Instruction No. 001-DSP/2016 of April 28, 2016 on the Closure of Manual Clearing Rooms Outside Antananarivo and Establishing the Operating Procedures for the Manual Clearing Room in Antananarivo

INSTRUCTION NO. 001/DSP/16 OF APRIL 28, 2016 On the Closure of Manual Clearing Rooms Outside Antananarivo and Establishing the Operating Procedures for the Manual Clearing Room in Antananarivo

The Governor of the Central Bank of Madagascar, Having regard to the amended Law No. 94-004 of June 10, 1994 on the statutes of the Central Bank of Madagascar; Having regard to Decree No. 2014-1684 of October 29, 2014 on the appointment of the Governor of the Central Bank of Madagascar; DECIDES

Article 1 – OBJECT All manual clearing rooms listed in Annex 1 are permanently closed. Only the one established in ANTANANARIVO remains, with its operating procedures set forth herein.

Article 2 – MEMBERS All primary banks or financial institutions that maintain account relationships with the Central Bank may be admitted as participating members of the manual clearing room by letter addressed to the Governor of the Central Bank. The application must contain an undertaking to comply with the rules and procedures established by this Instruction. Each member may freely terminate its membership, provided that it notifies the Central Bank in advance by official correspondence with acknowledgment of receipt at least one month prior.

Article 3 – REPRESENTATIVES OF MEMBERS Each member must notify the Chairman of the clearing room of the names of one principal representative and at least one alternate for the clearing sessions. The representatives of members are required to: • respect the provisions of this Instruction; • comply with directives issued by the Chairman of the clearing room; • inform the Chairman of any facts brought to their attention that could disrupt the smooth conduct of a clearing session.

Article 4 – CHAIRMANSHIP OF THE CLEARING ROOM The clearing room operates under the direction of a Chairman appointed by the Governor of the Central Bank. The Chairman of the clearing room: • supervises and ensures the proper functioning of clearing sessions; • ensures compliance with the provisions of this Instruction during the clearing session; • monitors operations conducted by members; • is authorized to issue a reprimand, impose a warning, order temporary suspension, or require the replacement of a member representative; • takes all necessary conservatory measures in case of anomalies and draws up an official report accordingly. If for any reason a session is interrupted or fails to take place, the Chairman, after consulting with other representatives, decides on the measures to be taken, which will be recorded in an official report prepared for that purpose.

Article 5 – CLEARING SESSIONS 5.1. Location – Hours – Frequency Clearing sessions are held at the headquarters of the Central Bank located in Antaninarenina on all working days at 10:00 a.m. A attendance sheet is countersigned by the representatives of members. An official report indicating the number, movements, and balance of operations processed for each member is also prepared and signed by their representatives and the Chairman.

5.2. Operations Conducted Each clearing session involves: • the presentation and settlement of negotiable instruments; • the presentation and settlement of checks; • the return and reimbursement of unpaid instruments and checks.

5.3. Procedures for Presentation and Settlement A member’s representative holds all negotiable instruments drawn on the accounts of other members or domiciled at their counters, previously endorsed on the reverse with the stamp "cleared on..". The date of the stamp corresponds to the settlement date of the instrument. These instruments are grouped by distinct presentation slips categorized by recipient and according to categories of check or instrument presentation. The amounts of all slips to be settled on the day of the session by a single institution are transferred to a summary slip so that ultimately only one total needs to be processed by the paying institution. The overall total of each summary slip is then transferred to an "individual statement" in the column titled "various instruments presented and rejected" opposite the name of the concerned institution. The representative of each member verifies the summary slips submitted for settlement, records the total amount of each on their "individual statement" in the column titled "various instruments received and processed", prepares a balance of this statement, and communicates it to the representative of the Central Bank for overall approval. Erasures and interlineations, even if approved, are not permitted on any statements, tables, or documents related to the clearing room. Rejected instruments are returned to the presenters accompanied by a slip and a form indicating precisely the actual reason for rejection. The "cleared" stamp on the reverse of these instruments is overprinted with a cancellation stamp.

5.4. Effects of Instrument Presentation The presentation of instruments does not constitute payment and does not result in novation. The sums representing the value of the instruments become the property of the beneficiaries only after entries are posted at the Central Bank and subject to reimbursement in case of rejection.

Article 6 – INSTRUMENTS ADMITTED TO THE MANUAL CLEARING ROOM The following are provisionally admitted to the manual clearing room until its closure by the Central Bank of Madagascar: • checks meeting the conditions of Instruction No. 00001-DSP/2008 of October 3, 2008 regarding the technical specifications for checks issued in Madagascar, but which for one reason or another cannot be scanned; • negotiable instruments that cannot be scanned because they do not conform to the standards recommended by the Central Bank of Madagascar. The Chairman of the clearing room verifies and certifies in advance that a given instrument cannot be scanned and must, consequently, be processed through the manual clearing room. No instrument lacking the aforementioned certification may be presented to the manual clearing room.

Article 7 – REJECTION PERIOD The rejection period for checks and instruments admitted to manual clearing is two (02) working days from the date of clearing.

Article 8 – ENTRY INTO FORCE This Instruction enters into force as of July 1, 2016. It repeals and replaces all prior contrary provisions, notably those of Instruction No. 044/06-GV/OF of December 13, 2006.

Alain H. RASOLOFONDRAIBE, Governor.

ANNEX 1: LIST OF MANUAL CLEARING ROOMS CLOSED BY THIS INSTRUCTION • Manual Clearing Room Antsiranana • Manual Clearing Room Nosy Be • Manual Clearing Room Sambava • Manual Clearing Room Antalaha • Manual Clearing Room Fianarantsoa • Manual Clearing Room Manakara • Manual Clearing Room Mahajanga • Manual Clearing Room Toamasina • Manual Clearing Room Ambatondrazaka • Manual Clearing Room Toliara • Manual Clearing Room Tolagnaro • Manual Clearing Room Morondava