rundheersing bheenick : thinking globally, banking locally, and branching out … address by professor rundheersing bheenick, governor of the bank of mauritius, at the official opening of grand bay branch of the hsbc, grand bay, 18 december 2007. * * * i ’ m delighted to be here, opening a new branch, of a famous bank. the history of the hsbc group, in mauritius, can be traced back to 1859, when the chartered mercantile bank of india, london and china, established a branch in port louis. one well - known project, that this bank assisted in financing, was the construction of the port louis to curepipe section of the railway, in 1864. those were the days! and how we struggle now to get back on to the fast track! opening a new branch is always a pleasure ; one only to be surpassed, for a central banker, by opening a new bank! this year we have done both. i come to open this branch, having only recently opened a newly - licensed commercial bank in the country, and having just laid the foundation stone of a new branch of the bank of mauritius in rodrigues. it is one of those habits i don ’ t want to break. i hope this trend, reinforced today, in our 40th anniversary year, will be continued in 2008, the 40th anniversary year of the independence of mauritius, bringing new life and strength to the banking sector. about this time last year, contemplating the prospect of becoming governor of a central bank, i speculated that my life might be even more exciting than that of james bond. you will recall that 007 had a singular license to kill. we central bankers have a triple license, and it seems none of then come with the risks bond was running from fast cars, faster guns, and still faster women. the dream of a central banker is first to have that wonderful midas touch, a golden gift, at this time of the year : • the license to print money! and then he gets that really expansive gift : • the license to open new banks, and finally the third great gift, that salutary power : • the license to close them again! but you may be pleased to know, that today, as your invited guest, on this opening day of a new branch, i have brought none of these licenses with me! i must say i am glad to be here as a guest of an expanding bank, which has such a well

understood that the bank needed more specific provisions in the banking legislation itself given the systemic importance of banks, and the legislative amendments were approved illico presto. the new provisions are quite wide - ranging. they allow a financial institution to restructure its business with the approval of the central bank. they also empower the central bank to direct a bank to restructure its operations. these provisions make the restructuring process clear, leaving little room for controversy or for differing interpretations. when barclays petitioned the court under the companies act, there had been different interpretations of the proper procedure to be followed. objections were raised by some parties. i thank those parties who bis central bankers ’ speeches objected to barclays ’ initiatives, as they have indirectly contributed to a rapid resolution of an issue that would otherwise have dragged on and on. with the new law and the clarity it now provides, such a situation should not arise again. however, i am told lawyers are reserving their rights to object – this is fair enough. lawyers will be lawyers. as a breed, lawyers do not like clarity. if laws were always crystal clear, just imagine what a negative impact this would have on the demand for highly - paid legal services! the legislative amendment has positive repercussions on the ease of doing business in the country. it highlights the capacity of mauritian authorities to expedite changes in the legal framework. it projects mauritius as a jurisdiction capable of coming up with avant - gardiste legislation, which allows it to take appropriate, timely and specific actions. our banks continue to perform well and have proved to be very resilient. the global competitiveness report 2012 – 2013 of the world economic forum ranks our banking sector 15th out of 144 in terms of the soundness of banks. in 2012, seven of our banks ranked among the top 100 banks in africa according to the magazine african banker, a major achievement for a small country like ours with a gdp of only 0. 02 % of the gdp of the african continent as a whole. banks everywhere remain fragile institutions on account of their high leverage and the constant concern over the trade - off between profitability and liquidity. we, as regulator, want our domestic banks to go beyond narrow profitability concerns and to become internationally competitive. to do this, they need to become more efficient and come closer to international benchmarks. therefore, the regulator needs to be constantly on the alert against vulnerabilities and possible weaknesses and malpractices within