Regulatory Alerts1999-09-22
Preference Shares Held by Banking Institutions in Companies
The Bank of Namibia issued Circular BIA 2/99 to amend previous regulations and permit banking institutions to hold preference shares in non-banking companies without violating statutory prohibitions on direct non-banking business interests. Exemptions are granted case-by-case provided the aggregate investment does not exceed capital adequacy surplus and the shares are redeemable, non-voting, non-convertible, and cumulative. Institutions must report these holdings as loans and advances on statutory returns, classify them as large exposures when they reach ten percent of capital funds, and refrain from renewing existing facilities without regulatory approval.
Share