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Bank Act (S.C. 1991, c. 46)

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Act current to 2021-12-23 and last amended on 2021-06-30. Previous Versions

PART XII.1Authorized Foreign Banks (continued)

Business and Powers (continued)

Marginal note:Restriction on receivers

 An authorized foreign bank shall not, in respect of its business in Canada, grant to a person the right to appoint a receiver or a receiver and manager of the property or of the business of the authorized foreign bank.

  • 1991, c. 46, s. 553
  • 1999, c. 28, s. 35

Marginal note:Restriction on partnerships

  •  (1) Except with the approval of the Superintendent, an authorized foreign bank may not, in respect of its business in Canada, be a general partner in a limited partnership or a partner in a general partnership.

  • Meaning of general partnership

    (2) For the purposes of subsection (1), general partnership means any partnership other than a limited partnership.

  • 1999, c. 28, s. 35
  • 2001, c. 9, s. 147

Definition of non-WTO Member authorized foreign bank

  •  (1) In this section, non-WTO Member authorized foreign bank means an authorized foreign bank that is not controlled by a WTO Member resident.

  • Marginal note:Limitation on branches in Canada of non-WTO Member authorized foreign bank

    (2) No non-WTO Member authorized foreign bank shall have any branch in Canada, other than its principal office and one branch, without the approval of the Minister.

  • 1991, c. 46, s. 554
  • 1999, c. 28, s. 35

Marginal note:Special security

 Sections 425 to 436, as they exist from time to time, apply, with any modifications that the circumstances require, in respect of the carrying on of business in Canada by an authorized foreign bank as if a reference to “bank” in any of those provisions were a reference to “authorized foreign bank”.

  • 1991, c. 46, s. 555
  • 1999, c. 28, s. 35

 [Repealed, 1999, c. 28, s. 35]

Deposit Acceptance

Marginal note:Deposit acceptance

  •  (1) Subject to this Part, an authorized foreign bank may, without the intervention of any other person,

    • (a) accept a deposit from any person whether or not the person is qualified by law to enter into contracts; and

    • (b) pay all or part of the principal of the deposit and all or part of the interest on it to or to the order of that person.

  • Marginal note:Exception

    (2) Paragraph (1)(b) does not apply if, before payment, the money deposited in the authorized foreign bank pursuant to paragraph (1)(a) is claimed by some other person

    • (a) in any action or proceeding to which the authorized foreign bank is a party and in respect of which service of a writ or other process originating that action or proceeding has been made on the authorized foreign bank, or

    • (b) in any other action or proceeding pursuant to which an injunction or order made by the court requiring the authorized foreign bank not to make payment of that money or make payment of it to some person other than the depositor has been served on the authorized foreign bank,

    and, if a claim is made, the deposited money may be paid to the depositor with the consent of the claimant, or to the claimant with the consent of the depositor.

  • Marginal note:Execution of trust

    (3) An authorized foreign bank is not, in respect of its business in Canada, bound to see to the execution of any trust to which a deposit made under the authority of this Act is subject.

  • Marginal note:Payment when authorized foreign bank has notice of trust

    (4) Subsection (3) applies regardless of whether the trust is express or arises by the operation of law, and it applies even when the authorized foreign bank has notice of the trust if it acts on the order of or under the authority of the holder or holders of the account into which the deposit is made.

  • 1991, c. 46, s. 556
  • 1999, c. 28, s. 35
  • 2001, c. 9, s. 148

Unclaimed Balances

Marginal note:Unclaimed balances

  •  (1) Where

    • (a) a deposit has been made in Canada that is payable in Canada in Canadian currency and in respect of which no transaction has taken place and no statement of account has been requested or acknowledged by the creditor during a period of ten years

      • (i) from the day on which the fixed period terminated, in the case of a deposit made for a fixed period, and

      • (ii) from the day on which the last transaction took place or a statement of account was last requested or acknowledged by the creditor, whichever is later, in the case of any other deposit, or

    • (b) a cheque, draft or bill of exchange (including any of those instruments drawn by one branch of an authorized foreign bank on another of its branches but not including one issued in payment of a dividend on the capital of an authorized foreign bank) payable in Canada in Canadian currency has been issued, certified or accepted by an authorized foreign bank in Canada and no payment has been made in respect of it for a period of ten years after the date of issue, certification, acceptance or maturity, whichever is later,

    the authorized foreign bank shall pay to the Bank of Canada not later than December 31 in each year an amount equal to the principal amount of the deposit or instrument, plus interest, if any, calculated in accordance with the terms of the deposit or instrument, and payment accordingly discharges the authorized foreign bank from all liability in respect of the deposit or instrument.

  • Marginal note:Provision of information

    (2) An authorized foreign bank shall, on making a payment under subsection (1), provide the Bank of Canada, for each deposit or instrument in respect of which the payment is made, with the following information current as of the day the payment is made, in so far as it is known to the authorized foreign bank:

    • (a) in the case of a deposit,

      • (i) the name of the depositor in whose name the deposit is held,

      • (ii) the recorded address of the depositor,

      • (iii) the outstanding amount of the deposit, and

      • (iv) the branch of the authorized foreign bank at which the last transaction took place in respect of the deposit, and the date of that last transaction; and

    • (b) in the case of an instrument,

      • (i) the name of the person to whom or at whose request the instrument was issued, certified or accepted,

      • (ii) the recorded address of that person,

      • (iii) the name of the payee of the instrument,

      • (iv) the amount and date of the instrument,

      • (v) the name of the place where the instrument was payable, and

      • (vi) the branch of the authorized foreign bank at which the instrument was issued, certified or accepted.

  • Marginal note:Copies of signature cards and signing authorities

    (2.1) An authorized foreign bank shall, on written request by the Bank of Canada, provide the Bank of Canada with copies of signature cards and signing authorities relating to any deposit or instrument in respect of which it has made a payment under subsection (1). If it does not have any with respect to a deposit or instrument to which the request relates, it shall so inform the Bank of Canada.

  • Marginal note:Payment to claimant

    (3) Subject to section 22 of the Bank of Canada Act, where payment has been made to the Bank of Canada under subsection (1) in respect of any deposit or instrument, and if payment is demanded or the instrument is presented at the Bank of Canada by the person who, but for that section, would be entitled to receive payment of the deposit or instrument, the Bank of Canada is liable to pay, at its agency in the province in which the deposit or instrument was payable, an amount equal to the amount so paid to it together with interest, if interest was payable under the terms of the deposit or instrument,

    • (a) for a period not exceeding ten years from the day on which the payment was received by the Bank of Canada until the date of payment to the claimant; and

    • (b) at any rate and computed in any manner that the Minister determines.

  • Marginal note:Enforcing liability

    (4) The liability of the Bank of Canada under subsection (3) may be enforced by action against the Bank of Canada in the court in the province in which the deposit or instrument was payable.

  • 1991, c. 46, s. 557
  • 1999, c. 28, s. 35
  • 2007, c. 6, s. 87

Marginal note:Notice of unpaid amount

  •  (1) An authorized foreign bank shall mail to each person

    • (a) to whom a deposit referred to in paragraph 557(1)(a) is payable, or

    • (b) to whom or at whose request an instrument referred to in paragraph 557(1)(b) was issued, certified or accepted,

    at the person’s recorded address, in so far as is known to the authorized foreign bank, a notice stating that the deposit or instrument remains unpaid.

  • Marginal note:When notice to be sent

    (2) The notice must be sent during the month of January next following the end of the first two-year period, during the month of January next following the end of the first five-year period and also during the month of January next following the end of the first nine-year period

    • (a) after the fixed period has terminated, in the case of a deposit made for a fixed period;

    • (b) in respect of which no transaction has taken place and no statement of account has been requested or acknowledged by the creditor, in the case of any other deposit; and

    • (c) in respect of which the instrument has remained unpaid, in the case of a cheque, draft or bill of exchange.

  • Marginal note:Notification of transfer to the Bank of Canada

    (3) The notice to be sent during the month of January next following the end of the first nine-year period determined under paragraphs (2)(a) to (c), as the case may be, must also

    • (a) [Not in force]

    • (b) include the mailing address and websites where information can be obtained on how to claim the unpaid deposit or instrument.

  • 1991, c. 46, ss. 558, 580
  • 1996, c. 6, s. 20
  • 1999, c. 28, s. 35
  • 2007, c. 6, s. 88

Accounts

Marginal note:Account charges

 An authorized foreign bank shall not, directly or indirectly, charge or receive any sum for the keeping of an account unless the charge is made by express agreement between the authorized foreign bank and a customer or by order of a court.

  • 1991, c. 46, s. 559
  • 1997, c. 15, s. 90
  • 1999, c. 28, s. 35

Marginal note:Disclosure on opening account

  •  (1) An authorized foreign bank shall not open or maintain an interest-bearing deposit account in Canada in the name of any natural person unless it discloses, in accordance with the regulations, to the person who requests the opening of the account, the rate of interest applicable to the account and how the amount of interest to be paid is to be calculated.

  • Marginal note:Exception

    (2) Subsection (1) does not apply in respect of an interest-bearing deposit account that is opened with a deposit in excess of $150,000 or any greater amount that is prescribed.

  • 1991, c. 46, s. 560
  • 1999, c. 28, s. 35
  • 2001, c. 9, s. 150

Marginal note:Disclosure in advertisements

 No person shall authorize the publication, issue or appearance of any advertisement in Canada that indicates the rate of interest offered by an authorized foreign bank on an interest-bearing deposit or a debt obligation unless the advertisement discloses, in accordance with the regulations, how the amount of interest is to be calculated.

  • 1991, c. 46, s. 561
  • 1999, c. 28, s. 35

Marginal note:Disclosure regulations

 The Governor in Council may make regulations respecting

  • (a) the time and place at which and the form and manner in which disclosure is to be made by an authorized foreign bank of

    • (i) interest rates applicable to debts of the authorized foreign bank and deposits with it, and

    • (ii) the manner in which the amount of interest paid is to be calculated; and

  • (b) any other matters or things that may be necessary to carry out the requirements of sections 560 and 561.

  • 1991, c. 46, s. 562
  • 1999, c. 28, s. 35
  • 2012, c. 5, s. 63

Definition of personal deposit account

 For the purposes of sections 564 to 566, “personal deposit account means a deposit account in the name of one or more natural persons that is kept by that person or those persons for a purpose other than that of carrying on business.

  • 1991, c. 46, s. 563
  • 1999, c. 28, s. 35

Marginal note:Disclosure required on opening a deposit account

  •  (1) Subject to subsections (2) to (4), an authorized foreign bank shall not open a deposit account in the name of a customer unless, at or before the time the account is opened, it provides in writing to the individual who requests the opening of the account

    • (a) a copy of the account agreement;

    • (b) information about all charges applicable to the account;

    • (c) information about how the customer will be notified of any increase in those charges and of any new charges applicable to the account;

    • (d) information about the authorized foreign bank’s procedures relating to complaints about the application of any charge applicable to the account; and

    • (e) any other information that may be prescribed.

  • Marginal note:Exception

    (2) If a deposit account is not a personal deposit account and the amount of a charge applicable to the account cannot be established at or before the time the account is opened, the authorized foreign bank shall, as soon as is practicable after the amount is established, provide the customer in whose name the account is kept with a notice in writing of the amount of the charge.

  • Marginal note:Exception

    (3) If an authorized foreign bank has a deposit account in the name of a customer and the customer by telephone requests the opening of another deposit account in the name of the customer and the authorized foreign bank has not complied with subsection (1) in respect of the opening of that other account, the authorized foreign bank shall not open the account unless it provides the customer orally with any information prescribed at or before the time the account is opened.

  • Marginal note:Disclosure in writing

    (4) If an authorized foreign bank opens an account under subsection (3), it shall, not later than seven business days after the account is opened, provide to the customer in writing the agreement and information referred to in subsection (1).

  • Marginal note:Right to close account

    (5) A customer may, within 14 business days after a deposit account is opened under subsection (3), close the account without charge and in such case is entitled to a refund of any charges related to the operation of the account, other than interest charges, incurred while the account was open.

  • Marginal note:Regulations

    (6) For the purposes of subsection (4), the Governor in Council may make regulations prescribing circumstances in which, and the time when, the agreement and information will be deemed to have been provided to the customer.

  • 1991, c. 46, s. 564
  • 1999, c. 28, s. 35
  • 2001, c. 9, s. 151
 
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