By William Madouk Garang
The Bank of South Sudan (BOSS) has canceled working permits of Southern Rock and Saint Theresa Rural Development Banks for inability to meet capital requirements and non-compliance.
In a public notice issued by the Governor of the Bank of South Sudan, Johnny Ohisa on January 13th 2022, the withdrawal of the license from the two private banks was due to undercapitalization or no longer providing services to clients.
“The Bank of South Sudan revoked license of Southern Rock Bank and Saint Theresa Rural and Development Bank with immediate effect under section 21, subsection (1) & (2) of the Banking Act 2012” partly read the notice.
Ohisa advised the members of the public to cease from doing business and cooperating with the said commercial banks.
According to the Banking Act, 2012 section 21, subsection (1) and (2) Central Bank shall revoke a bank license if:
“(a) the bank is critically undercapitalized. (b) the bank cannot fulfill its obligations to its depositors or other creditors, or otherwise no longer can provide security for the assets entrusted to it; (c) the bank is significantly undercapitalized and the Bank determines that receivership is necessary or appropriate in order to protect the interests of the bank’s depositors or other creditors,” partly read subsection (1) of Banking Act.
It added “(d) the bank is undercapitalized and: (i) fails to submit a capital restoration plan within the time period required by the Bank in accordance with this Act; (ii) fails to implement or achieve the results of such a plan that has been approved by the Bank; or (iii) the Bank determines that there is no reasonable prospect of its becoming adequately capitalized”.
In subsection (2) BOSS may revoke a bank’s banking license if: “a) the Bank determines that false or fraudulent statements or other irregularities occurred in connection with the bank’s license application; (b) the bank, or any member of the board of directors, senior management, employee, auditor or agent of the bank, refuses to provide information or documents to any inspector of the Bank in connection with an inspection pursuant to this Act;
“(c) the bank has ceased to engage in the business of receiving money deposits or other repayable funds from the public or making credits; (d) the Bank determines that the bank has conducted its administration or banking operations in an unsound or imprudent manner or otherwise has violated a law, or a regulation or order of the Bank, or any condition or restriction attached to a banking license or permit issued by the Bank among others”.
Saint Theresa Rural Development Bank was licensed on January 14th 2016, while Southern Rock Bank was licensed in 2017. According to the notice the license revocations were effected December 31st 2022.