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Bank of Somaliland Financial Regulations Reform Presented by The Governor Bank of Somaliland

Bank of Somaliland Financial Regulations Reform Presented by The Governor Bank of Somaliland. Purpose and Structure. Bank regulation and supervision unit is under the Deputy Governor’s Office .

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Bank of Somaliland Financial Regulations Reform Presented by The Governor Bank of Somaliland

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  1. Bank of SomalilandFinancial Regulations ReformPresented byThe Governor Bank of Somaliland

  2. Purpose and Structure • Bank regulation and supervision unit is under the Deputy Governor’s Office. • Purpose: Responsible for the execution of BoS’s financial system stability objective at the operational level. • To foster the liquidity, solvency and proper functioning of a stable market based financial system, and to promote a safe, sound and efficient national payment system

  3. Achievements • Bank of Somaliland Act passed in 2012 providing legal authority to BoS to license, regulate and supervise all types of financial institutions • Islamic banking law passed in 2012 to formalize Islamic banking business • Bank supervision unit established and staff trained – with World Bank assistance – on regulation and supervision of banks, including trainings on AML/CFT.

  4. Achievements • “Transitional policy for licensing, registration and regulation of banks and other financial institutions” approved by Board of BoS • “Guidelines for the Licensing of Banks and Financial Institutions” approved by the Board of Directors. • Both documents drafted with in-house advise by World Bank.

  5. Achievements • Anti money-laundering bill submitted to Council of Ministers. Bill approved by the Council. • The bill establishes the legal framework to prevent money laundering and terrorist financing. • World Bank provided invaluable inputs to AML bill. • Remittance bill drafted and submitted to Council of Ministers for approval. • The bill will formalize money remittance business.

  6. Achievements • Establishment of Somaliland shillings payment system in the mobile money transfer • Issued licenses to major money changers in Hargeisa, Burao and Borama: 70 have been properly registered and licensed. • Issued regulations to exchange 30% of all inbound remittances into Somaliland Shillings to stabilize exchange rate

  7. Challenges • Foreign currency reserves non-existent. • Continued delay of the Conventional Banking Law – the greatest challenge so far. • Capacity gap in Supervision Unit: supervisory tools and trainings considered necessary.

  8. Challenges • Statistics & Research Department of the Bank lacking training on data collection and analysis. • Non-recognition of Somaliland.

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