Banking Act 2009 (c. 1)

Part 2 U.K. Bank Insolvency

Modifications etc. (not altering text)

C1 Pt. 2 applied (with modifications) by 1986 c. 53, s. 90C (as inserted (29.3.2009) by Building Societies (Insolvency and Special Administration) Order 2009 (S.I. 2009/805), art. 2)

C2 Pt. 2 modified (29.3.2009) by Building Societies (Insolvency and Special Administration) Order 2009 (S.I. 2009/805), Sch. 1 para. 1 (as amended (7.4.2010) by Building Societies (Insolvency and Special Administration) (Amendment) Order 2010 (S.I. 2010/1189), arts. 1(2), 2 and amended (7.4.2017) by The Deregulation Act 2015, the Small Business, Enterprise and Employment Act 2015 and the Insolvency (Amendment) Act (Northern Ireland) 2016 (Consequential Amendments and Transitional Provisions) Regulations 2017 (S.I. 2017/400), regs. 1(2), 8)

C3 Pt. 2 restricted (7.1.2010) by Banking Act 2009 (Exclusion of Insurers) Order 2010 (S.I. 2010/35), arts. 1, 2

C4 Pt. 2 applied (with modifications) (8.2.2011) by The Investment Bank Special Administration Regulations 2011 (S.I. 2011/245), reg. 1, Sch. 1 paras. 6, 7

Bank insolvency order U.K.

94 The order U.K.

(1) A bank insolvency order is an order appointing a person as the bank liquidator of a bank.

(2) A person is eligible for appointment as a bank liquidator if qualified to act as an insolvency practitioner [F1 in relation to the bank].

(3) An appointment may be made only if the person has consented to act.

(4) A bank insolvency order takes effect in accordance with section 98; and—

(a) the process of a bank insolvency order having effect may be described as “bank insolvency” in relation to the bank, and

(b) while the order has effect the bank may be described as being “in bank insolvency”.

Textual Amendments

F1 Words in s. 94(2) inserted (7.4.2017) by The Deregulation Act 2015, the Small Business, Enterprise and Employment Act 2015 and the Insolvency (Amendment) Act (Northern Ireland) 2016 (Consequential Amendments and Transitional Provisions) Regulations 2017 (S.I. 2017/400), regs. 1(2), 5(2)

Commencement Information

I1 S. 94 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 2

95 Application U.K.

(1) An application for a bank insolvency order may be made to the court by—

(a) the Bank of England,

(b) the [F2 PRA], or

(c) the Secretary of State.

(2) An application must nominate a person to be appointed as the bank liquidator.

(3) The bank must be given notice of an application, in accordance with rules under section 411 of the Insolvency Act 1986 (as applied by section 125 below).

Textual Amendments

F2 Word in s. 95(1)(b) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 17 para. 32 (with Sch. 20); S.I. 2013/423, art. 3, Sch.

Commencement Information

I2 S. 95 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 2

96 Grounds for applying U.K.

(1) In this section—

(a) Ground A is that a bank is unable, or likely to become unable, to pay its debts,

(b) Ground B is that the winding up of a bank would be in the public interest, and

(c) Ground C is that the winding up of a bank would be fair.

(2) The Bank of England may apply for a bank insolvency order only if—

(a) F3 ... the [F4 PRA] is satisfied that [F5 Condition 1 in section 7 is met], and

(b) the Bank of England is satisfied—

[F6 (ai) that Condition 2 in section 7 is met,]

(i) that the bank has eligible depositors, and

(ii) that Ground A or C applies.

(3) The [F4 PRA] may apply for a bank insolvency order only if—

(a) the Bank of England [F7 is satisfied that Condition 2 in section 7 is met, and]

(b) the [F4 PRA] is satisfied—

(i) that [F8 Condition 1 in section 7 is met],

(ii) that the bank has eligible depositors, and

(iii) that Ground A or C applies.

(4) The Secretary of State may apply for a bank insolvency order only if satisfied—

(a) that the bank has eligible depositors, and

(b) that Ground B applies.

(5) The sources of information on the basis of which the Secretary of State may be satisfied of the matters specified in subsection (4) include those listed in section 124A(1) of the Insolvency Act 1986 (petition for winding up on grounds of public interest).

Textual Amendments

F3 Words in s. 96(2)(a) omitted (1.3.2017) by virtue of Bank of England and Financial Services Act 2016 (c. 14), s. 41(3), Sch. 2 para. 56(2) (with Sch. 3); S.I. 2017/43, reg. 2(g)

F4 Word in s. 96 substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 17 para. 33 (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F5 Words in s. 96(2)(a) substituted (1.1.2015) by The Bank Recovery and Resolution Order 2014 (S.I. 2014/3329), arts. 1(2), 104(2)(i)

F6 S. 96(2)(b)(ai) inserted (1.1.2015) by The Bank Recovery and Resolution Order 2014 (S.I. 2014/3329), arts. 1(2), 104(2)(ii)

F7 Words in s. 96(3)(a) substituted (1.3.2017) by Bank of England and Financial Services Act 2016 (c. 14), s. 41(3), Sch. 2 para. 56(3) (with Sch. 3); S.I. 2017/43, reg. 2(g)

F8 Words in s. 96(3)(b)(i) substituted (1.1.2015) by The Bank Recovery and Resolution Order 2014 (S.I. 2014/3329), arts. 1(2), 104(3)(b)

Commencement Information

I3 S. 96 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 2

97 Grounds for making U.K.

(1) The court may make a bank insolvency order on the application of the Bank of England or the [F9 PRA] if satisfied—

(a) that the bank has eligible depositors, and

(b) that Ground A or C of section 96 applies.

(2) The court may make a bank insolvency order on the application of the Secretary of State if satisfied—

(a) that the bank has eligible depositors, and

(b) that Grounds B and C of section 96 apply.

(3) On an application for a bank insolvency order the court may—

(a) grant the application in accordance with subsection (1) or (2),

(b) adjourn the application (generally or to a specified date), or

(c) dismiss the application.

Textual Amendments

F9 Word in s. 97(1) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 17 para. 34 (with Sch. 20); S.I. 2013/423, art. 3, Sch.

Commencement Information

I4 S. 97 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 2

98 Commencement U.K.

(1) A bank insolvency order shall be treated as having taken effect in accordance with this section.

(2) In the case where—

(a) notice has been given to the [F10 PRA] under section 120 of an application for an administration order or a petition for a winding up order, and

(b) the [F10 PRA] or the Bank of England applies for a bank insolvency order in the period of 2 weeks specified in Condition 3 in that section,

the bank insolvency order is treated as having taken effect when the application or petition was made or presented.

(3) In any other case, the bank insolvency order is treated as having taken effect when the application for the order was made.

(4) Unless the court directs otherwise on proof of fraud or mistake, proceedings taken in the bank insolvency, during the period for which it is treated as having had effect, are treated as having been taken validly.

Textual Amendments

F10 Word in s. 98(2) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 17 para. 35 (with Sch. 20); S.I. 2013/423, art. 3, Sch.

Commencement Information

I5 S. 98 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 2