Instruction No. 008-DOM/20 of 04 November 2020 on the Establishment of an Exceptional Refinancing Instrument Dedicated to Gold Sector Operators

BANKY FOIBEN'I MADAGASIKARA

CENTRAL BANK OF MADAGASCAR

DIRECTORATE OF MONETARY OPERATIONS

INSTRUCTION NO. 008-DOM/20 on the Establishment of an Exceptional Refinancing Instrument Dedicated to Gold Sector Operators

The Governor of the Central Bank of Madagascar,

Having regard to Law No. 95-030 of 22 February 1996 on the activity and supervision of credit institutions, as amended,

Having regard to Law No. 2016-004 of 29 July 2016, supplemented by Law No. 2016-057 of 2 February 2017 on the Statutes of the Central Bank of Madagascar,

Having regard to Decree No. 2019-2069 of 6 November 2019 repealing the provisions of Decree No. 2014-1684 of 29 October 2014 on the appointment of the Governor of the Central Bank of Madagascar and appointing the Governor of the Central Bank of Madagascar,

Having regard to Instruction No. 006-DOM/19 of 25 October 2019 on money market instruments,

HEREBY DECIDES

Article 1: OBJECT

An exceptional refinancing instrument dedicated to gold sector operators is hereby established. In this context, the market instrument provided for in Article 9 of Instruction No. 006-DOM/19 of 25 October 2019 on money market instruments shall be implemented in a specific manner in accordance with the procedures set forth in this Instruction.

With a view to promoting the formal export of the gold sector and establishing a national gold reserve within the Central Bank of Madagascar (BFM), the latter is establishing an exceptional credit line in favor of banks governed by Law No. 95-030 of 22 February 1996 on the activity and supervision of credit institutions, or the "Banking Law".

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Article 2: SCOPE OF APPLICATION

The application of the provisions of this Instruction is exclusively linked to the financing by banks of trading counters and operators of gold-bearing substances holding an Exploitation Permit (PE) or a Permit Reserved for Small Operators (PRE).

Article 3: IMPLEMENTATION PROCEDURES

This article prescribes the specific implementation procedures for the instrument provided for in Article 9 of Instruction No. 006-DOM/19 of 25 October 2019 on money market instruments.

3.1 BFM may launch fixed-rate liquidity injection operations with total or partial allocation of bids, with maturities of up to three (3) years. The awarding of offers submitted by banks remains at BFM's discretion based on the evolution of monetary aggregates and monetary stability.

3.2 These operations shall be launched no more than once per month, on the third Friday of the month.

3.3 The interest rate for these exceptional liquidity injection operations is set at 4.97%.

3.4 Banks must indicate in their bid, in accordance with the template in Annex I, the amount of their offer relative to the rate fixed by BFM.

3.5 Eligible collateral for this exceptional refinancing are Treasury Bills (BTA) and Treasury Bonds (BTF), respecting the collateral coverage principle for liquidity injection operations on the money market. Upon the launch of repurchase operations, this type of refinancing shall comply with the processing procedures for any liquidity injection operation by BFM.

Article 4: OBLIGATIONS AND SANCTIONS

Under penalty of early maturity in case of non-compliance with the obligations arising from this Instruction, banks benefiting from BFM's exceptional refinancing are required to:

• allocate in full and exclusively the funds obtained under this Instruction to support the gold sector operators indicated in Article 2 above.

• declare to BFM, with a copy to the General Secretariat of the Banking and Financial Supervision Commission, all information relating to credits granted under this Instruction in accordance with the template in Annex II. The declaration shall be made monthly and no later than one week before the next auction, even for banks that do not yet intend to submit to a new BFM announcement.

• account for refinancements received from BFM under this Instruction in a distinct dedicated sub-account within account 116 "Term Borrowings – Central Bank" on the liabilities side of their balance sheet.

Article 6: RESTRICTIONS

Banks that have already received liquidity via the instrument governed by this Instruction may not submit to other operations on the same instrument until the previously obtained funds have been fully utilized. This utilization is evidenced by the unavailability and retention by the beneficiaries of all funds lent by BFM at the time of the operation's launch.

Article 7: FINAL PROVISIONS

Without prejudice to the specific provisions stated above, the procedures applicable to exceptional refinancing operations governed by this Instruction are identical to those for fixed-rate operations with total or partial allocation of bids stipulated in Article 9 of Instruction No. 006-DOM/19 of 25 October 2019 on money market instruments.

Article 8: ANNEXES

The annexes form an integral part of this Instruction.

Article 9: ENTRY INTO FORCE

This Instruction shall enter into force as of the date of its signature.

Antananarivo, 04 NOV 2020

THE GOVERNOR HENRI EDMOND RABARIJOHN

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ANNEX I

BID FOR EXCEPTIONAL LIQUIDITY INJECTION OPERATIONS DEDICATED TO GOLD SECTOR OPERATORS

Bank Name: Rate: Launch Date: ____________________

BID
Total Amount (in Ar)
In figures

COLLATERAL:

Total collateral amount(1) (2): Ariary………………… Interest amount: Ariary …………………

| ORDER NO. | | COLLATERAL | | | | | | :--- | | :--- | | :--- | | :--- | | | | Nature | Reference | Acquisition Rate | Maturity | Number of securities | Nominal amount per security (In Ariary) | | | | | | | | In words | In figures | | TOTAL... | | | | | | | |

(1) Requested amount plus interest (2) Multiple of 100 million Ariary.

At ____________________, on ____________________ (Authorized signatures and bank stamp)

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ANNEX II

INSTITUTION NAME Date: ____________________

List of gold sector operators/operators who received credit, subject to exceptional refinancing by BFM pursuant to Instruction No. 007-DOM/20 on the establishment of an exceptional refinancing instrument dedicated to gold sector operators for the month of ………………

Rank	Beneficiary Name	Nature of Credit	Amount of Credit Disbursed	Amount of Installment	Date of Disbursement or Establishment	Date of 1st Repayment	Credit Duration	Maturity Date	Other Information
1									- Credit Rate<br>- Turnover<br>- Etc.
...
n
		TOTAL

Authorized signature and stamp