Regulatory Alerts2020-08-03
Instruction No. 14/2020 of August 4 on the Custody Fee Applicable to Excess Reserves of Commercial Banks Deposited at the National Bank of Angola
The National Bank of Angola issued Instruction No. 14/2020 to establish a daily 0.1% custody fee on commercial banks' excess reserves exceeding Kz 3 billion, aiming to stimulate financial intermediation and broader economic activity. The fee applies to the net balance of free reserves deposited at the central bank, calculated daily and automatically debited from banks' SPTR accounts on the following business day. All interpretative doubts regarding this fee framework are resolved by the National Bank of Angola, with the regulation taking effect on August 10, 2020.
INSTRUCTION NO. 14/2020 of August 4 SUBJECT: FINANCIAL SYSTEM
- Custody Fee Applicable to Excess Reserves of Commercial Banks Deposited at the National Bank of Angola
In order to encourage an increase in the level of financial resource intermediation between Commercial Banks and other economic agents, with the underlying objective of stimulating economic activity; Under the combined provisions of Articles 26 and 51, both of Law No. 16/10 of July 15, the National Bank of Angola Act.
I DETERMINE:
- Object and Scope This Instruction establishes the custody fee to be applied by the National Bank of Angola to the excess reserves of Commercial Banks.
- Excess Reserves The excess reserves of Commercial Banks represent the portion of total bank reserves that exceeds mandatory reserves. For the purposes of this Instruction, excess reserves are divided into two levels: (i) level exempt from the custody fee and (ii) level subject to the custody fee, whereby: a) The level exempt from the custody fee corresponds to the value of Kz 3,000 (Three Thousand Million Kwanzas);
CONTINUATION OF INSTRUCTION NO. 14/2020 Page 2 of 2 b) The level subject to the custody fee corresponds to the balance of excess reserves net of the value established in the preceding sub-paragraph of this section. 3. Custody Fee Rate The custody fee rate is 0.1% (zero point one percent) per day. 4. Calculation Base The custody fee amount payable by each Commercial Bank is calculated daily on the closing daily balance of their free reserves deposited at the National Bank of Angola, minus the value referred to in sub-paragraph a) of section 2 of this Instruction. 5. Payment The amount due by each Commercial Bank is debited from its account with the SPTR on the next business day following calculation. 6. Doubts and Omissions Doubts and omissions arising from the interpretation and application of this Instruction are resolved by the National Bank of Angola. 7. Entry into Force This Instruction enters into force on August 10, 2020.
PUBLISHED. Luanda, August 4, 2020.
THE GOVERNOR JOSÉ DE LIMA MASSANO