banking

Who is caught

These instruments regulate deposit-taking and related banking business carried on in or from the Cayman Islands, together with the trust business regime that sits in the same statute. The Cayman Islands Monetary Authority (CIMA) is the administering regulator, and the Monetary Authority Law confirms that its remit covers banks, trust companies, credit unions, building societies and other financial services businesses.

Entities caught

• Banks and trust companies: Under the Banks and Trust Companies Act, no person may transact banking business, and no company may carry on trust business, from within the Islands without a CIMA licence. The Act defines A, B, Restricted B, Trust, Restricted Trust and Nominee (Trust) licence categories.
• Controlled subsidiaries: Controlled subsidiaries of licensees that rely on the section 5(3) exemption fall within scope by registering with CIMA rather than holding a full licence.
• Building societies: Mutual savings and loan institutions incorporated under the Building Societies Law, along with their directors, senior officers, members and auditors.
• Cooperative societies and credit unions: Cooperative societies generally, and credit unions specifically, which are subject to enhanced CIMA oversight under the Cooperative Societies Law.
• Development Bank: The Cayman Islands Development Bank, a statutory body established under the Development Bank Law.
• Money services businesses: Persons carrying on money transmission, cheque cashing, currency exchange, and issuance or redemption of money orders and traveller's cheques under the Money Services Act.
• Private trust companies: Cayman-incorporated companies conducting only connected trust business, which register with CIMA as PTCs.
• Account providers: Under the Dormant Accounts Law, banks, trust companies, credit unions, building societies, Class A insurers and other declared financial institutions holding customer accounts.

CIMA's prudential rules and statements of guidance apply on top of the licensing statutes. The Basel III leverage ratio, liquidity, large exposures, credit risk, and Pillar 3 disclosure instruments apply to banks licensed under the Banks and Trust Companies Act, while rules on credit risk and problem assets and on domestic systemically important institutions extend to banks, credit unions, building societies and the development bank.

Sources: Banks and Trust Companies Act (2025 Revision) · Building Societies Law (2020 Revision) · Cooperative Societies Law (2020 Revision) · Development Bank Law (2018 Revision) · Dormant Accounts Law (2011 Revision) · Monetary Authority Law (2020 Revision) · Money Services Act (2024 Revision) · Private Trust Companies Regulations (2026 Revision) · Rule on Domestic Systemically Important Deposit-Taking Institutions (Effective: 27 May 2024) · Rule - Management of Credit Risk and Problem Assets (December 2018) · Rules on Large Exposures and Credit Risk Concentration for Banks · Liquidity Risk Management - Rules and Guidelines (February 2022) · Basel III Framework: Leverage Ratio - Rules and Guidelines · Basel III Framework - Leverage Ratio Rules and Guidelines · Rules and Guidelines on Market Discipline Disclosure Requirements (Pillar 3)

Key duties

The core continuing duties are licensing or registration, payment of annual fees by fixed dates, maintenance of a Cayman physical presence, prudential capital and liquidity standards, board-approved risk management frameworks, and various notification and filing obligations.

Fees and dated filings

• Annual bank/trust fee: Every Banks and Trust Companies Act licence holder must pay the prescribed annual fee to the Financial Secretary on or before 15 January each year following the first grant. Money services licensees face the same 15 January deadline, with a monthly surcharge for late payment.
• Controlled subsidiary declaration: A registered controlled subsidiary must file an annual declaration and pay the prescribed fee at registration and on or before 31 January every year thereafter.
• PTC annual declaration: A private trust company must file an annual declaration in CIMA's approved form on or before 31 January each year, and pay an initial US$3,500 registration fee and a US$4,000 annual fee (late payment incurs a surcharge).
• Dormant account cycle: Account providers must notify or publish notice of dormant accounts on or before 31 July each year, transfer inactive monies to Government by 31 March of the following year, and submit a report and an annual certificate of compliance to the Minister and CIMA by 31 March, using the prescribed Forms 1, 2 and 3.

Licensing and presence

• Licence application: Applicants must apply in writing with prescribed particulars and pay the non-refundable application fee (for example, the Licence Applications and Fees Regulations set application fees such as US$10,000 for an 'A' licence alone and US$4,000 for a 'B' licence alone).
• Principal office and agent: Licensed banks and trust companies must maintain an approved principal office and an approved resident agent in the Islands, and obtain CIMA's prior approval before changing them.
• Physical presence: CIMA guidance requires Category 'B' banks that are not branches or subsidiaries of a foreign-licensed bank to keep a genuine place of business, observe a 'four eyes' principle, and hold records at their Cayman premises.

Prudential standards

• Leverage ratio: Banks within scope must maintain a minimum Basel III leverage ratio of 3% at all times, calculated on a quarter-end basis unless CIMA sets otherwise.
• Liquidity: Category 'A' Retail banks must meet the LCR and NSFR; Category 'A' Non-Retail and Category 'B' banks must hold liquid assets of at least 15% of qualifying liabilities under the Minimum Liquidity Ratio.
• Large exposures: Banks must observe limits including 25% of capital base for a single counterparty or connected group and 800% aggregate, report large exposures quarterly on Form BS, and notify CIMA immediately of any breach.
• D-SIDTI buffer: Institutions designated domestically systemically important must hold and maintain a Higher Loss Absorbency capital buffer and self-report immediately if capital falls to or below the required level.
• Net worth: Money services licensees must maintain net worth of at least thirty thousand dollars (or equivalent) at all times.

Governance and risk management

• Board-approved frameworks: Banks must establish and maintain board-approved strategies, policies and procedures for credit risk and problem assets, interest rate risk, country and transfer risk, operational risk, investments/securities/derivatives risk, and liquidity risk, proportionate to their size and complexity.
• Corporate governance and internal controls: Regulated entities must maintain a documented corporate governance framework and an adequate internal control system, with sector-specific controls for trust companies including segregation of client assets and money.
• Pillar 3 disclosure: Cayman-incorporated banks must publish standalone Pillar 3 disclosure reports, at minimum on their websites, and notify CIMA when published.
• Records and audit: Licensees must keep proper accounting records and submit audited accounts; the Banks and Trust Companies Act, Building Societies Law and Money Services Act each impose annual audit obligations.

Notifications and approvals

• Share and control changes: Prior CIMA approval is required for specified share issuances or transfers (for example, above 10% of capital or voting rights for money services licensees) and for director appointments; building societies require CIMA approval for share issue or transfer.
• Change notifications: Money services licensees must notify CIMA forthwith of changes to application information; PTCs must notify CIMA within 30 days of any change to registration information.
• Outsourcing: Regulated entities must notify CIMA in writing within a reasonable timeframe of any new or terminated outsourcing agreement for a material function and maintain a centralized log of material outsourcing arrangements.
• Succession and incident: CIMA guidance expects licensees to maintain a documented succession plan and to contact CIMA immediately where a sole or one-of-two shareholder or a director becomes incapacitated or is expected to be absent for a significant period.

Sources: Banks and Trust Companies (Licence Applications and Fees) Regulations (2026 Revision) · Banks and Trust Companies Act (2025 Revision) · Building Societies Law (2020 Revision) · Dormant Accounts (Forms) (Amendment) Regulations, 2010 · Dormant Accounts (Forms) Regulations, 2010 · Dormant Accounts Law (2011 Revision) · Money Services Act (2024 Revision) · Private Trust Companies Regulations (2026 Revision) · Statement of Guidance - Minimum Criteria for Maintaining Physical Presence for Banks (Section 6(6) BTCL) · Rule on Domestic Systemically Important Deposit-Taking Institutions (Effective: 27 May 2024) · Rule on Country and Transfer Risk Management for Banks · Rule - Management of Credit Risk and Problem Assets (December 2018) · Rule on Interest Rate Risk Management for Banks · Rule on Investments, Securities, and Derivatives Risk Management for Banks · Rules on Large Exposures and Credit Risk Concentration for Banks · Liquidity Risk Management - Rules and Guidelines (February 2022) · Rule on Operational Risk Management for Banks · Basel III Framework: Leverage Ratio - Rules and Guidelines · Basel III Framework - Leverage Ratio Rules and Guidelines · Statement of Guidance: Outsourcing – Regulated Entities (April 2023) · Rule on Corporate Governance for Regulated Entities (April 2023) · Rule and Statement of Guidance – Internal Controls for Regulated Entities · Statement of Guidance - Succession Planning (March 2019) · Rules and Guidelines on Market Discipline Disclosure Requirements (Pillar 3)

Exemptions and carve-outs

The instruments provide several licensing carve-outs and registration-based alternatives, plus specific exemptions within the prudential rules.

• Controlled subsidiaries: A controlled subsidiary relying on the section 5(3) exemption need not hold its own licence but must register with CIMA and file annually.
• Private trust companies: A Cayman company conducting only connected trust business can operate without a full trust licence provided it registers and remains registered as a PTC and does not solicit funds from the public or from non-connected persons.
• Trust business exemptions: The Banks and Trust Companies Act allows trust business to be carried on without a licence in prescribed exempt cases, and certain trust subsidiaries to be registered rather than licensed.
• Money services carve-outs: The Money Services Act does not apply to certain licensed banks and trust companies, building societies or cooperative societies unless they act as agents or franchise holders of a money services business, and licensed money services businesses are exempt from needing a separate Trade and Business Licensing Act licence.
• Cooperative societies stamp duty: Instruments executed by or on behalf of a registered cooperative society relating to its business are exempt from stamp duty.
• Pillar 3: Banks may be individually exempted from the Pillar 3 market discipline disclosure requirements by CIMA.
• Large exposures reliefs: The large exposures rules provide full or partial exemptions for cash-secured and securities-secured exposures and for certain Zone A/B sovereign, interbank and treasury-role exposures, subject to conditions, and apply a lighter regime to bank branches.
• Fee waivers: The Governor may waive or reduce licence fees for licensees based in Cayman Brac or Little Cayman.
• Outsourcing guidance: CIMA's outsourcing guidance excludes regulated mutual funds, Private Trust Companies and Private Funds from its scope.

Sources: Banks and Trust Companies (Licence Applications and Fees) Regulations (2026 Revision) · Banks and Trust Companies Act (2025 Revision) · Cooperative Societies Law (2020 Revision) · Money Services Act (2024 Revision) · Private Trust Companies Regulations (2026 Revision) · Rules on Large Exposures and Credit Risk Concentration for Banks · Statement of Guidance: Outsourcing – Regulated Entities (April 2023) · Rules and Guidelines on Market Discipline Disclosure Requirements (Pillar 3)

Enforcement and penalties

Enforcement runs through both criminal offences in the sector statutes and CIMA's administrative fines regime, backed by supervisory powers including directions, investigation, search, and application to the Grand Court.

• Statutory offences: The Banks and Trust Companies Act creates offences for contraventions such as carrying on unlicensed banking or trust business and providing false or misleading information. The Building Societies Law and Cooperative Societies Law contain offence and penalty provisions for fraud, falsification of documents, false returns and obstruction of investigations.
• Money services offences: Breaches of key Money Services Act provisions (for example, operating without a licence, false advertising as a money services business, and non-compliance with policy directions) are criminal offences on summary conviction, including continuing daily fines, with a monthly surcharge for late fee payment.
• Dormant accounts fines: The Dormant Accounts Law imposes fines of $20,000 for failures such as not notifying account holders, not publishing required notices, not transferring dormant funds, not reporting to the Minister and CIMA, or not submitting an annual certificate of compliance.
• Administrative fines: Under the Monetary Authority Law and the Administrative Fines Regulations, CIMA may impose administrative fines for breach of a 'prescribed provision.' Each listed breach is classified as minor, serious or very serious and attracts a fixed, fixed-continuing or discretionary fine. A recipient of a breach notice may rectify within 30 days, reply within the stated period, and seek internal review (fixed fines) or appeal to the Grand Court (discretionary fines); an imposed fine is a debt to the Crown.
• Rule breaches: Breaches of CIMA's prudential Rules (for example, leverage, liquidity, large exposures, credit risk, operational, interest rate, and country/transfer risk rules) are dealt with under CIMA's Enforcement Manual and the powers in the relevant sectoral laws and the Monetary Authority Law.
• Surcharges: Late payment of annual fees attracts monthly surcharges under the Money Services Act, the Licence Applications and Fees Regulations, and the Private Trust Companies Regulations.

The summaries do not set out a single consolidated schedule of specific administrative fine amounts; the Administrative Fines Regulations describe the classification and process rather than fixed figures in the text provided.

Sources: Banks and Trust Companies Act (2025 Revision) · Building Societies Law (2020 Revision) · Cooperative Societies Law (2020 Revision) · Dormant Accounts Law (2011 Revision) · Monetary Authority (Administrative Fines) Regulations (2025 Revision) · Monetary Authority Law (2020 Revision) · Money Services Act (2024 Revision) · Private Trust Companies Regulations (2026 Revision) · Rule - Management of Credit Risk and Problem Assets (December 2018)