Notice No. 25/2012 of 14 August on Banking Correspondents

BANK OF ANGOLA GOVERNOR'S OFFICE

NOTICE NO. 25/2012 of 14 August

SUBJECT: BANKING CORRESPONDENTS

Considering the need to establish rules regarding the extension of banking services nationwide through banking correspondents accredited by banking financial institutions under the supervision of the Bank of Angola, with the objective of promoting the coverage of banking services for the population, especially in rural areas, ensuring the transparency of operations, and protecting consumers of banking services;

Under the combined provisions of paragraph f) of number 1 of Article 21 and paragraph d) of number 1 of Article 51, both of Law No. 16/10 of 15 July - Law of the Bank of Angola, combined with the provisions of Article 55 of Law No. 13/05 of 30 September – Law of Financial Institutions.

I DETERMINE:

CHAPTER I GENERAL PROVISIONS

Article 1. (Object)

This Notice establishes the specific rules applicable to banking financial institutions that intend to extend their activities through the hiring of banking correspondents.

Article 2. (Scope)

This regulation applies to all banking financial institutions under the supervision of the Bank of Angola.

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BANK OF ANGOLA GOVERNOR'S OFFICE

Article 3. (Definitions)

For the purposes of this regulation, the following are understood as:

1. Branch: An establishment in the country of a banking financial institution or non-banking financial institution with headquarters in Angola, which lacks legal personality and directly carries out, in whole or in part, operations inherent to the company's activity or the supplementary establishment of the branch in the country, of a banking financial institution or, non-banking financial institution with headquarters abroad;
2. Beneficiary: Natural or legal person designated in a payment order as the recipient of a fund transfer;
3. Client: Natural or legal person who uses the products and services of a financial institution, whether or not contractually bound to it;
4. Commissions: Monetary payments due to clients by financial institutions as remuneration for services provided by them, within the scope of their activity;
5. Credit: Act by which a banking or non-banking financial institution, acting for consideration, places or promises to place funds at the disposal of a natural or legal person against the promise of the latter to repay them on the due date, or against, in the interest of the same, an obligation by signature, such as a guarantee;
6. Banking Correspondent: A legal entity that represents and provides services inherent to the activity of the banking financial institution in facilities not belonging to it, under terms previously agreed upon by the parties;
7. Expenses: Charges borne by banking financial institutions, which are due to them by third parties;
8. Business Days: Days of the week, excluding Saturdays, Sundays, and holidays, on which banking financial institutions are open to the public for all functions;
9. Deposit: Contract by which an entity (depositor) entrusts money to a banking financial institution (depositary), which keeps the right to dispose of it for its business and assumes the responsibility to return an equivalent amount, with or without interest, within the agreed period;

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10. Firm Name: Name adopted by a banking financial institution, which suggests the exercise of the activity that constitutes its corporate object;
11. Banking Financial Institution: Also known as a bank, a company whose main activity consists of receiving deposits or other repayable funds from the public, in order to apply them on its own account, by granting credit, in accordance with Article 4, Chapter I of Law No. 13/05 of 30 September - Law of Financial Institutions;
12. Brand: Sign or set of nominative, figurative, or emblematic signs that allow distinguishing the products or services of a company from others identical or similar;
13. Banking financial operations carried out by the banking correspondent: Services provided to the public by the banking correspondent outside the headquarters and branches of banking financial institutions, supervised by the Bank of Angola;

Transparency: Standard of behavior that must be observed by the banking financial institution in providing information and disclosure to the public of financial products and services.

Article 4. (General Requirements)

The banking correspondent must satisfy the following requirements:

1. Exercise activities in accordance with the unilateral guidelines of the contracting banking financial institution, which assumes full responsibility for the services provided to clients;
2. Exercise activities in compliance with the provisions of current legislation;
3. Subscribe, on the date of hiring, a declaration stating that it has taken knowledge of the legislation concerning the activity, committing to comply with it;
4. Disclose to the public its status as a service provider of the contracting institution, identifying it by the corporate name by which it is known in the market, describing the products and services offered, as well as the contact means of the contracting institution's customer service.

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Article 5. (Criteria for Hiring the Banking Correspondent)

1. Banking financial institutions may enter into a contract for the exercise of the activity of banking correspondent with any resident legal entity.

2. For the purposes of the preceding paragraph, the banking correspondent must be a legal entity held and controlled by national citizens;

3. For the exercise of the activity of banking correspondent, banking financial institutions cannot hire:

   a) legal entities that have already entered into a banking correspondent contract with another institution; b) legal entities that include members of the administration who have been convicted of theft, robbery, abuse of confidence, usury, fraudulent bankruptcy or insolvency, simulation, or forgery of deeds; c) legal entities that include members of the administration who exercise a professional activity related to games of fortune and chance companies; d) entities whose exclusive or main purpose is the provision of correspondent services or whose corporate control is exercised by the contracting institution or by a common controller; e) entities whose corporate control, directly or indirectly, is exercised by an administrator of any companies that is in a group relationship with the contracting institution.

Article 6. (Remuneration of the Banking Correspondent)

The banking financial institution must adopt a remuneration policy for banking correspondents, compatible with the risk management policy, so as not to incentivize behaviors that raise exposure to risk above levels considered prudent, in the short, medium, and long-term strategies adopted by the institution.

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Article 7. (Supervision)

The banking financial institution must create technical and operational conditions so that the supervisory body of the Bank of Angola has timely access to information related to the operations carried out and all supporting elements of the banking correspondent activity.

Article 8. (Duty to Inform)

The banking financial institution must, within a maximum period of 5 days from the date of hiring the banking correspondent, submit the following elements through the Financial Institutions Supervision System (SSIF):

f) name or designation of the banking correspondent; g) Tax Identification Number; h) address of the establishment where the activity will be carried out; i) personal identification of the management members; j) branch of activity to which it is dedicated; k) indication of the maximum and minimum amount that the banking correspondent of the institution must have as working capital to support operations.

CHAPTER II ACTIVITY OF THE BANKING CORRESPONDENT

Article 9. (Obligation of Training)

The financial institution must guarantee adequate and continuous training of the banking correspondent, aiming to comply with the following:

1. The obligations imposed by this regulation and other current legislation;
2. The code of conduct in force at the contracting institution; the rules against money laundering and financing of terrorism.

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Article 10. (Permitted Activities)

Under this regulation, the banking correspondent is permitted to carry out the following activities:

a) forwarding of requests for simplified opening of bank accounts and their closure; b) transfers between bank accounts, domiciled at the same banking financial institution; c) interbank transfers; d) capture of deposits for savings and other applications; e) deposit and withdrawal of funds; f) payment of services; g) forwarding of the credit application process; h) disbursement of loans; i) receipt of loan repayment; j) receipt and sending of remittances.

Article 11. (Prohibited Activities)

Under this regulation, it is prohibited for the banking correspondent to carry out the following activities:

a) carry out any operation that is not "online" and without the provision of a receipt; b) advance credits to be made available by the financial institution; c) carry out exchange operations; d) provide any type of guarantee in credit contract operations; e) issue, in its favor, obligations related to intermediated operations;

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f) charge any fees, commissions, or services related to the provision of services that have not been previously agreed upon with the contracting banking financial institution; g) use in its corporate name expressions that suggest activities characteristic of banking financial institutions, namely "bank", "banker", "of credit", "of deposits", "financial leasing" or other similar ones that denote the exercise of activity characteristic of financial institutions; h) subcontract others to exercise the activity of banking correspondent; i) other activities prohibited by current legislation within the Angolan financial system.

Article 12. (Identification of the Banking Correspondent)

1. The banking correspondent, in addition to identifying the company brand, must visually indicate the banking financial institution for which it provides services.
2. The banking financial institution must make available to clients the name, address, phone number, or any other means of communication of the hired banking correspondent, as well as information about the products and services for which it is qualified to provide.
3. The banking financial institution must also make available to its clients the contact and phone number or any other means of communication for complaints regarding the services provided by its banking correspondent.

Article 13. (Technology Used)

1. The banking financial institution must use technology that allows identifying, tracking, and verifying operations carried out by banking correspondents "online".
2. The banking financial institution must ensure that the banking correspondent has adequate and compatible technology with that used in the Interbank Services Company - EMIS, which allows identifying and tracking transactions requested by clients, provided for in number 1 of Article 10 of the

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present Notice, are reflected "online" in their bank accounts, as well as the provision of the respective receipt.

Article 14. (Control Procedures)

The banking financial institution must:

1. Establish a control and security system that contemplates the assignment of responsibilities and clear internal control policies, to mitigate the risks inherent to banking financial operations carried out by banking correspondents;
2. Use verification methods for transactions to promote adherence to these services and allow verification of operations carried out by banking correspondents;
3. Have effective mechanisms to differentiate operations carried out under the contract concluded with correspondents and operations that it carries out within the scope of its corporate object;
4. Ensure that the execution of operations carried out by correspondents is carried out in accordance with its procedures;
5. Guarantee the integrity of client information registered by the banking correspondent;
6. Ensure that banking correspondents observe the provisions contained in the procedure manuals made available, as well as in current legislation.

CHAPTER III COMPLEMENTARY PROVISIONS

Article 15. (Prevention against money laundering and financing of terrorism)

The exercise of the activity of banking correspondent must be in conformity with current legislation regarding prevention against money laundering and financing of terrorism.

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Article 16. (Closure of Activities)

1. The Bank of Angola may determine the closure of the banking correspondent activity if the following situations occur:

   a) if it has entered into a contract through false declarations or other illicit means, regardless of the criminal sanctions applicable to the case; b) if any of the requirements established in Article 4 of this regulation are no longer met; c) if the financial institution ceases its activity; d) if the banking correspondent cannot honor its commitments, namely regarding the security of funds entrusted to it; e) if the banking correspondent violates the laws and regulations governing the activity of banking financial institutions or does not observe the determinations of the contracting financial institution, putting at risk the interests of depositors and other creditors.

2. The Bank of Angola may also promote the closure of the banking correspondent activity whenever it:

   a) puts the transparency of operations at risk; b) refuses or places obstacles to the carrying out of verifications or inspections by the Bank of Angola; c) does not observe the legal and regulatory provisions on combating money laundering and financing of terrorism.

CHAPTER IV FINAL PROVISIONS

Article 17. (Sanctioning Regime)

Violation of the provisions of this Notice is punishable under the terms of Law No. 13/05 of 30 September and Notice 16/07 of 12 September.

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Article 18. (Doubts and Omissions)

Doubts and omissions that arise in the interpretation and application of this Notice are resolved by the Bank of Angola.

Article 19. (Entry into Force)

This Notice enters into force on the date of its publication.

PUBLISH

Luanda, on 14 August 2012

THE GOVERNOR

(Signature)

JOSÉ DE LIMA MASSANO

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