Regulatory Alerts1996-07-11
Instruction No. 06/1996, dated July 12
The National Bank of Angola mandates all banking institutions to establish a 10% provision against general banking risks based on their United States dollar cash holdings, effective immediately. All institutions must rigorously verify the authenticity of 1990 and 1993 USD 100 notes held in their treasuries, offsetting identified counterfeit values against the established provision and treating any excess as a fiscal year loss. If loss amounts remain undetermined by December 31, 1996, institutions must create an additional provision equivalent to up to 30% of their June 30, 1996 US dollar holdings.
INSTRUCTION NO. 06/96 SUBJECT: ESTABLISHMENT OF PROVISIONS Considering the existence, in circulation, of counterfeit United States Dollar notes that are difficult to detect; Considering the fact that Commercial Banks hold a large volume of such notes in their treasuries; Considering the need to maintain stability in the national Banking system; In exercise of the authority established in Article 42 of the Organic Law of the National Bank of Angola: I HEREBY DETERMINE: Article 1. All Banking Institutions must establish, in the July trial balance, a provision for General Banking Risks, corresponding to 10% of their available United States Dollar cash holdings. Article 2. 1- All Banking Institutions shall ensure the rigorous verification of the authenticity of USD 100.00 notes, issued in 1990 and 1993, held in their treasuries. 2- The identified counterfeit notes shall be offset against the established provision, and any excess shall be treated as a loss for the fiscal year. 3- If, by the December 31, 1996 balance sheet, an institution has not determined the value of its losses, it shall establish an additional provision up to 30% of the value of its United States Dollar holdings as of June 30, 1996. 4- This Instruction takes effect immediately. Luanda, July 12, 1996 THE GOVERNOR SEBASTIÃO BASTOS LAVRADOR