Seychelles: lending & credit regulation

Who regulates

• Central Bank of Seychelles

  Primary supervisor for licensed banks and non-bank credit-granting institutions; manages credit information systems and prudential standards.

  ^{[1][2][3][4][5][6][7][8][9][10][11][12][13][14][15]}

• Financial Services Authority Seychelles

  Regulator for hire purchase and credit sales providers; implements licensing and operational standards under the 2013 Act.

  ^[16]

Core laws & rules

• Financial Institutions Act (2004)

  The primary legislative framework governing licensed financial institutions, including banks and non-bank credit grantors, amended by Notice 4 of 2020.

  ^[5]

• Hire Purchase and Credit Sales Act (2013)

  Establishes the legal basis for licensing and regulating hire purchase and credit sales providers, implemented via FSA guidelines.

  ^[16]

• Public Debt Management Act (2008)

  Governs advances to parastatal organizations, requiring statutory debt management committee approval before banks grant such credits.

  ^[14]

Licensing & registration

• Banking and Non-Bank Credit Granting

  All licensed banks and non-bank credit-granting institutions must be supervised by the CBS and comply with prudential regulations.

  ^[2][3]

• Hire Purchase and Credit Sales

  Providers must obtain mandatory licensing from the FSA and submit comprehensive documentation as per the 2013 Act guidelines.

  ^[16]

Restrictions & warnings

• Annual percentage rates for hire purchase and credit sales are capped at 22.50%, calculated using a diminishing balance method.

  ^[17]

• Banks must classify credits into five risk-based categories monthly and maintain minimum statutory provisioning levels, reconciling with IFRS 9.

  ^[7][4]

• Participating institutions must conduct mandatory Credit Information System enquiries before approving facilities and report data electronically.

  ^[8][11]

• Eligible collateral for provisioning purposes is valued at 50% of the net realisable value of approved tangible securities.

  ^[9]

Direction of travel

• Regulators are enhancing supervisory reporting requirements, including the new LISC Return for climate-related risk events and stress testing data.

  ^[1][2]

Sources

1. Central Bank of Seychelles LISC Return Implementation for Commercial Banks · 2025-12-30
2. Guidelines on Reporting for Loan and Investment Portfolios, Sustainable Funding, and Climate-Related Risk · 2025-12-03
3. Guideline on Large Exposure, Credit Concentration and Connected Lending · 2023-07-06
4. Revised Circular on IFRS 9 Requirements for Financial Institutions · 2023-03-23
5. Central Bank of Seychelles Notice 4 of 2020 Amending Financial Institutions Act 2004 · 2020-09-09
6. Central Bank of Seychelles Notice on Financial Institutions Act Modifications, Foreign Currency Exposure and Credit Classification Regulations · 2020-06-09
7. Consolidated Financial Institutions (Credit Classification and Provisioning) Regulations 2010-2019 · 2019-06-05
8. Central Bank of Seychelles (Credit Information System) Regulations 2012-2014 · 2018-09-13
9. Eligible Collateral Under the Credit Classification and Provisioning Regulations 2010 · 2017-03-16
10. Central Bank of Seychelles (Credit Information System) (Amendment) Regulations 2014 · 2016-11-03
11. Central Bank of Seychelles (Credit Information System) Regulations, 2012 · 2012-11-27
12. Financial Institutions (Credit Classification and Provisioning) Regulations 2010 · 2012-11-21
13. Financial Institutions (Credit Classification and Provisioning) (Amendment) Regulations 2011 · 2012-11-21
14. Advances to Parastatal · 2010-02-21
15. Large Exposure, Credit Concentration and Connected Lending · 2009-05-21
16. Hire Purchase and Credit Sales Guidelines · 2021-09-16
17. Hire Purchase and Credit Sale (Charges) Regulations, 2018 · 2018-01-01