Regulatory Alerts1973-03-13
Ordinance No 73-008 of March 13, 1973 on the Global Mobilization of Bank Credits
The Malagasy Issuing Institute, through Ordinance No. 73-008 of March 13, 1973, authorizes banks and financial institutions to mobilize primary commercial instruments or global mobilization instruments through discount or repurchase agreements. Credit institutions must obtain individual authorization, explicitly reference the Ordinance in relevant contracts and instruments, submit original contract copies for approval, and maintain separate accounting records. Upon mobilization, all associated rights, claims, interest, fees, and specific guarantees automatically transfer to the Issuing Institute, while the originating institutions waive further mobilization of the substituted primary instruments and restrict their circulation to collection purposes.
ORDINANCE NO. 73-008 OF MARCH 13, 1973 ON THE GLOBAL MOBILIZATION OF BANK CREDITS (J.O. NO. 900 OF MARCH 24, 1973, P. 677)
Article 1 - The Malagasy Issuing Institute may mobilize, through discount or repurchase agreements, for the benefit of banks or financial institutions: · Either so-called "primary" commercial instruments, subscribed, accepted, or endorsed to their order by the credit beneficiaries, at agreed maturities; · Or "global" mobilization instruments subscribed or endorsed to its order by credit institutions, representing all or part of the credits of the same nature that these institutions hold in their portfolios and which are accompanied by an individual authorization for mobilization or rediscount. The categories of credits eligible for global mobilization are established by order of the Minister of Economy and Finance upon proposal of the Malagasy Issuing Institute.
Article 2 - The issuance or endorsement, by a credit institution, of a global mobilization instrument to the order of the Malagasy Issuing Institute automatically transfers to the latter all rights and actions enjoyed by the institution with respect to the primary instruments to which the global instrument substitutes, or those resulting from credit contracts concluded between the institution and beneficiaries in the corresponding category. These rights and actions cover all claims arising in favor of the institution from the relevant credits, on due interest and ancillary fees, as well as all specific guarantees accompanying the credits, even when they result from instruments distinct from the "primary" instruments or credit contracts.
Article 3 - Credit institutions that subscribe or endorse global mobilization instruments must waive any further mobilization of the primary instruments to which the global instruments substitute, and limit the eventual circulation of these primary instruments for collection purposes. They must explicitly reference this Ordinance in all their credit contracts eligible for global mobilization and on all primary or global instruments issued as representation or mobilization of these credits. An original copy of each credit contract eligible for global mobilization must be submitted to the Malagasy Issuing Institute in support of the request for approval of mobilization or rediscount. Furthermore, globally mobilizable credit operations are subject to separate records in the accounting of credit institutions, in the forms prescribed by the Malagasy Issuing Institute.