Banking Licensing Requirements
This statement is issued in terms of Section 15(3) of the Financial Institutions Act.
This policy outlines the minimum license application requirements that applicants must submit to the Reserve Bank as part of their proposal to set up a bank or a credit institution in Tonga.
Prudential Statement No. 12
This Prudential Statement applies to all applications to conduct banking business in Tonga. No person may carry on banking business in Tonga without being in possession of a current valid banking license issued under section 8(2) of the Financial Institutions Act. "Banking business" is defined in the National Reserve Bank of Tonga Act as:
- the business of receiving funds from the public through the acceptance of deposits of money payable upon demand or after a fixed period or after notice, or any operation through the frequent sale or placement of bonds, certificates, notes or other securities, and the use of such funds either in whole or in part for loans or investments for the account and at the risk of the person doing such business; and
- any other activity recognized by the Reserve Bank as customary banking practice which a bank engaging in the activities described in (i) may additionally be authorized to do by the Reserve Bank.
"Financial institution" is defined in the Financial Institutions Act as an institution carrying out “banking business”.
Because of the special nature of banking business and the high degree of trust and confidence implicit in the relationships that arise in this field, an exceptionally high standard of care is required both by financial institutions themselves, and by the regulatory and supervisory authorities, to protect the public against the risk of doing business with structurally unsound or imprudently conducted institutions. These standards apply to the identity of large shareholders, directors and senior management and to their professional record, business and other connections, as well as to the financial structure, supportive capability and proven competence of the institutions concerned.
Applications for licenses to carry on banking business are therefore subjected to most thorough scrutiny, and the subsequent performance of licensed institutions is closely
supervised.
Applicants may appoint an established firm of public accountants or legal practice familiar with Tonga law and institutions to represent them in the formal matters required for consideration of the application.
The following are minimum requirements that applicants must submit to the NRBT as part of their proposal to set up a bank or a credit institution in Tonga.
The minimum requirements have been divided into two categories, firstly, requirements under the Financial Institutions Act and secondly, requirements specified by the Reserve Bank. In addition, general instructions on how to complete the application forms (Forms 1, 2, 3 and 4) are also outlined in this Prudential Statement.
Banking Licensing Application Forms
- Banking License Application Form PDF 134 KB • FORM 1
- Bio Data Sheet - Shareholder PDF 153 KB • FORM 2
- Bio Data Sheet - Directors PDF 200 KB • FORM 3
- Business Plan PDF 196 KB • FORM 4
The National Reserve Bank of Tonga (Reserve Bank) was established on 1 July 1989 as the central bank of Tonga.