Regulatory Alerts2016-03-08
Notice No. 01/96 on Interest Rates
The Bank of Cape Verde issued Notice No. 01/96 to deregulate interest rates on time deposits exceeding 180 days and up to one year, empowering credit institutions to set passive operation rates freely according to market competition. The notice explicitly revokes conflicting provisions from Notices 03/95, 04/94, and 07/94 published in the Official Gazette. It takes immediate effect under Article 31 of the Bank's Organic Law, replacing administrative rate fixation with market-driven pricing.
BANK OF CAPE VERDE Notice No. 01/96
The measures adopted within the framework of the development of the Cape Verdean financial market have led to the emergence of new financial products that offer investors a varied choice for their investments regarding interest rates, terms, risks, etc. On the other hand, the advent of more institutions in the banking system and the free competition conditions under which they operate in raising funds converge to make it unnecessary to administratively fix a minimum remuneration rate for time deposits exceeding 180 days and up to one year. Thus, the Bank of Cape Verde, in the exercise of the competence attributed to it by paragraph e), No. 1 of Article 31 of its Organic Law, determines the following:
- The interest rates for passive operations shall be established by credit institutions;
- The provisions contained in Notices Nos. 03/95, 04/94 and 07/94, published in the First Series of the Official Gazette Nos. 11/95, 10/94 and 31/94, which contradict the provisions of this Notice, are hereby revoked.
- This Notice enters into force immediately.
Office of the Governor of the Bank of Cape Verde, in Praia, on January 30, 1996.—The Governor, Oswaldo Miguel Sequeira.