The law that details the Cook Islands Banking Act 1981 and the 2003 Bank Act provided for the enactment of a bank license and confidentiality of the banks.
Section 4 of the Bank Act 2003 stipulates three different licenses: domestic banking licenses, international banking licenses, and international restricted banking licenses.
The domestic banking permit entitles the licensed entity to conduct domestic banking activities on the Cook Islands, in any currency, with residents or visitors to the Cook Islands. This applies to the three local banks, which up to this point had been authorized under the Banking Act 1969, which is now canceled by the Act.
An international Cook Islands banking license permits the licensed entity, under the International Company Act, the International Trusts Act, or the International Partnership Act, to conduct business with individuals who are not resident in the Cook Islands or the international companies, partnerships, and trusts incorporated/registered at the Cook Islands. Until now, the Offshore Banking Act 1981- 1982 repealed by the Act had permitted these banking entities.
Another class accessible to foreign banks authorized in their home countries wishing to continue banking through the Cook Islands is a confined international banking license. Such licensees can just work in the Cook Islands through a trustee company authorized under the Trustee Companies Act.
All license applications are now before the FSC with the passage of the Financial Supervisory Commission (FSC) Act 2003. Every year, licensed banks are required to submit their audited accounts.