Law No. 94-004 of June 10, 1994 Establishing the Statutes of the Central Bank of Madagascar (Official Journal No. 2248, June 10, 1994), as Amended by Laws No. 95-030 (February 22, 1996), 2005-036 (February 20, 2006), and No. 2003-004 (July 7, 2003)

LAW NO. 94-004 OF JUNE 10, 1994 ESTABLISHING THE STATUTES OF THE CENTRAL BANK OF MADAGASCAR (Official Journal No. 2248 of June 10, 1994, Special Edition, p. 1303), amended by Law No. 95-030 of February 22, 1996 (Official Journal No. 2350 of March 4, 1996, Special Edition, p. 292), amended by Law No. 2005-036 of February 20, 2006, amended by Law No. 2003-004 of July 7, 2003

TABLE OF CONTENTS TITLE I GENERAL PROVISIONS TITLE II ATTRIBUTES OF THE CENTRAL BANK Chapter 1: Privilege of Issuance Chapter II: Operations on Gold and Foreign Exchange Chapter III: Assistance by the Central Bank to the State and Public Authorities Chapter IV: Assistance by the Central Bank to Banks and Financial Institutions Chapter V: Credit Regulation Chapter VI: Provisions Common to Chapters II, III, IV and V Chapter VII: Other Attributes and Operations

TITLE I GENERAL PROVISIONS Article 1. The Central Bank of Madagascar (BCM), hereinafter referred to as the "CENTRAL BANK", is a public institution with legal personality and financial autonomy. Art. 2. The seat of the Central Bank is in Antananarivo. The Central Bank may establish branches, agencies, or counters in Madagascar in any localities it deems useful. It may have correspondents or representatives wherever it deems useful, in Madagascar or abroad. Art. 3. The Central Bank is considered a commercial entity in its relations with third parties. Its operations are governed by commercial legislation to the extent not otherwise provided in this law. It is not subject to public accounting rules. It follows ordinary commercial accounting rules, unless otherwise provided in this law. Art. 4. The capital of the Central Bank is fully subscribed by the State. It is fixed by decree taken in the Council of Ministers. It may be increased either by incorporation of reserves, upon deliberation of the Board of Directors, or by a new endowment subscribed by the State; This increase is confirmed by decree taken in the Council of Ministers. Art. 5. The dissolution of the Central Bank may only be pronounced by law.

TITLE II ATTRIBUTES OF THE CENTRAL BANK Art. 6. The Central Bank's general mission is to ensure the internal and external stability of the currency. To this end, it formulates and implements monetary policy independently. It carries out its credit mission within the framework of the Government's general economic policy. It ensures the maintenance of an appropriate level of national foreign exchange reserves. Within its general mission, it is consulted on draft budgets, public investment programs, and plans prior to their submission to the Government. It has a period of fifteen clear days to submit its opinion to the Head of Government.

It informs the President of the Republic and the Head of Government of any event that may affect monetary stability. Top of page CHAPTER 1 PRIVILEGE OF ISSUANCE Art. 7. (Law No. 2003-004 of July 7, 2003 amending the provisions of Article 7 of Law No. 94-004, Official Journal of the Republic of Madagascar of August 4, 2003 p. 2025) The Ariary is the monetary unit of Madagascar. However, the denomination "Franc malgache" or "Iraimbilanja", worth one-fifth of the Ariary, is admitted. (Former article: Art. 7. - The Malagasy Franc is the monetary unit of Madagascar. The denominations "Iraimbilanja" (worth one Malagasy Franc) and "Ariary" (worth five Malagasy Francs) are admitted.) Art. 8. The Central Bank alone exercises the privilege of issuing banknotes and coins. These notes and coins alone have legal tender status on the territory of Madagascar. Art. 9. Banknotes have unlimited discharge power. The discharge power of coins may be limited by decree. They are, however, received without limitation by the Central Bank and public cashiers. Art. 10. No opposition may be served on the Central Bank in connection with the loss or theft of banknotes. Art. 11. The creation, issuance, withdrawal, or change of banknotes or coins, as well as the related conditions, are defined by the Central Bank. The corresponding decisions are confirmed by decree. Art. 12. When the legal tender status of a type of banknote or coin has been withdrawn, the Central Bank remains obligated to ensure their exchange at its counters for other types of banknotes or coins having legal tender, under conditions fixed by decree. After a date set by this decree, the counter-value of the notes and coins is paid to the Treasury. If banknotes or coins are presented to the Central Bank after this date, their counter-value is refunded by the Treasury to the Central Bank. Art. 13. The reimbursement of a torn or damaged banknote is granted when the cut contains all identifying signs and features. In other cases, reimbursement falls under the discretion of the Central Bank. The reimbursement of a coin whose identification has become impossible or which has undergone any alteration or damage also falls under the discretion of the Central Bank. The Central Bank seizes for destruction banknotes and coins whose reimbursement has been refused. A confiscation certificate is issued to the holder. Art. 14. Counterfeiting and falsification of banknotes and coins issued by the Central Bank, having legal tender status, as well as their use, sale, and distribution of such counterfeit or falsified notes and coins, are sanctioned by the applicable criminal provisions. Without prejudice to possible penalties, the Central Bank is authorized to join as a civil party to claim estimated compensation for banknotes and coins thus put into circulation by the perpetrators and accomplices of counterfeiting or falsification. Banknotes or coins recognized as counterfeit or falsified by its cash services are confiscated by the Central Bank and retained as evidence of the criminal offense, then destroyed after the judicial procedure is extinguished. Top of page CHAPTER II OPERATIONS ON GOLD AND FOREIGN EXCHANGE Art. 15. The Central Bank may conduct, for its own account and on behalf of third parties, all operations on gold, means of payment, and securities denominated in foreign currencies or defined by a weight of gold. It may lend or borrow in national or foreign currency to foreign banks and to foreign or international monetary and financial institutions. In connection with these operations, the Central Bank may request or grant, as appropriate, guarantees it deems suitable. Art. 16. (Law No. 2005-036 of February 20, 2006) The profits or losses resulting from the revaluation of the Central Bank's international assets or liabilities are accounted for in the results accounts. (Former article: Art. 16. - The profits or losses resulting from the revaluation of the Central Bank's international assets or liabilities are accounted for in a special foreign exchange account. The State covers any loss not sufficiently covered by this account. It must be entered in the State budget of the following year.) Art. 17. The Central Bank holds in full ownership all gold assets and official foreign exchange reserves, including special drawing rights and the reserve position at the International Monetary Fund. It disposes of them within the framework of its attributes. Art. 18. The Central Bank may maintain remunerated accounts in its books in the name of all foreign banks and all foreign or international institutions or organizations. Art. 19. The Central Bank may, with the authorization of the Minister in charge of Finance, adhere to international monetary agreements. It participates in negotiations aimed at concluding payment or compensation agreements. It is responsible for executing these agreements on behalf of the State. It may conclude all necessary implementation conventions to that end. It assists public authorities in their relations with international financial institutions. Art. 20. The Central Bank participates in the supervision of financial operations, particularly banking operations with foreign countries, and, as appropriate, may be responsible for applying foreign exchange controls. To this end, it may request information from credit institutions (Law No. 95-030 of February 22, 1996) and issue all necessary instructions to them. (Former Art. 20. – The Central Bank participates in the supervision of financial operations, particularly banking operations with foreign countries, and, as appropriate, may be responsible for applying foreign exchange controls. To this end, it may request information from banks and financial institutions and issue all necessary instructions to them.) Top of page CHAPTER III ASSISTANCE BY THE CENTRAL BANK TO THE STATE AND PUBLIC AUTHORITIES Art. 21. The Central Bank is the privileged financial agent of the Government for its cash, banking, and credit operations. It maintains a current account for the Treasury in its books. Upon daily statement of accounts, this account may not present a debit balance. The credit balance of this account accrues interest under conditions fixed by the Central Bank. The operating procedures for this account are defined by an agreement concluded between the Minister in charge of Finance and the Central Bank. Art. 22. The Central Bank may ensure the custody and management of securities belonging to the State or public authorities. Art. 23. The Central Bank participates in the issuance of Treasury or public authority annuities and securities, as well as in the payment of related interest. Art. 24. The Central Bank may, within the limits set forth in Article 28, grant temporary advances to the Treasury. The amounts and procedures for these advances are established by agreements between the Minister in charge of Finance and the Central Bank. Art. 25. The advances referred to in Article 24 must be repaid to the Central Bank within six months following the closure of the fiscal year during which they were granted. In any case, the Central Bank is prohibited from granting new advances when the outstanding amount of advances reaches the ceiling indicated in Article 28. Art. 26. The Central Bank may discount or take in repurchase treasury bills and obligations guaranteed by accountants of the Treasury and maturing within a period of two months, subject to the solvency of the subscriber and the banking guarantor. Art. 27. The Central Bank may not grant any advances or other forms of credit to the State nor acquire any claims on the State or public authorities, except pursuant to Articles 24 and 26. It may, however, accept claims on the State or public authorities as collateral for refinancing operations of credit institutions (Law No. 95-030 of February 22, 1996) provided for in Chapter IV. However, if the collateral is realized, these claims are subject to the ceiling of Article 28. (Former Art. 27. – The Central Bank may not grant any advances or other forms of credit to the State nor acquire any claims on the State or public authorities, except pursuant to Articles 24 and 26. It may, however, accept claims on the State or public authorities as collateral for refinancing operations of banks and financial institutions provided for in Chapter IV. However, if the collateral is realized, these claims are subject to the ceiling of Article 28.)

Art. 28. The total amount of advances granted to the State pursuant to Articles 24 and 27, third paragraph, may not exceed fifteen percent of the State's ordinary revenues as recorded during the previous fiscal year based on official documents established by the Treasury. In exceptional circumstances, the above fifteen percent limit may be raised to twenty percent by legislative means, upon a special report from the Central Bank for a maximum duration of six months. Top of page CHAPTER IV ASSISTANCE BY THE CENTRAL BANK TO BANKS AND FINANCIAL INSTITUTIONS Art. 29. The Central Bank opens current accounts in its books for credit institutions (Law No. 95-030 of February 22, 1996). Upon daily statement of accounts of the Central Bank, each account may not present a debit balance. The credit balance does not accrue interest. The operating procedures for these accounts are defined by an agreement concluded between the Central Bank and each account-holding institution. (Former Art. 29. – The Central Bank opens current accounts in its books for banks and financial institutions. Upon daily statement of accounts of the Central Bank, each account may not present a debit balance. The credit balance does not accrue interest. The operating procedures for these accounts are defined by an agreement concluded between the Central Bank and each account-holding institution.) Art. 30. The Central Bank may mobilize in favor of credit institutions (Law No. 95-030 of February 22, 1996) bills representing short, medium, and long-term credits bearing at least two signatures notably solvent, including that of the assignor. The tenor of these bills is fixed by instruction of the Central Bank. The mobilizable portion of bills representing medium and long-term loans is also fixed by instruction of the Central Bank. (Former Art. 30. – The Central Bank may mobilize in favor of banks and financial institutions bills representing short, medium, and long-term credits bearing at least two signatures notably solvent, including that of the assignor. The tenor of these bills is fixed by instruction of the Central Bank. The mobilizable portion of bills representing medium and long-term loans is also fixed by instruction of the Central Bank.) Art. 31. The Central Bank may mobilize, for the benefit of banks and credit institutions (Law No. 95-030 of February 22, 1996), global bills issued to its order, representing primary bills subscribed by initial debtors. The mobilization procedures and conditions are established by instruction of the Central Bank. The subscription of the global bill transfers by operation of law to the Central Bank all rights and actions enjoyed by the subscriber regarding corresponding credits that gave rise to primary bills. (Former Art. 31. – The Central Bank may mobilize, for the benefit of banks and financial institutions, global bills issued to its order, representing primary bills subscribed by initial debtors. The mobilization procedures and conditions are established by instruction of the Central Bank. The subscription of the global bill transfers by operation of law to the Central Bank all rights and actions enjoyed by the subscriber regarding corresponding credits that gave rise to primary bills.) Art. 32. The Central Bank may mobilize for the benefit of credit institutions (Law No. 95-030 of February 22, 1996) securities issued by the Treasury. It may also grant them advances on gold or foreign exchange assets duly pledged in its favor. The conditions for these mobilizations and advances are fixed by instruction of the Central Bank. (Former Art. 32. – The Central Bank may mobilize for the benefit of banks and financial institutions securities issued by the Treasury. It may also grant them advances on gold or foreign exchange assets duly pledged in its favor. The conditions for these mobilizations and advances are fixed by instruction of the Central Bank.) Art. 33. The Central Bank may buy and sell to credit institutions (Law No. 95-030 of February 22, 1996) bills admissible to its portfolio. It defines by instruction the procedures for its interventions in these operations. Notwithstanding the provisions of Article 27, the mobilization or purchase operations of securities issued by the Treasury provided for in Article 32 and in the first paragraph of this article are exercised within a limit of ten percent of the State's ordinary revenues as recorded during the previous fiscal year based on official documents established by the Treasury. This ceiling is calculated based on the average of daily balances of securities held by the Central Bank during each calendar quarter. (Former Art. 33. – The Central Bank may buy and sell to banks and financial institutions bills admissible to its portfolio. It defines by instruction the procedures for its interventions in these operations. Notwithstanding the provisions of Article 27, the mobilization or purchase operations of securities issued by the Treasury provided for in Article 32 and in the first paragraph of this article are exercised within a limit of ten percent of the State's ordinary revenues as recorded during the previous fiscal year based on official documents established by the Treasury. This ceiling is calculated based on the average of daily balances of securities held by the Central Bank during each calendar quarter.) Art. 34. In case of temporary liquidity difficulties of a credit institution (Law No. 95-030 of February 22, 1996) related to the implementation of a restructuring plan acceptable by the Banking and Financial Supervision Commission (Law No. 95-030 of February 22, 1996) controlling credit institutions (Law No. 95-030 of February 22, 1996) and by the Central Bank, the latter may grant an exceptional advance under conditions defined by the Council. (Former Art. 34. – In case of temporary liquidity difficulties of a bank or financial institution related to the implementation of a restructuring plan acceptable by the Commission for the control of banks and financial institutions and by the Central Bank, the latter may grant an exceptional advance under conditions defined by the Council.) Top of page CHAPTER V CREDIT REGULATION Art. 35. The Central Bank may, by instruction, require credit institutions (Law No. 95-030 of February 22, 1996) to maintain a minimum percentage of their deposits and/or commitments in the form of cash or deposits with the Central Bank. (Former Art. 35. – The Central Bank may, by instruction, require banks and financial institutions to maintain a minimum percentage of their deposits and/or commitments in the form of cash or deposits with the Central Bank.) Art. 36. The Central Bank may establish by instruction the general conditions under which credit institutions (Law No. 95-030 of February 22, 1996) may grant loans, advances, guarantees, and other credit operations. (Former Art. 36. – The Central Bank may establish by instruction the general conditions under which banks and financial institutions may grant loans, advances, guarantees, and other credit operations.) Art. 37. To protect the interests of savers and ensure proper functioning of the securities market, prior authorization from the Central Bank is required for any public issuance of securities in Madagascar, excluding securities issued by the Treasury. The Central Bank is consulted by the Government before any issuance of securities in Madagascar and any foreign credit operation carried out by the Treasury. Top of page CHAPTER VI PROVISIONS COMMON TO CHAPTERS II, III, IV AND V Art. 38. The Central Bank may subordinate its assistance to the submission of all documents it deems necessary. It may, as appropriate, require the constitution of all real or personal guarantees. Art. 39. The Central Bank may acquire amicably or through forced sale any movable or immovable property in recovery of its claims. The acquired assets must be alienated within a period of two years, unless they are used for the Central Bank's own needs. However, if these assets cannot be transferred within the required period or if the Central Bank decides to use them for its own needs, these assets are subject to the ceiling of Article 48. Art. 40. In case of non-repayment at maturity of sums due to it, the Central Bank may realize the pledge received as collateral for its claims thirty days after a formal notice to the debtor by registered letter with acknowledgment of receipt. If the pledgor is a third party, a copy of the formal notice is sent to them in the same form. The period is clear. It runs from the receipt of the formal notice by the debtor or, if the copy was received subsequently, by the pledgor. The sale is ordered by the President of the commercial court upon simple petition by the Central Bank, after hearing the debtor's explanations. Art. 41. The instructions provided for in Chapters IV and V are published in the Central Bank bulletin. Top of page CHAPTER VII OTHER ATTRIBUTES AND OPERATIONS Art. 42. The Central Bank ensures the proper functioning of the payment system. To this end, it may establish clearing houses on locations where it deems necessary. It presides over them and establishes by instruction the operating conditions of these houses. Financial and banking institutions with account relations with the Central Bank may join them. Art. 43. Within its competencies, the Central Bank ensures the application of legal and regulatory provisions regarding the exercise of the banking profession and credit control. Art. 44. The Central Bank is consulted on all draft legislative or regulatory projects concerning the currency and relating in particular to:

• the repression of falsification of monetary signs or the use of falsified signs;
• legislation on payment regulations;
• the exercise of the banking profession and related activities;
• the regime and system of exchange rates. Art. 45. The Central Bank conducts all studies and analyses useful for its information and that of public authorities or for improving the functioning of the monetary system.