Regulatory Alerts1994-04-04
Instruction No. 1/94 on Banking Technical Norms
The National Bank of Angola issued Instruction No. 1/94 to mandate that financial institutions adhere to general principles of good banking practice, specifically prohibiting operations that violate selectivity, security, liquidity, or risk diversification, as well as practices like loan rollover with capitalized interest, unauthorized overdrafts, and dealings with non-compliant or insufficiently funded clients. The directive requires institutions to monthly report total risk assets, capital and reserve values, and detailed lists of their ten largest debtors and twenty largest depositors to the Banking Supervision Directorate. Non-compliance with these operational standards and reporting obligations constitutes a punishable offense under the Organic Law of the National Bank of Angola and the Financial Institutions Law.
INSTRUCTION NO. 1/94 Subject: FINANCIAL SYSTEM
- Operations
- Banking Technical Norms
Whereas Financial Institutions are obliged, under Article 20 of Law No. 5/91 of April 20, to observe operational standards that ensure their solvency and liquidity; Whereas, among such standards, those relating to good banking practice are included; In the exercise of the competence established in Article 21 of the Organic Law of the National Bank of Angola,
I DETERMINE:
Article 1 Financial Institutions are obliged to observe, in their operations of any nature, the general principles of good banking practice, and are therefore prohibited from: a) carrying out operations that do not comply with the principles of selectivity, security, liquidity, and risk diversification; b) renewing loans with the incorporation of interest and charges from the previous transaction; c) admitting overdraft balances in deposit accounts, or exceeding the limit in loan accounts; d) carrying out operations with clients who have registration restrictions or lack an updated registration file; e) carrying out operations with clients issuing checks without sufficient funds; f) carrying out credit operations, of any nature, without the formalization of a contract, negotiable instrument, or adequate document representing the debt.
Article 2 Financial Institutions shall monthly submit to the Banking Supervision Directorate the following information: a) total risk assets and the value of capital and reserves; b) detailed list of the ten largest debtors; c) detailed list of the twenty largest depositors;
Article 3 Failure to comply with these provisions shall be considered an offense punishable under Article 28 of the Organic Law of the National Bank of Angola and Articles 19, 41, 42, and 43 of the Financial Institutions Law.
Article 4 This Instruction enters into force immediately.
Luanda, April 4, 1994
THE GOVERNOR GENEROSO HERMENEGILDO G. DE ALMEIDA '., "' . .. ..