A new regulation issued under the Banks Act which came into force on March 27, 1997 has broadened the definition of a bank.
It will bring into the net some of the savings and pyramid schemes which were previously unregulated.
Once an organisation is defined as a bank, it needs a banking licence and is subject to certain requirements like having to submit regular returns to the Registrar of Banks and hold reserves against deposits accepted from the public.
The definition of a bank now includes those organisations that accept money directly or indirectly from members of the public as a regular feature of their business practice with the prospect of members receiving payments or other money-related benefits by introducing new participating members.
This applies whether or not the new members are required to acquire moveable or immovable property, rights or services.
A business practice includes any method of marketing or distribution.