Overview Of Non Bank Financial Sector Of Mauritius Finance Essay

Banks are the most of import establishments which are responsible in pull offing and procuring the wealth of the common adult male. The banking industry, whether public Bankss or private Bankss, are the most sure concern entities, where people deposit their difficult earned money for safety. However, there are other establishments which are bit by bit doing its presence felt in this field-Non-Bank Financial Institutions.

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Under the Banking Act 2004, “ non-bank sedimentation taking establishment ” means an establishment other than a bank that has been authorized by the cardinal bank to carry on sedimentation taking concern. Harmonizing to the Bank of Mauritius, the Non-Bank Deposit Taking ( NBDT ) Sector comprises establishments licensed by the Bank to raise sedimentations from the populace to fund leasing and loaning activities. They are governed by the same statute laws and ordinances as Bankss. NBDT establishments play an every bit of import function in fiscal intermediation by funding families and corporate establishments runing in cardinal economic sectors.

3.2 Regulator of Non-Bank Financial Sector

The Financial Services Commission ( FSC ) of Mauritius was established as the incorporate regulator for the Non-Bank Financial Services Sector under the Financial Services Development Act 2001. With the passage of the Financial Services Act 2007, investing in Mauritius has been facilitated and the legal model modulating the non-banking fiscal services sector has been modernized. The FSC is the incorporate regulator for the industry and its remit encompasses those of the former regulative organic structures for securities ( Stock Exchange Commission ) , insurance ( Insurance Division of the Ministry of Economic Development, Financial Services and Corporate Affairs ) and planetary concern ( Mauritius Offshore Business Activities Authority ) .

The Commission therefore licenses, regulates and supervises Non-Bank Financial Institutions in Mauritius. The Non-Bank Financial sector includes establishments involved in Insurance & A ; Pensions, Capital Market operations, Leasing & A ; Credit Finance every bit good as Global Business activities.

The FSC is besides committed to the sustained development of Mauritius as a sound, stable and competitory international fiscal services Centre. Consequently, the Commission promotes the development, equity, efficiency and transparence of Non-Bank Financial Institutions and capital markets in Mauritius whilst guaranting the protection of investors.

3.3 Review of Trends

In 2011, the FSC licensed 16 NBFI ‘s under the Financial Services Act ( FSA ) , 19 under the Securities Act ( SA ) and 694 under the Insurance Act ( IA ) , conveying the entire figure of other NBFI ‘s to 729, stand foring an addition of 7 % as compared to 2010.

The Non-Bank Deposit-Taking ( NBDT ) sector is comparatively little, stand foring about 5.6 per cent of banking sector assets at end-March 2012 compared to 5.7 per cent a twelvemonth earlier. Entire assets in that sector represented 16.8 per cent of GDP. The chief activities of Non-Bank Deposit-Taking Institutions ( NBDTIs ) comprise raising sedimentations and widening leasing and loan installations. Congruent to tendencies in the banking sector, activity of NBDTIs slowed down in the first months of 2012 partially as a consequence of hushed economic conditions.

On 8 February 2012, the figure of NBDTIs in operation in Mauritius has come down to nine. With the announcement of subdivision 12 ( 5 ) of the Banking Act 2004 in June 2007, NBDTIs are capable to the same prudential ordinances as Bankss. As such, over and above keeping a minimal capital of Rs200 million, they besides have to follow with the guidelines on Credit Concentration Risk and on Related Party Transactions. Furthermore, with consequence from 1 October 2009, they besides have to follow with the Guidelines on Capital Adequacy Ratio ( CAR ) for NBDTIs by keeping a minimal Car of 10 per cent. As at terminal of 2009, one NBDTI was yet to run into the lower limit needed capital of Rs200 million.

Regulatory Credit Concentration Limits

Harmonizing to the Banking Act 2004, the recognition exposure of a NBDTI shall be within the undermentioned bounds:

Recognition exposure to any individual client shall non transcend 25 per cent of the NBDTI ‘s capital base ;

( B ) Recognition exposure to any group of closely-related clients shall non transcend 40 per cent of the NBDTI ‘s capital base ; and

( degree Celsius ) Aggregate big recognition exposures to all clients and groups of closely-related clients shall non transcend 800 per cent of the NBDTI ‘s capital base.

Mauritius Leasing Company Limited

The Mauritius Leasing Company Limited ( ML ) , the lone leasing company listed on the Stock Exchange of Mauritius, provides rentals for equipment, machinery, works, motor vehicles, tools, and other assets to industrial, agricultural, commercial, service sectors, the freelance, professionals and persons.

ML lays strong accent on quality merchandises, a dynamic selling scheme and efficiency and fight, which has allowed the company to capture 25 % of the leasing market.

The company is one of the most advanced leasing and investing concerns in Mauritius, with an impressive record which includes being:

The first leasing company in Mauritius ;

The first leasing company to be granted a deposit-taking license ;

The first leasing company to publish unsecured bond stocks in Mauritius, and

The first leasing company listed on the Stock Exchange of Mauritius.

Historical Timeline of Events of Mauritius Leasing Company Limited

Since its creative activity, Mauritius Leasing has led the field in Mauritius and developed a strong repute as an advanced, efficient and competitory company that focuses on presenting quality service to its clients.

1987 – The company incorporated as a joint venture between the Government of Mauritius and the local private sector, going the first company offering renting installations to concerns.

1990 – Milliliter became the first leasing company to publish unsecured bond stocks on the Stock Exchange of Mauritius.

1995 – Bank of Mauritius issued a license in 1995 empowering ML to carry on deposit-taking concern.

1997 -A new chapter unfolded in the history of ML when 75 % of the company was acquired by British American Insurance Co. ( Mtius ) Ltd.

2003 -ML pioneered the debut of the pre-approved leasing strategy, which received many awards and confirmed the company ‘s position as market leader. In December of the same twelvemonth, ML offered 75, 000,000 ordinary portions for sale to the populace. This determination was made by the Board of Directors to carry through the company ‘s future fiscal and operational aspirations, in peculiar to consolidate its capital construction, refund outstanding unsecured bonds, widen the stockholder base and increase overall fight.

2004 -In January, the offer was oversubscribed and a month subsequently Mauritius Leasing portions were successfully listed on the Stock Exchange of Mauritius – doing it the first publically listed renting company in the state.

Fiscal Highlights of Mauritius Leasing Company Ltd

SICOM Financial Services Ltd

SICOM Financial Services Ltd ( SFSL ) is a wholly-owned subordinate and member of the SICOM Group. It is a public company incorporated in Mauritius on the 28th December 1999 and it started its operations on 26th April 2000.

SFSL is engaged in depositary concern, investing concern and finance rental activities and holds a sedimentation taking license as a Non-Bank Financial Institution.

SICOM Financial Services Ltd accepts sedimentations from both Individuals and Corporates.

GROUP STRUCTURE

State INSURANCE COMPANY OF MAURITIUS LTD

( Insurance, Pension, Investment Management, Trustee Services, Actuarial Services )

SICOM Financial Services Ltd ( Deposit pickings, Leasing, Investment Management ) ( 99 % )

SICOM General Insurance Ltd ( General Insurance Business ) ( 100 % )

SICOM Global Fund Ltd ( Global Business Activity ) ( 100 % )

SICOM Management Limited ( Global Business Activity ) ( 100 % )

SICOM Registry & A ; Secretarial Services Ltd ( Registrar and Transfer Agent ) ( 100 % )

SICOM General Fund ( Unit Trust )

SICOM Overseas Diversified Fund ( Unit Trust )

Background

The State Insurance Company of Mauritius Ltd ( SICOM ) was incorporated as a public company in 1988 but its roots can be traced back every bit far as 1975 where its concern operations started with insurance services such as Actuarial Valuations and Management of Pension Schemes. In position of new variegation chances, the State Insurance Corporation of Mauritius started subventioning General Insurance in 1978 and Life Assurance and Motor Insurance in 1980.

In 1998-1999, SICOM Global Fund Ltd, SICOM Management Ltd and SICOM Financial Services Ltd ( SFSL ) were created to consolidate the SICOM Group fiscal place and unfastened new avenues towards globalisation.

In 2010, SICOM has incorporated a new company, SICOM General Insurance Ltd ( SICOM GIN ) to transact General Insurance concern merely, in conformance with the Insurance Act 2005. SICOM GIN is a wholly-owned subordinate and member of the SICOM Group and has started its operations on 1st July 2010.

The Group ‘s activities consist of Long Term ( Life & A ; Pensions ) and General Insurance for both single and corporate markets, Actuarial Services, Group Medical, Loans, Deposit Taking, Leasing, Unit Trust every bit good as Investment Management.

Fiscal Highlights of SICOM Financial Services Ltd

Entire Assets and Net Assets Value

The entire assets and net assets of the Company increased by 2.4 % and 10 % to make Rs 11.2 billion and Rs 2.8 billion severally as at 30 June 2011.

Employee turnover

The company ‘s turnover increased by 6.7 % for the fiscal twelvemonth ended 30 June 2011 to make Rs 1.6 billion compared to Rs 1.5 billion registered last twelvemonth.

Directors ‘ duties for the fiscal statements

The managers are responsible for the readying and just presentation of these fiscal statements in conformity with International Financial Reporting Standards and in conformity with the demands of the Mauritius Companies Act 2001 and the Financial Reporting Act 2004. They are besides responsible for such internal control as they determine is necessary to enable the readying of fiscal statements that are free from material misstatement, whether due to fraud or mistake.

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