Banking Law

License to Conduct Banking Business

• No person shall conduct banking business or any part thereof in Sudan unless he has obtained a final written license issued in accordance with the provisions of the Central Bank of Sudan Act and this Act, and has fulfilled all conditions stipulated in the license, this Act, and the regulations issued thereunder.
• The provisions of this Act shall apply to all banks and financial institutions licensed to conduct banking business or any part thereof without exception, including branches of foreign banks and agencies.

Adjustment of the Status of Banks

• The Governor may, from time to time, through circulars issued by him, require banks and financial institutions existing at the time of the enactment of this Act to adjust their status in accordance with the provisions of this Act, in the manner and within the period specified by him.
• The Central Bank may, from time to time, require banks and financial institutions, or any of them, to adjust their status as it deems appropriate, in the manner and within the period it determines.

New Banks

• No person shall carry out any of the following activities except with a written license from the Governor:
  • Conduct banking business or any part thereof.
  • Register any company to conduct banking business or any part thereof.
• If the Governor, based on the investigations and studies conducted, is satisfied with the feasibility of the licensing application and that granting the license serves the public interest, he may grant the license under such conditions as he considers appropriate. He may also add to or amend such conditions at any time as he deems appropriate.
• No foreign bank shall be granted a license to operate in Sudan except upon the recommendation of the Central Bank and the approval of the Minister.
• The Governor may impose fees for granting a license to conduct all or part of banking activities, and may also impose service fees on all entities carrying out banking business or any part thereof.
• No bank established in Sudan may amend its memorandum, articles of association, or governing law except after obtaining the Governor’s written approval.
• If any bank fails to fulfill the licensing conditions, it shall be liquidated in accordance with the provisions set out in this Act or any other applicable relevant law.

Supervision and Control of Banks

• The Central Bank shall undertake the supervision and control of all banks and financial institutions, and any other person conducting all or any part of banking activities, to the extent of their engagement in banking business.
• The Governor, or any person delegated by him, shall have the authority to issue instructions and directives to any person conducting banking business wholly or partially, and such person shall comply with and implement those instructions and directives.

Use of the Word "Bank"

No person shall, without the written approval of the Governor:

• Use or continue to use the word "Bank" or any of its derivatives in any language, or any other word or expression indicating banking business, as a name, description, or title under which that person operates in Sudan.
• Refer or continue to refer to the word mentioned in paragraph (a) in bills of exchange, notices, advertisements, or by any other means.

Branches of Foreign Banks

• No foreign bank shall open a branch in Sudan to conduct banking activities unless it obtains a license from the Central Bank and transfers the amount determined by the Central Bank for this purpose. The Governor may amend the required amount to be transferred from time to time.
• A branch of any foreign bank shall submit an undertaking from its head office committing itself to meeting and fulfilling all obligations and commitments of its branch or branches in Sudan.
• The Central Bank may, with the approval of the Minister, revoke any license issued under the provisions of paragraph (1) if the concerned bank violates the conditions stated in the license or breaches the provisions of this Act.
• In the event of the liquidation of the parent bank, the Central Bank may seize the assets of the licensed branch in Sudan to the extent necessary to meet the branch’s obligations in Sudan.

Opening Representative Offices

• No foreign bank may open a branch or representative office in Sudan to conduct banking business except after obtaining a license from the Central Bank of Sudan.
• The representative office shall submit an undertaking from its head office committing itself to meeting and fulfilling all obligations related to its office in Sudan.
• The Central Bank may revoke any license issued under paragraph (1) if the representative office violates the provisions of this Act or the conditions stated in the license.

Opening, Relocating, and Closing Branches

The Governor may make the opening of branches inside and outside Sudan, their relocation, and their closure subject to his prior approval.

Conducting Other Banking Activities

Without prejudice to the general scope of banking business as defined under Article (4), any bank may conduct any of the following activities:

• Accept deposits, provide financing, lend and borrow, issue, accept, endorse, collect, and deal in negotiable instruments in any form in accordance with the provisions of this Act.
• Issue travelers’ cheques, credit cards, bank cheques, and certified cheques; buy and sell foreign currencies, shares, and financing certificates; subscribe to and manage such instruments; deal in financial markets; receive and safeguard share certificates, financing certificates, valuable items, and provide safe deposit facilities and related services.
• Act as an agent on behalf of others.
• Own, possess, and dispose of movable and immovable property through sale, mortgage, or lease; hold mortgage deeds or any document representing an interest in such property; and sell mortgaged property or property subject to such interest to recover the rights of the concerned bank, provided that the Governor’s written approval is obtained.
• Develop banking business through all possible technological means.
• Support, coordinate, and develop economic and commercial cooperation between Sudan and other countries.
• Carry out any other activity determined or permitted by the Governor.

Merger

Notwithstanding the provisions of the Companies Act of 1925 or any law replacing it, no bank operating in Sudan may be merged with or incorporated into any other bank or banks except with the approval of the Central Bank.

Establishment and Composition of the Authority

• An authority known as the "Higher Sharia Supervisory Authority" shall be established by a decision of the President of the Republic upon the recommendation of the Governor.
• The Authority shall consist of no fewer than five members possessing competence and experience in Islamic jurisprudence, financial transactions, and banking activities.
• The President of the Republic shall appoint the Chairman and members of the Authority and shall determine their remuneration and terms of service.

Functions and Powers of the Authority

The Authority shall have the following functions and powers:

• To provide Sharia opinions on matters related to the activities of banks and financial institutions.
• To approve banking modes, transactions, and products in accordance with the principles of Islamic Sharia.
• To issue Fatwas and Sharia regulations governing banking activities.
• To unify the Sharia reference framework for banks and financial institutions.
• To supervise the Sharia supervisory bodies within banks and coordinate among them.
• To carry out any other functions assigned by the Governor or specified by this Act or its regulations.

Decisions of the Authority

The decisions and Sharia Fatwas issued by the Authority shall be binding upon banks, financial institutions, and relevant entities.

Meetings of the Authority

• The Authority shall hold its regular meetings in accordance with the provisions specified in the regulations.
• The legal quorum for meetings of the Authority shall be achieved by an absolute majority of its members.
• Decisions shall be made by majority vote, and in the event of a tie, the Chairman shall have the casting vote.

Compliance with Islamic Sharia Principles

All banks and financial institutions shall, in conducting their various activities and operations, comply with the principles of Islamic Sharia as determined by the Higher Sharia Supervisory Authority.

Maintenance of Liquid Funds

• Every bank shall maintain liquid funds at the ratios determined by the Central Bank from time to time.
• The Central Bank may amend liquidity ratios in accordance with the requirements of monetary and banking policy.

Statutory Reserve

• Every bank shall maintain a statutory reserve with the Central Bank at the ratios determined by the Central Bank.
• In the event that a bank violates the provisions related to the statutory reserve, the Central Bank may impose appropriate penalties.

Maximum Financing Limits

• No bank shall grant financing, facilities, or guarantees to any person exceeding the limits determined by the Central Bank.
• The Central Bank may establish regulations governing financing, investment, and risk management.

Prohibition of Financing Certain Categories

No bank shall grant financing, facilities, or guarantees to the Chairman and members of the Board of Directors, the General Manager, senior employees, or persons having a substantial interest except in accordance with the regulations determined by the Central Bank.

Purchase of Shares and Ownership of Real Estate

• A bank shall not purchase or own shares or real estate except within the limits and for the purposes determined by the Central Bank.
• A bank may acquire real estate for the purpose of recovering its rights, provided that such property shall be disposed of within the period determined by the Central Bank.

Opening Accounts and Investment

Banks may open various types of accounts and engage in investment and financing activities in accordance with the regulations determined by the Central Bank and the principles of Islamic Sharia.

Maintenance of Records and Data

Every bank shall maintain records, books, data, and information relating to its activities in accordance with the regulations and standards determined by the Central Bank.

Confidentiality of Accounts

All customer accounts, deposits, entrusted assets, and safe deposit boxes held by banks shall be confidential. They shall not be examined or information relating to them disclosed except with the customer's consent or in accordance with the provisions of the law.

Anti-Money Laundering

Banks shall adopt the necessary procedures and measures to combat money laundering and the financing of terrorism in accordance with the laws, regulations, and circulars issued by the Central Bank.

Preparation of Final Accounts

• Every bank shall, at the end of each financial year, prepare the final accounts and balance sheet in accordance with the accounting principles and standards determined by the Central Bank.
• The final accounts shall reflect the true financial position of the bank and the results of its operations.

Appointment of the External Auditor

• Every bank shall appoint one or more external auditors after obtaining the approval of the Central Bank.
• The Central Bank may reject the appointment of any external auditor without stating the reasons.
• A bank shall not change its external auditor except with the approval of the Central Bank.

Duties of the External Auditor

The external auditor shall:

• Audit the accounts of the bank in accordance with the approved professional and accounting standards.
• Verify the soundness of the bank’s financial position.
• Submit a report to the Central Bank regarding any violation, irregularity, or unsound financial condition discovered during the audit.
• Provide any information or data requested by the Central Bank.

Submission of Financial Statements and Reports to the Central Bank

• Every bank shall submit to the Central Bank, within the period specified by the Central Bank, a certified copy of the balance sheet, final accounts, and audit reports.
• The Central Bank may request any additional data or reports it deems necessary.

Publication of the Balance Sheet

Every bank shall publish its balance sheet and final accounts in the manner determined by the Central Bank.

Inspection Authority

• The Central Bank may, at any time, conduct an inspection of any bank, financial institution, or any entity conducting banking business wholly or partially, in order to verify the soundness of its financial and administrative position and its compliance with the provisions of this Act, the regulations, circulars, and instructions issued thereunder.
• The inspection may be carried out by employees of the Central Bank or any person or entity assigned by the Governor for that purpose.

Duties of Banks During Inspection

The concerned bank or financial institution shall:

• Allow inspectors access to all books, records, accounts, documents, and data.
• Provide any information or explanations requested by the inspectors.
• Provide the necessary facilities to enable the inspection process.

Inspection Report

• The inspector shall prepare a report on the findings of the inspection and submit it to the Governor.
• The Central Bank may direct the bank to take the necessary corrective measures in accordance with the findings of the report.
• The bank shall comply with the directives and implement the corrective measures within the period specified by the Central Bank.

Appointment of a Controller or Supervisor

• The Governor may, if it appears that there are violations or unsound financial or administrative conditions, appoint a controller or supervisor over the bank.
• The decision of appointment shall specify the powers, responsibilities, and term of service of the controller or supervisor.
• The bank and its employees shall be fully required to cooperate with the controller or supervisor.

Administrative Penalties

The Central Bank may impose any of the following administrative penalties on the violating bank:

• Warning.
• Imposition of financial penalties.
• Suspension of certain activities or services.
• Suspension or dismissal of any officials of the bank.
• Restriction or withdrawal of the license.
• Any other penalties specified by the Act or regulations.

Supervisory Powers of the Central Bank

The Central Bank may, whenever it determines that any bank has violated the provisions of this Act, the regulations, circulars, or instructions issued thereunder, or has adopted policies that harm depositors, the public interest, or the national economy, take any measures it deems appropriate.

Issuance of Directives

• The Central Bank may issue the necessary directives and instructions to the bank to remedy violations or rectify its conditions.
• The bank shall comply with and implement such directives within the period specified by the Central Bank.

Suspension or Dismissal of Officials

• The Governor may suspend or dismiss the Chairman, members of the Board of Directors, the General Manager, or any official of a bank if negligence, violation of the law, or harm to the interests of depositors or the bank is proven.
• A temporary replacement may be appointed to manage the affairs of the bank.

Restriction of the Bank’s Activities

The Central Bank may impose restrictions on a bank’s operations, activities, services, or branches whenever it deems such action necessary.

Suspension or Revocation of the License

• The Central Bank may temporarily suspend or permanently revoke a license if the bank violates the provisions of this Act, fails to meet its obligations, or if its financial position is exposed to risk.
• The bank shall be notified of the reasons for the decision.

Liquidation of the Bank

The Central Bank may initiate procedures for the liquidation of a bank in accordance with the provisions of this Act and other relevant laws if its conditions cannot be rectified, its violations continue, or it becomes unable to continue conducting banking business.

Protection of Depositors’ Funds

The Central Bank shall take the necessary measures and procedures to protect the funds and rights of depositors and ensure the stability and soundness of the banking system.

Banking Confidentiality

All information and data relating to customers' accounts, deposits, entrusted assets, safe deposit boxes, and banking transactions shall be considered confidential and shall not be disclosed or accessed except in accordance with the provisions of the law.

Prohibition of Disclosure of Information

No member of the Board of Directors, manager, employee, external auditor, or any person who, by virtue of his or her position, has access to information relating to the bank or its customers shall disclose such information except in cases permitted by law.

Penalties

Without prejudice to any more severe penalty prescribed by any other law, any person who violates the provisions of this Act, or the regulations, circulars, or instructions issued thereunder, shall be subject to the penalties prescribed by this Act or its regulations.

Power to Issue Regulations and Circulars

• The Central Bank may issue the regulations, rules, circulars, and instructions necessary for the implementation of the provisions of this Act.
• The regulations, circulars, and instructions issued under the provisions of this Act shall be binding on all banks, financial institutions, and relevant entities.

Exemption from Liability

No civil or criminal liability shall arise against the Central Bank, the Governor, or any employee of the Central Bank for any action taken in good faith in implementation of the provisions of this Act.

Liquidation of Banks

Banks shall be liquidated in accordance with the provisions of this Act and other relevant laws in a manner that ensures the protection of the rights of depositors and creditors.

Powers of the Governor

The Governor may take any measures or decisions necessary to implement the provisions of this Act, achieve its objectives, and maintain the soundness and stability of the banking system.