Private banking can be defined as the business of offering banking and financial services and products to high-net-worth customers including but not limited to an all-inclusive money-management relationship.
Initially, the Central Bank issued general banking licenses but this has since changed since the introduction of amendments to the Banking Act through the Finance Act. A key amendment was the introduction of standalone licenses for private banking. Previously, the process was cumbersome as applicants had to meet the same threshold set for banks in general.
Central Bank has also been empowered under the guidelines to supervise the shareholding of private banking institutions which deal exclusively in non-discretionary wealth management. Central Bank requires that any person who holds or intends to hold a major interest in a private banking institution:
- Notifies Central Bank of its intention to hold an interest in the bank;
- the applicant undertakes in writing not to interfere with the management and operations of the bank; and
- In the event ones shareholding/interest reaches anywhere between 20-50 per cent of the capital or of voting rights in the bank or decreases below each of these levels, the individual ought to notify Central Bank.