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2020-03-30

Instruction No. 04/2020 of March 30 – Financial System: Flexibility in Deadlines for Credit Obligations

The Central Bank of Angola issued Instruction No. 04/2020 mandating financial institutions to grant clients a 60-day moratorium on principal and interest repayments, temporarily suspending related demands and default notices due to the Covid-19 pandemic. The directive applies to regular credit operations, preserves current installment values, and ensures compliance with prudential standards and IFRS 9 without triggering automatic default classification. Financial institutions must report these exposures to the Credit Risk Information Center, implement the measures within two months of publication, and waive associated fees.

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INSTRUCTION NO. 04/2020 OF MARCH 30 SUBJECT: FINANCIAL SYSTEM

  • Flexibility in Deadlines for Fulfilling Credit Obligations

Within the scope of Presidential Decree No. 82/20, dated March 26, which defined, among other measures, the suspension of demands, formal notices of default, and executions arising from delays in obligations that cannot be fulfilled due to the State of Emergency, motivated by the significant impact of the pandemic caused by the Covid-19 outbreak; In these terms, under the combined provisions of item f) of paragraph 1 of Article 21 and item d) of paragraph 1 of Article 51 of Law No. 16/10, dated July 15 – Central Bank of Angola Law, as well as the provision in item l) of Article 90 of Law No. 12/15, dated June 17 – Framework Law on Financial Institutions.

I DETERMINE:

  1. Object This Instruction establishes rules regarding the temporary facilities that Financial Institutions must grant to their clients, individuals and companies, in the context of fulfilling credit obligations contracted with said Financial Institutions.

  2. Scope This Instruction applies to all Financial Institutions that conduct credit operations subject to the supervision of the Central Bank of Angola.

CONTINUATION OF INSTRUCTION NO. 04/2020 Page 2 of 4 3. Procedures for Granting Moratoria 3.1. Financial Institutions conducting credit operations must grant their clients a moratorium of 60 (sixty) days regarding the amortization of principal and interest related to credit obligations, ensuring that this does not alter the value of current installments, as well as temporarily suspending all demands, formal notices of default, and executions arising from delays in fulfilling said obligations that cannot be carried out due to the significant impact of the Covid-19 pandemic. 3.2. The moratorium provided for in the previous subpoint must be available subject to compliance with the following situations: a) Express request from the client, in physical or digital format; and b) Credit operations in regular status that are in a repayment period, or have commenced this period in March 2020. 3.3. The facilities provided for in subpoint 3.1 of this Instruction do not lead to an automatic classification of default, restructuring, or reduced probability of fulfilling credit obligations. 3.4. Financial Institutions must take the necessary measures to subsequently regularize addenda to contracts subject to changes.

  1. Information Duties Financial Institutions must provide the public with information regarding the conditions for the temporary suspension of demands, formal notices of default, and executions arising from delays in credit obligations, in a visible, complete, true, current, and unambiguous manner, expressed in clear and objective language, as stipulated in Notice No. 14/2016.

  2. Prudential and Accounting Rules

CONTINUATION OF INSTRUCTION NO. 04/2020 Page 3 of 4 5.1. In implementing the facilities provided for in this Instruction, Financial Institutions must observe prudential and accounting rules regarding credit exposures, as well as continue to monitor, evaluate, and classify said exposures, so that they adequately reflect any deterioration in credit risk. 5.2. Within the application of International Financial Reporting Standard 9 (IFRS 9), Financial Institutions must ensure that they conduct an adequate assessment and distinction between borrowers whose credit risk is not significantly affected by the current situation in the long term, and those in whom said impact occurs.

  1. Information Reporting to CIRC Financial Institutions must provide reporting of credit exposures covered under this Instruction to the Credit Risk Information Center (CIRC).

  2. Exemption from Fees The facilities provided for in paragraph 1 of this Instruction are exempt from expenses or fees.

  3. Transitional Provision Financial Institutions conducting credit operations must comply with the conditions of this Instruction within a maximum period of 2 (two) months, counted from the date of publication.

  4. Sanctions Non-compliance with the mandatory rules established in this Instruction constitutes an offense punishable under the Framework Law on Financial Institutions.

  5. Doubts and Omissions

CONTINUATION OF INSTRUCTION NO. 04/2020 Page 4 of 4 Doubts and omissions resulting from the interpretation and application of this Instruction are resolved by the Central Bank of Angola.

  1. Entry into Force This Instruction enters into force on the date of its publication.

PUBLISHED. Luanda, March 30, 2020.

THE GOVERNOR JOSÉ DE LIMA MASSANO

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