Regulatory Alerts2020-11-16
Circular No. 06/EFI/2020 of 16 November - Program for the Gradual Reduction of Subordinated Loans, Redeemable Preference Shares and Other Instruments in Own Funds
The Bank of Mozambique mandates a mandatory 20% annual gradual reduction in the qualifying amount of subordinated loans, fixed-date redeemable preference shares, and other instruments included in credit institutions' own funds during the five years preceding their maturity. Institutions seeking early repayment of these phasing-out instruments must submit a non-objection request to the central bank, which will evaluate the institution's capital structure and solvency outlook before granting or conditioning approval. The circular takes immediate effect, with the Prudential Supervision Department responsible for clarifying any interpretative or application queries.
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