BANKING SYSTEM OF COOK ISLANDS

The law relating to banking, the obtaining of a banking license and banking confidentiality is contained in the Offshore Banking Act 1981 and the Banking Act 2003.
Section 4 of the Banking Act 2003 provides for three types of licenses, namely domestic banking license, international banking license and restricted international banking license.
A domestic banking license enables the licensee to carry on domestic banking business in the Cook Islands with residents of, or visitors to, the Cook Islands, in any currency. This provision applies to the three local banks, which until now had been licensed under the Banking Act 1969, which is repealed by the Act.
An international banking license enables the licensee to carry on business with persons who are not residents of the Cook Islands or with international companies, partnerships and trusts incorporated or registered in the Cook Islands under the International Companies Act, the International Trusts Act, or the International Partnership Act. Until now, such banks have been licensed under the Offshore Banking Act 1981-82, which is repealed by the Act.
A restricted international banking license is a new category available to foreign banks licensed in their home jurisdiction, who wish to carry on banking business through the Cook Islands. Such licensees can only operate in the Cook Islands through a trustee company licensed under the Trustee Companies Act.
With the passing of the Financial Supervisory Commission (FSC) Act 2003 all applications for licenses now go before the FSC. Licensed banks must submit audited accounts each year.

Financial Institutions Operating

1.) The ANZ Bank Limited, Cook Islands, was set up in 1988 and is wholly owned by the ANZ Banking Group Limited (ANZ), a publicly listed Australian company. It offers a full range of commercial and retail banking services. ANZ has branches in eight of the Pacific Islands Forum countries (the Cook Islands, the Fiji Islands, Kiribati, Papua New Guinea, the Solomon Islands, Samoa, Tonga and Vanuatu). In October 2001, ANZ acquired a majority interest in the Bank of Kiribati Ltd, and announced plans to expand its operations in the Fiji Islands, Papua New Guinea and Vanuatu, with the completed acquisition of the Bank of Hawaii’s operations in these countries expected by the end of 2001. It has also recently created a presence in the Pacific Island countries of East Timor and American Samoa.

2.) The Bank of the Cook Islands was established in June 2001 from the merger of the Cook Islands Development Bank (established in 1979) and the Cook Islands Savings Bank. The Bank of the Cook Islands is owned by the Cook Islands Government. It provides developmental loans for local businesses as well as a commercial banking service. The bank has merged with the Cook Islands Savings Bank and became the Bank of the Cook Islands at the end of June 2001.

3.) The Westpac Bank, Cook Islands, a wholly owned operation of Westpac Banking Corporation of Australia (Westpac), opened in 1998 when Westpac purchased the existing operations of the European Pacific Banking Corporation. Today, Westpac Bank, Cook Islands, offers customers a full range of retail, commercial, international and trade products. The bank also operates the Bureau de Change at the International Airport for foreign exchange and to cash traveller’s cheques. There is also an agency of the bank on Aitutaki Island.