FSSD achieves its objectives by performing the following functions. 

    §         Licensing of Institutions under the BFIA and IBA

During the licensing process, FSSD ascertains, among other things, that the applicants and proposed management are fit and proper, that the capital is adequate and that the business plan and forecasted financial statements are feasible and provide continuity of the institution.

§         Registering of Credit Union under the CUA

Similar to the licensing process for banks and financial institutions, the objective is to ensure that applicants and management are fit and proper, i.e. possess reputable character and relevant experience.  Also, the level of capital to be invested must be adequate and there must be a feasible business plan that furnishes information regarding cooperative principles, practices and organizational procedure.

§         Off-Site Surveillance

Institutions are monitored on a continual basis.  This is done primarily through the submission of financial reports to FSSD.  The reports are analyzed to determine adherence with legislation, operational growth and earning prospects. 

FSSD maintains on-going communication with the institutions to resolve issues regarding the reports and to keep abreast with changes and developments within the institutions. If severe weakness is identified during the off-site surveillance, a special on-site examination is conducted in the specific area of weakness.  
 

§         On-Site Examination

On-site examination provides further assessment of an institution’s prudential practices and legal compliance.  Areas assessed are Capital, Asset Quality, Management, Earnings, Liquidity and Internal Controls.  Emphasis is given to areas in which weaknesses are detected during the off-site surveillance.

The new framework for capital adequacy requires, as one of its three pillars, the concept of market disclosure. As part of its preparation to bring standards in line with this new direction and after consultation with the industry, CBB has decided to publish key financial information for domestic commercial banks. This publication utilizes quarterly information sent by the banks as part of the continuous offsite supervision of the banks. It is the assumption that besides regulatory capital requirements and supervisory review to strengthen the safety and soundness of the system, market disclosure that provides reliable and timely information will allow market participants to conduct their own risk assessment of industry players. In addition, disclosure of market information provides a strong incentive for banks to conduct business in a safe, sound and efficient manner.  It also is an incentive to maintain a strong capital base. The information provided by the CBB meets the vital information requirements for all banking institutions and is important to the basic operation of market discipline.