ABSTRACT
This chapter has examined the legal meaning of the terms ‘bank’ and ‘banking business’. It was argued that the definitions of ‘bank’ and ‘banking business’ must be compatible with the practice of banking in a particular country. However, a question could be raised: how can we tell, for example, if a corporate entity that has gone bust is a bank for purposes of insolvency distributions? Is it not the position in many countries that in order to protect investors and ensure investor confidence in the market, the regulatory authority in charge of banking supervision can either close down an insolvent bank or supervise its reorganisation? Indeed, it is such issues that underpin the importance of defining what constitutes a ‘bank’ and ‘banking business’. Thus, this chapter has shown the relevance of defining the terms ‘bank’ and ‘banking business’, and has further endeavoured to provide meaningful definitions of the terms.
