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2016-11-08

Notice No. 02/GBM/2016, of November 2 - Amendment to the Regulation on the Calculation and Establishment of Mandatory Reserves (Revokes Notice No. 1/GBM/2016)

The Bank of Mozambique issued Notice No. 2/GBM/2016 to approve the Regulation on the Calculation and Establishment of Mandatory Reserves, which establishes levy bases, minimum daily rates (13% for national currency and 15% for foreign currency), calculation methodologies, and penalty frameworks for credit institutions. The regulation mandates daily balance monitoring, specifies cash and transfer methods for reserve fulfillment, and introduces a penalty escalation mechanism for persistent deficits or excesses. It takes effect from the mandatory reserves period beginning August 22, 2016, and formally revokes Notice No. 1/GBM/2016.

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Wednesday, November 2, 2016 | SERIES I — Number 131

REPUBLIC GAZETTE

OFFICIAL PUBLICATION OF THE REPUBLIC OF MOZAMBIQUE

NATIONAL PRESS OF MOZAMBIQUE, E.P.

NOTICE

The matter to be published in the "Republika Gazette" must be submitted as a duly authenticated copy, one for each subject, containing the following endorsement, signed and authenticated: For publication in the "Republika Gazette".

TABLE OF CONTENTS

Ministry of State Administration and Public Service: Ministerial Decree No. 73/2016: Approves the Standard Staffing Table for the Provincial Delegations of the Study Grants Institute.

Ministry of Labour, Employment and Social Security: Ministerial Decree No. 76/2016: Approves the Code of Conduct for Labour Inspectors.

Bank of Mozambique: Notice No. 2/GBM/2016: Approves the Regulation on the Calculation and Establishment of Mandatory Reserves and revokes Notice No. 1/GBM/2016, of June 1.

MINISTRY OF STATE ADMINISTRATION AND PUBLIC SERVICE

Ministerial Decree No. 73/2016 of November 2

Given the need to equip the Standard Staffing Table of the Provincial Delegations of the Study Grants Institute, created by Ministerial Decree No. 51/2014 of April 9, under the provisions of sub-alinea iv) of alinea a) of article 3 of Presidential Decree No. 7/2015 of March 2, the Minister of State Administration and Public Service determines:

Article 1. The Standard Staffing Table of the Provincial Delegations of the Study Grants Institute, contained in the attached table, which forms an integral part of this Ministerial Decree, is approved.

Article 2. This Ministerial Decree enters into force on the date of its publication.

Ministry of State Administration and Public Service, on July 11, 2016. – The Minister, Carmelita Rita Namashulua.

1146 | SERIES I — NUMBER 131

NOTICE No. 2/GBM/2016 of November 2

Given the need to strengthen the countercyclical stance of monetary policy in light of atypical behaviour among the country's main macroeconomic indicators, particularly inflation and the exchange rate, and in view of necessary corrections to its trajectory, the Bank of Mozambique, under the provisions of article 27 of Law No. 1/92 of January 3, the Organic Law of the Bank, determines:

  1. The Regulation on the Calculation and Establishment of Mandatory Reserves, attached hereto, which forms an integral part of this Notice, is approved.
  2. This Notice takes effect from the mandatory reserves establishment period, which begins on August 22, 2016.
  3. Notice No. 01/GBM/2016 of June 1 is revoked.

Any doubts arising from the interpretation and application of this Notice shall be submitted to the Markets and Reserve Management Department of the Bank of Mozambique.

Maputo, August 19, 2016. — The Governor of the Bank of Mozambique. — Ernesto Gouveia Gove.

Regulation on the Calculation and Establishment of Mandatory Reserves

CHAPTER I Subject Matter and Scope

ARTICLE 1 Subject Matter

This Regulation establishes the rules for calculating and establishing mandatory reserves.

ARTICLE 2 Scope of Application

  1. This Regulation applies to all credit institutions provided for in Law No. 15/99 of November 1, with amendments introduced by Law No. 9/2004 of July 21 (Law on Credit Institutions and Financial Companies), holding liabilities referred to in article 4 of this Regulation and monetary assets with the Bank of Mozambique.
  2. The provisions of the preceding paragraph do not apply to credit institutions not authorized to receive public deposits.

CHAPTER II Calculation and Establishment

ARTICLE 3 Currencies of Establishment

Mandatory reserves are established: a) In meticais, for deposits denominated in national currency; and b) In US dollars, for deposits denominated in foreign currency.

ARTICLE 4 Liabilities Subject to Levy

  1. The following liabilities constitute the levy base, as detailed in the Mandatory Reserves Calculation Tables attached to this Regulation: a) Deposits of Residents; b) Deposits of Non-Residents; and c) State Deposits.
  2. The liabilities referred to in the preceding paragraph must be segregated into national and foreign currencies.

ARTICLE 5 Calculation of the Levy Base

  1. The levy base for mandatory reserves is calculated from the simple arithmetic mean of the balances of the liabilities referred to in the preceding article, verified over the calculation period.
  2. The calculation periods for the levy base are, each month: a) 1st Period - from the 1st to the 15th; and b) 2nd Period - from the 16th to the last day of each month.
  3. For the purpose of calculating the levy base, deposits denominated in other foreign currencies are converted daily into their US dollar equivalent, using the prevailing valuation exchange rate.
  4. The US dollar value of the deposits referred to in the preceding paragraph is calculated by applying the following conversion factor: $$F_{USD} = \frac{Taxa_{ME}}{Taxa_{USD}}$$
  5. In the formula provided in the preceding paragraph: a) F_USD is the conversion factor to the US dollar; b) Taxa_ME is the daily valuation exchange rate of the foreign currency to be converted; and c) Taxa_USD is the daily valuation exchange rate of the US dollar.

ARTICLE 6 Levy Rate

The levy base referred to in the preceding article is subject to the following daily minimum rates: a) 13.00%, for the levy base in national currency; b) 15.00%, for the levy base in foreign currency.

ARTICLE 7 Establishment Period

  1. The mandatory reserves establishment periods are as follows: a) 1st Period - from the 7th to the 21st; and b) 2nd Period - from the 22nd to the 6th of the following month.
  2. The mandatory reserves of the 1st establishment period correspond to the 2nd calculation period and vice-versa.

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ARTICLE 8 Method of Establishment

  1. Mandatory reserves in national currency may be established in at least one of the following forms: a) Cash; b) Cheques drawn by the institution itself on other national credit institutions; c) Account-to-account transfer; d) Other financial assets eligible to be included in the clearing system, excluding foreign currency current deposits of credit institutions with the Bank of Mozambique; and e) Cash held by the institution in its rural zone branches, as defined by the Bank of Mozambique.
  2. Mandatory reserves in foreign currency may be established in at least one of the following forms: a) Funding of the US dollar current deposit account with the Bank of Mozambique, via account-to-account transfer from banks within the country; and b) Funding of the US dollar current deposit account, via transfer from the institution's nostro account to the Bank of Mozambique's nostro account.

ARTICLE 9 Establishment Methodology

  1. The daily balances of current deposits, in national currency and US dollars, of credit institutions with the Bank of Mozambique must not be lower each day than the mandatory reserves amounts resulting from multiplying the levy base by the rates fixed in article 6 of this Regulation.
  2. Daily excesses of free reserves exceeding 1% of mandatory foreign currency reserves are not permitted.
  3. The provisions of the preceding paragraph do not apply whenever the mandatory reserves establishment period begins on a non-business day, in which cases institutions are: a) Authorized to maintain free reserve excesses on the business day and subsequent non-business days immediately preceding the start of their respective establishment period, in case of an increase in the levy base; or b) Authorized to maintain free reserve excesses from the start of the establishment period itself until the non-business day immediately preceding the first business day, in case of a decrease in the levy base.
  4. A free reserve excess is considered the portion of each bank's daily US dollar account balance that exceeds 1% of the mandatory reserves calculated for the establishment period to which they relate.

CHAPTER III Penalties

ARTICLE 10 Penalization of Irregularities

  1. Without prejudice to applicable legislation, the following irregularities are subject to monetary penalties: a) Deficit of mandatory reserves; b) Excess of free reserves in foreign currency; and c) Delay in sending information to the Bank of Mozambique regarding the levy base.
  2. The penalty for the deficit of mandatory reserves calculated at the end of each day is determined based on the following formulas: a) Penalty = 10,000.00 MT + [(SD+CX - (r x BI)) x TJ/365 days, for the deficit of mandatory reserves in national currency; and b) Penalty = 10,000.00 MT + [(SD - (r x BI)) x TJ]/365 days, for the deficit of mandatory reserves in foreign currency.
  3. In the formulas provided in the preceding paragraph: a) SD is the daily accounting balance of current deposits in national currency or US dollars of credit institutions with the Bank of Mozambique, obtained from statements issued by the Maputo Branch of the Bank of Mozambique; b) CX is the value of cash, in national currency, held daily in vault by credit institutions, as provided for in alinea e) of article 8 of this Regulation, obtained from information submitted by institutions to the Markets and Reserve Management Department of the Bank of Mozambique; c) r is the daily minimum levy rate of mandatory reserves, as per article 6 of this Regulation; d) BI is the levy base for mandatory reserves, as per article 5 of this Regulation; e) TJ is the penalty rate for the deficit of mandatory reserves.
  4. The penalty rate for the deficit of mandatory reserves referred to in the preceding paragraph corresponds to: a) The highest and most recent interest rate for active operations, in national currency, charged by the defaulting credit institution, plus one percentage point, when relating to liabilities in national currency. b) The highest and most recent interest rate for active operations, in US dollars, charged by the defaulting credit institution, plus one percentage point, when relating to liabilities in foreign currency.
  5. The penalty for daily excesses of free reserves in foreign currency calculated at the end of each day is determined based on the following formula: Penalty = 10,000.00 MT + (ER x t/365 days)
  6. In the formula referred to in the preceding paragraph: a) ER is the daily excess of free reserves, exceeding 1% of mandatory foreign currency reserves; and b) t is the highest and most recent interest rate for passive operations, in US dollars, charged by the defaulting credit institution, plus one percentage point.
  7. In cases of unavailability of information on interest rates for active or passive operations charged by the defaulting institution, the highest and most recent average interest rate for active or passive operations charged by the Banking System, plus one percentage point, shall apply for the purpose of the penalty referred to in this article.
  8. The penalty values due for the deficit of Mandatory Reserves and excesses of free reserves in foreign currency shall be converted into meticais using the prevailing valuation exchange rate on the date of the infringement.

1148 | SERIES I — NUMBER 131

  1. The penalty for the delay in sending information referred to in article 14 of this Regulation is 10,000.00 MT (ten thousand meticais) for each business day of delay.

ARTICLE 11 Payment of Penalty

The Bank of Mozambique debits the current deposit account, in national currency, of the defaulting credit institution for the penalty values calculated according to the preceding article of this Regulation.

ARTICLE 12 Escalation of Penalty

The penalty rates provided for in paragraph 4 of article 10 of this Regulation are subject to an escalation of ten percentage points, whenever, during a given establishment period, an institution incurs deficits or excesses of free reserves for two or more days, consecutive or not.

ARTICLE 13 Account Blocking

  1. If over four consecutive mandatory reserves establishment periods an institution incurs a deficit in two of those periods, consecutive or not, for three or more days, the Bank of Mozambique blocks the balance of the free movement account.
  2. Only credit movements are permitted in the blocked account, without prejudice to any additional measures provided for in the Interbank Clearing and Settlement Regulations.
  3. The institution is notified of the account blocking, with a minimum advance notice of four days from the date of its effective implementation.
  4. The institution whose account is blocked must, upon receipt of the notification: a) Immediately instruct the opening of a new account for clearing and other types of operations, with the Maputo Branch of the Bank of Mozambique; b) Fund the blocked account for the purpose of fulfilling mandatory reserves.
  5. The Bank of Mozambique reserves the right to transfer from the new account to the blocked account the balances necessary for the institution to fulfill its Mandatory Reserves.
  6. While deficits persist in the blocked account, a penalty is applied to daily deficits based on the rate provided for in article 10 of this Regulation.
  7. Within a period of no less than four mandatory reserves establishment periods, the Bank of Mozambique may instruct the lifting of the account blocking.

CHAPTER IV Final Provisions

ARTICLE 14 Submission of Information

  1. Credit institutions covered by this Regulation must submit to the Bank of Mozambique, referencing the calculation period indicated in paragraph 2 of article 5, the information contained in the Mandatory Reserves Calculation Tables attached hereto, which form an integral part of this Notice.
  2. The Mandatory Reserves Calculation Tables referred to in the preceding paragraph must be received by the Bank of Mozambique by the third business day following the end of the calculation period to which they refer, and may be corrected until the last business day preceding the start of their respective establishment period.
  3. Late submission of tables is an indispensable condition for the acceptance of tables relating to subsequent periods.
  4. Any correction of the levy base occurring during the establishment period to which it refers, and which implies an increase or decrease in the same, will not be considered for the purpose of reducing penalties already calculated, and shall only be assumed to increase the value of said penalties.
  5. Credit institutions are obliged to retain, for a period of five years, all documents enabling them to prove the information contained in the Tables referred to in paragraph 1 of this Article.

ARTICLE 15 Exemption Period

  1. All credit institutions enjoy an exemption in establishing mandatory reserves, for a maximum period of three months, counted from the date of commencement of their activity.
  2. If the institution wishes to join the Interbank Markets before the end of the period referred to in the preceding paragraph, it must waive the enjoyment of the remaining exemption period, so as to comply with alinea a) of article 3 of Notice No. 05/GBM/2013, of September 18, Regulation on the Market Operations System.
  3. The exemption referred to in paragraph 1 of this article is automatic, and its terms are formally communicated by the Regulation and Licensing Department of the Bank of Mozambique.

1149

ANNEX 1: MANDATORY RESERVES CALCULATION TABLE FOR DEPOSITS IN METICAIS MANDATORY RESERVES CALCULATION TABLE FOR NATIONAL CURRENCY DEPOSITS

Institution Name: Calculation Period: Establishment Period: Values in Currency Units

DESIGNATIONDAILY BALANCES
tDay t+1Day t+2Day t+...
A. DEPOSITS OF RESIDENTS
From financial societiesFrom public companiesFrom private companiesIndividualsCollective organizations other than companiesFrom emigrants
Current Deposits400001040000204000030400004040000504000060
Notice Deposits400001140000214000031400004140000514000061
Time Deposits400001240000224000032400004240000524000062
Other Deposits400001840000284000038400004840000584000068
Mandatory Deposits4000007
B. DEPOSITS OF NON-RESIDENTS
From resident companies
Current Deposits4000101040001021
Notice Deposits4000101140001022
Time Deposits4000101240001023
Other Deposits4000101340001024
Mandatory Deposits4000103
C. STATE DEPOSITS
From Administrative Public SectorCentral AdministrationLocal AdministrationSocial Security
Current Deposits400000014000001140000020
Notice Deposits400000014000001140000021
Time Deposits400000014000001140000022
Other Deposits400000014000001140000028
TOTAL

1150 | SERIES I — NUMBER 131

ANNEX 2: MANDATORY RESERVES CALCULATION TABLE FOR FOREIGN CURRENCY DEPOSITS MANDATORY RESERVES CALCULATION TABLE FOR FOREIGN CURRENCY DEPOSITS

Institution Name: Calculation Period: Establishment Period: Values in Currency Units

DESIGNATIONDAILY BALANCES
DatestDay t+1Day t+2
Valuation Exchange RateUSD
ZAR
EUR
GBP
A. DEPOSITS OF RESIDENTS
From financial societiesFrom public companies*From private companiesIndividualsCollective organizations other than companiesFrom emigrants
Current DepositsUSD400011040001204000130400014040001504000160
ZAR
EUR
GBP
Total USD + Equivalent in USD of Other Currencies
From financial societiesFrom public companiesFrom private companiesIndividualsCollective organizations other than companiesFrom emigrants
Notice DepositsUSD400011140001214000131400014140001514000161
ZAR
EUR
GBP
Total USD + Equivalent in USD of Other Currencies
From financial societiesFrom public companiesFrom private companiesIndividualsCollective organizations other than companiesFrom emigrants
Time DepositsUSD400011240001224000132400014240001524000162
ZAR
EUR
GBP
Total USD + Equivalent in USD of Other Currencies

1151

ANNEX 2 (continued): MANDATORY RESERVES CALCULATION TABLE FOR FOREIGN CURRENCY DEPOSITS MANDATORY RESERVES CALCULATION TABLE FOR FOREIGN CURRENCY DEPOSITS

Institution Name: Calculation Period: Establishment Period: Values in Currency Units

From financial societiesFrom public companiesFrom private companiesIndividualsCollective organizations other than companiesFrom emigrants
Other DepositsUSD40001184000128400013840001484000158
ZAR
EUR
GBP
Total USD + Equivalent in USD of Other Currencies
Mandatory Deposits4000017
Total USD + Equivalent in USD of Other Currencies
B. DEPOSITS OF NON-RESIDENTS
From resident companiesFrom other non-residents
Current DepositsUSD40011104001120
ZAR
EUR
GBP
Total USD + Equivalent in USD of Other Currencies
From resident companiesFrom other non-residents
Notice DepositsUSD40011114001121
ZAR
EUR
GBP
Total USD + Equivalent in USD of Other Currencies
From resident companiesFrom other non-residents
Time DepositsUSD40011124001122
ZAR
EUR
GBP
Total USD + Equivalent in USD of Other Currencies
Other DepositsUSD40011134001123
ZAR
EUR
GBP
Total USD + Equivalent in USD of Other Currencies
Mandatory Deposits400113
Total USD + Equivalent in USD of Other Currencies

1152 | SERIES I — NUMBER 131

ANNEX 2 (continued): MANDATORY RESERVES CALCULATION TABLE FOR FOREIGN CURRENCY DEPOSITS MANDATORY RESERVES CALCULATION TABLE FOR FOREIGN CURRENCY DEPOSITS

Institution Name: Calculation Period: Establishment Period: Values in Currency Units

C. STATE DEPOSITSCentral AdministrationLocal AdministrationSocial Security
Current DepositsUSD4000100040001010
ZAR
EUR
GBP
Total USD + Equivalent in USD of Other Currencies
Notice DepositsUSD400010014000101140001021
ZAR
EUR
GBP
Total USD + Equivalent in USD of Other Currencies
Time DepositsUSD400010024000101240001022
ZAR
EUR
GBP
Total USD + Equivalent in USD of Other Currencies
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