The current banking regulatory framework has many robust elements, including reliance on solvency monitoring, international accounting standards, and actuarial methods. The legal framework for banking business is embodied in the Banking Act 1988. Under the Financial Services Development Act 2001, important amendments were made to section 46 of the Banking Act 1988 whereby Domestic Banks are now defined as Category 1 Banks having a Category 1 banking licence and offshore banks are now defined as Category 2 banks with a Category 2 banking licence. The banking legislation provides for prudential regulations with respect to banks' concentration of risk, weighted capital adequacy ratio, income recognition and clarification of loans and advances for provisioning purposes, maintenance of accounting and other records and internal control systems.
Although the island has only had a significant financial services sector for about two decades this has, in some ways, worked to its advantage. The Mauritian Authorities have been extremely prudent in adopting best international practice in the laws and regulations and learning from how other jurisdictions have developed, and the result is a financial industry that has matured quickly and is striving to embrace the highest international standards.
Pursuing its agenda to combat money laundering and terrorist financing and to promote a clean and reputable financial centre, the Government of Mauritius introduced a series of legislation in early 2002, namely the Prevention of Corruption Act, The prevention of Terrorism Act and the Financial Intelligence and Anti-Money Laundering Act under which the Financial Intelligence Unit was set up.
The Financial Intelligence Unit (FIU) was established under section 9 of the Financial Intelligence and Anti Money Laundering Act in August 2002. It is the Central Mauritian agency for the request, receipt, analysis and dissemination of financial information regarding suspected proceeds of crime and alleged money laundering offences as well as the financing of any activities or transactions related to terrorism to relevant authorities.