Regulatory Alerts2012-01-01
Bank of Zambia Circular 04/2012: Collateral Account for the Overnight Lending Facility
The Bank of Zambia issued Circular 04/2012 to modify the operational requirements for its Overnight Lending Facility by eliminating the need for commercial banks to maintain separate OLF Securities Accounts. Instead, banks must now transfer sufficient pledged securities to the BOZ OLF Collateral Account at the point of accessing the loan, with the Bank returning these securities the following day upon full repayment. The circular also stipulates that pledged securities are forfeited to the Bank in the event of default and introduces a modified application form, OLF L1, to accommodate these procedural changes.
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