Region

Jurisdiction

Regulator

2002-01-01

Application for Off-Tender Government Securities Transactions

The Bank of Zambia mandates that commercial banks and off-tender agents must eliminate artificial ceilings on government securities purchases to resolve investor complaints about uninvested funds. Financial institutions are required to allow clients to utilize their full account balances for bond or Treasury bill acquisitions, provided only minimum balance and operational requirements are satisfied. This directive applies to all off-tender transactions and explicitly permits the deduction of handling fees from the available account balance.

Zambia

Bank of Zambia

# BANK OF ZAMBIA
## OFFICE OF THE DEPUTY GOVERNOR - ADMINISTRATION

Tel. 228888/228903-20                                                                 P O Box 30080  
                                                                                          Cairo Road  
                                                                                          Lusaka 10101  

11 November 2002

CB Circular No. 18/2002

To: All Commercial Banks and Off-Tender Agents

Dear Sirs/Madams

## APPLICATIONS FOR OFF-TENDER GOVERNMENT SECURITIES TRANSACTIONS

The Bank of Zambia has received numerous complaints from clients regarding the manner commercial banks and Off-Tender Agents are handling their off-tender government securities applications. Investors have complained that some commercial banks/Off-Tender Agents do not allow their customers/clients to exhaust balances in their respective accounts when applying to purchase government securities in instances where the face value of the bonds or Treasury bills to be purchased exceeds the balance in the account. As a result, a substantial portion of investors’ funds remains uninvested.

The Bank of Zambia wishes to urge commercial banks and Off-tender Agents to facilitate investors investments by desisting from placing ceilings on the face value but to simply ensure that the balance in the customers’ account is sufficient to cover the cost of the purchase including the handling fees as long as the minimum account balance and other operational account requirements are met.

Yours faithfully

Chilufya Mbalashi (Ms)  
DEPUTY GOVERNOR - ADMINISTRATION

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Bank Square Cairo Road P.O. Box 30080, Lusaka, Zambia Tel: +260-1-229930 Fax: +260-1-222808 Email: cmbalashi@boz.zm web http://www.boz.zm