the financial operations and the current financial
position of the Bank;

(b) whether the books and records of the Bank have been properly kept and
contain information adequate for the purposes of the audit;

(c) whether the financial affairs of the Bank have been properly conducted;
and

(d) all other matters arising out of the accounts and statements which he
considers should be made known to the Minister and Parliament.



PART VI - MISCELLANEOUS

21 Guarantee by Government
(1) The repayment of all moneys deposited in the Bank together with such

interest as may be due thereon, is guaranteed by Government and accordingly,
if at any time the assets of the Bank are insufficient to pay or meet the lawful
claims of every depositor, the Minister shall cause such deficiency to be paid
or met out of the Consolidated Fund as Statutory expenditures:

Provided that nothing in this section shall be construed as enabling any person
having any claim against the Bank or on its fund to institute proceedings in
respect thereof against the Government.

(2) Where any payment is made out of the Consolidated Fund as Statutory
expenditure in accordance with the terms of the preceding subsection the
Minister shall, on the first sitting day of Parliament thereafter, lay a report
before Parliament stating the amount of money paid and the reasons why the
Bank was unable to discharge its functions.

22 Regulations
(1) The Minister may make regulations for the conduct of the business of the

Bank.

(2) In particular and without prejudice to the generality of the foregoing powers
such regulations may relate to —
(a) the deposit of money with, or the withdrawal of money from, the Bank;
(b) interest in deposits with the Bank;
(c) the payment out of money standing to the credit of, and to the delivery

of bonds or securities held on behalf of, a deceased depositor, without
production of probate of his will or of letters of administration to his
estate;

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(d) the payment out of money standing to the credit of, and to the delivery
of bonds or securities held on behalf of, a person under a legal
incapacity.

23 Confidentiality
Except for the purposes of the performance of his duties or the exercise of his
functions or when lawfully required to do so by any court or under the provisions of
any law no Director, officer or employee of the Bank shall disclose to any person
any information relating to the affairs of the Bank or relating to the amount of any
account of any customer of the Bank and any person who contravenes the provisions
of this section shall be guilty of an offence and shall on conviction be liable to
imprisonment for 6 months or to a fine of $200.



ENDNOTES CAP. 38.30 National Bank of Tuvalu Act





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ENDNOTES


1 1990 Revised Edition, Cap. 58 – Acts 3 of 1980, 11 of 1982
Amended by Act 2 of 1996, commencement 15 April 1996, (by Act 4 of 2009)
Amended by Act 9 of 2002
2 Cap. 46.20
3 Amended by Act 2 of 1996
4 Amended by Acts 2 of 1996, 9 of 2002
5 Cap. 4.20