Regulatory Alerts2021-12-21
Instruction No. 006-DOM/21 of 21 December 2021 Governing the Granting of the Emergency Liquidity Facility to Credit Institutions by Banky Foiben'i Madagasikara
Banky Foiben'i Madagasikara issues Instruction No. 006-DOM/21 to establish the framework, conditions, and procedures for granting the Emergency Liquidity Facility (ELF) to solvent credit institutions experiencing temporary liquidity stress. The facility is strictly limited to addressing systemic liquidity crises or contagious bank runs, explicitly prohibiting its use for recapitalization or resolving capital deficiencies. Borrowing institutions must pledge collateral valued at 120% of the loan amount, pay an interest rate set at the marginal lending rate plus 1.5 percentage points, and obtain prior approval from the Banking and Financial Supervision Commission for any loan renewals.
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