Section 35 of The Banking Act CAP 488: Liquidation of insolvent institutions

(1) If satisfied on reasonable grounds that an institution has become insolvent, the Central Bank may appoint the Board to be a liquidator of the institution.
(2) Such an appointment has the same effect as the appointment of a liquidator by the High Court under Part VI of the Insolvency Act (Cap. 53), and for that purpose, references in that Act to "the relevant date" and "commencement of the liquidation" are taken to be references to the date on which the Board is appointed as liquidator.
(3) A person may not be appointed as liquidator of an institution under Part VI of the Insolvency Act (Cap. 53)—
(a) if the Board has already been appointed as its liquidator; or
(b) if the Board has not already been so appointed without the approval of the High Court.
(4) The Court may give approval under subsection (3)(b) only if the Central Bank—
(a) has certified that it does not intend to exercise its powers under this section; or
(b) has failed to exercise its powers within such period, not exceeding three months, as the High Court may specify.
(5) When a liquidator (other than the Board) has been appointed as liquidator of an institution, the Central Bank may, at any time, apply to the High Court for an order that the liquidator be removed and the Board be appointed as liquidator instead.
(6) If the High Court appoints the Board instead of the liquidator, the provisions of the Insolvency Act (Cap. 53), apply to a liquidation by the Board but only to the extent that they are not inconsistent with this Act and any regulations made under it.
(7) When the Board is appointed as liquidator of an institution, it may do all or any of the following—
(a) carry on the business of the institution so far as may be necessary for its beneficial liquidation;
(b) appoint an advocate to assist it in the performance of its functions;
(c) pay any classes of creditors in full;
(d) enter into any compromise or arrangement with creditors or persons claiming to be creditors;
(e) compromise—
(i) all calls and liabilities to call, debts and liabilities capable of resulting in debts, and all claims (whether present or future, certain or contingent, or ascertained or sounding only in damages) subsisting or alleged to be subsisting between the institution and a contributory or other person who may have a liability to the institution; and
(ii) all questions affecting the assets or liquidation of the institution, on such terms as may be agreed;
(f) take security for the discharge of any such call, debt, liability or claim and give a complete discharge for it.
(8) In addition to the powers conferred by subsection (7), the Board may when acting as a liquidator of an institution—
(a) set off payment made to a protected depositor out of the fund against any dividend subsequently determined as payable to such depositor;
(b) recover interest payable to the institution on loans, overdrafts and other credit facilities outstanding as at the date of liquidation;
(c) offset deposits and any other liabilities to the institution's customers against any loans or debts owed to the institution as at the date of liquidation;
(d) invest surplus funds in the liquidation account that are not immediately required for the purpose of financing day to day operations in short-term placements with reputable institutions approved by the Board or in such Government securities as the Board may determine.
(9) In the exercise of its powers as a liquidator, the Board may, by notice in writing, require any person who is or has at any time been a director, managing director, secretary, principal officer, manager, officer or employee, agent, accountant or auditor of the institution or any person who has custody
of any funds or other assets of the institution being liquidated to—
(a) give to the liquidator all reasonable assistance in connection with the liquidation;
(b) appear before the liquidator for examination concerning matters relevant to the liquidation;
(c) produce any records or documents that relate to the affairs of the institution being liquidated.
(10) In performing its functions under this section, the Board is subject to the supervision of the Central Bank.
(11) When the Board has been appointed as liquidator in respect of an institution, the powers of the Board are exercisable only if and to the extent authorised by the Central Bank.
(12) When the High Court has appointed a liquidator in respect of an institution, the powers of the liquidator are exercisable only if and to the extent authorised by the High Court.
(13) On the application of any interested party, the High Court may, if it considers it appropriate to do so, appoint a liquidation committee having the same powers as a liquidation committee appointed under Part VI of the Insolvency Act (Cap. 53).
(14) The Cabinet Secretary may make regulations generally for carrying out the liquidation of an institution under this section, and in doing so may—
(a) apply relevant provisions of the Insolvency Act (Cap. 53), with or without modifications; and
(b) include provision as to the manner and time in which depositors and other creditors of the institution (preferential or otherwise) are required to submit proofs of their debts to the Board.
(15) For the purpose of this section, an institution becomes insolvent if—
(a) it is unable to pay its debts within the meaning of section 383 of the Insolvency Act (Cap. 53);
(b) a liquidation order is made against it, or a resolution for creditors' voluntary liquidation is passed, under Part VI of the Insolvency Act (Cap. 53);
(c) it is unable to pay amounts due and payable to its depositors; or
(d) the Central Bank determines on investigation that the value of its assets is less than the amount of its liabilities.