Bank of Zambia Circular 02/2021 on Over-the-Counter Foreign Currency Cash Transaction Limits

[Logo: BANK OF ZAMBIA]

BANK OF ZAMBIA
OFFICE OF THE DEPUTY GOVERNOR - OPERATIONS

BOZ/EXEC/DGO/nbfis/am

May 24, 2021

NB CIRCULAR No. : 02/2021

TO : All Bureaux De Change and Commercial Banks

OVER THE COUNTER FOREIGN CURRENCY CASH TRANSACTION LIMITS

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1 Purpose

This circular serves to give notice of the changes in the over-the-counter foreign currency cash transaction limits pursuant to regulations 6 and 7 of the Banking and Financial Services (Bureau de Change) Regulations. This circular supersedes NB Circular No. 02/2013.

2 Effective Date

The new over-the-counter foreign currency cash transaction limits in this circular shall take effect from 1 June 2021.

3 Observation Period

The Bank of Zambia will observe the new over-the-counter foreign currency cash transaction limits for a period of two months to 31 July 2021. The Bank of Zambia will take into account any feedback received during the observation period to inform any further review of the foreign currency cash transaction limits.

4 Bureau de Change Foreign Currency Cash Transaction Limits

The bureau de change over-the-counter foreign currency cash transaction limits with commercial banks and individuals shall be as follows:

4.1 Bureau de change Transactions with Commercial Banks

The aggregate over-the-counter foreign currency cash transactions of a bureau de change with commercial banks shall not exceed the lower of the equivalent of US$20,000 or 70 percent of its regulatory capital per day. On a calendar quarter basis, the Bank of Zambia shall compute the regulatory capital positions of bureaux de change to which the transaction limits shall be anchored.

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Bank Square, Cairo Road, P.O. Box 30080, Lusaka, Zambia Tel:+260-211-399303, 399300, E-mail: dgo@boz.zm. Web: http://www.boz.zm

NB Circular No. 02/2021 - 2 - May 24, 2021

4.2 Bureau De Change Foreign Currency Cash Transaction Limit with an Individual

The aggregate foreign currency cash transactions of a bureau de change with an individual shall not exceed the equivalent of US$5,000 per day.

5 Commercial Banks Foreign Currency Cash Transaction Limits

The commercial bank over-the-counter foreign currency cash transactions limits shall be as follows:

5.1 Foreign Currency Cash Transaction Limit with an Account Holder other than a Bureau de Change

The aggregate over-the-counter foreign currency cash transactions of a commercial bank with an account holder shall not exceed the equivalent of US$10,000 per day.

5.2 Foreign Currency Cash Transaction Limit with a Non-Account Holder

The over-the-counter foreign currency cash transaction of a commercial bank with an individual who is not an account holder shall not exceed the equivalent of US$5,000 per day.

6 Bureau de Change Open Foreign Exchange Position Limit

The foreign exchange open position of a bureau de change at the close of business on any day shall not exceed 50 percent of its regulatory capital. On a calendar quarter basis, the Bank of Zambia shall compute the regulatory capital positions of bureaux de change to which the foreign exchange open position limits shall be anchored.

[Signature]

Francis Chipimo (PhD)
DEPUTY GOVERNOR – OPERATIONS

Cc Governor
Director – Non-Bank Financial Institutions Supervision Director – Bank Supervision

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Bank Square, Cairo Road, P.O. Box 30080, Lusaka, Zambia Tel:+260-211-399303, 399300, E-mail: dgo@boz.zm. Web: http://www.boz.zm