Regulatory Alerts2017-04-03
Notice No. 7/GBM/2017, of April 3 – Minimum Capital for Credit Institutions, Financial Companies and Microfinance Operators
The Bank of Mozambique issued Notice No. 7/GBM/2017 to update the minimum share capital requirements for credit institutions, financial companies, and microfinance operators in response to growing operational risks and national economic dynamics. The regulation establishes new capital thresholds ranging from 75,000 MT for microcredit operators to 1.7 billion MT for banks, while mandating that existing banks progressively increase their capital over a three-year compliance period through cash contributions. Furthermore, the notice revokes the prior 2005 directive and centralizes interpretative authority within the Bank’s Regulation and Licensing Department.
--- Banco de Moçambique --- Governor
NOTICE NO. 7/GBM/2017 Maputo, April 3, 2017
SUBJECT: Minimum Capital for Credit Institutions, Financial Companies and Microfinance Operators
Notice No. 4/GGBM/2005, of May 20, establishes the minimum capital for credit institutions, financial companies and microfinance operators.
Given the need to update the aforementioned legal instrument and amend the minimum share capital of banks, in order to align it with the increasing risks inherent to their activity and the dynamics of the national economy, the Bank of Mozambique, in exercise of the powers conferred upon it by paragraph 1 of Article 61 of Law No. 15/99, of November 1 – Law on Credit Institutions and Financial Companies, updated by Law No. 9/2004, of July 21, combined with paragraph a) of Article 28 of Decree No. 57/2004, of December 10 – Microfinance Regulation, determines:
Article 1 (Minimum Share Capital)
The minimum share capital for credit institutions and financial companies, as well as for the microfinance operators listed below, is henceforth:
a) Banks.................................................................................. 1.700.000.000,00 MT b) Leasing companies............................................. 25.000.000,00 MT c) Investment companies................................................... 25.000.000,00 MT d) Venture capital companies................................................ 10.000.000,00 MT e) Factoring companies........................................................... 3.500.000,00 MT f) Investment fund management companies......................... 700.000,00 MT g) Financial brokerage companies.................................... 1.400.000,00 MT h) Brokerage companies............................................................. 420.000,00 MT i) Asset management companies........................................ 700.000,00 MT j) Group purchasing administration companies................... 700.000,00 MT k) Exchange houses.................................................................... 2.500.000,00 MT l) Credit cooperatives........................................................... 200.000,00 MT m) Microbanks: (i) General Savings and Credit Bank................................... 5.000.000,00 MT (ii) Economic Savings Bank............................................................. 2.400.000,00 MT (iii) Postal Savings Bank............................................... 1.800.000,00 MT (iv) Rural Financial Bank...................................................... 1.200.000,00 MT n) Electronic money institutions........................................... 25.000.000,00 MT o) Credit card issuing or management companies.......... 3.500.000,00 MT p) Discount houses............................................................... 10. 000. 000,00 MT q) Microfinance operators subject to monitoring: (i) Savings and loan organizations......................... 150.000,00 MT (ii) Microcredit operators.............................................. 75.000,00 MT (iii) Savings collection intermediaries......................... exempt.
--- Banco de Moçambique --- Governor
Article 2 (Adjustment Period)
Banks already established as of the publication date of this Notice must align their share capital to the minimum established in the preceding Article 1, through cash contribution, observing the following deadlines:
| Adjustment Deadline | New Minimum Share Capital |
|---|---|
| Up to 1 year after the publication of this Notice | 570.000.000,00 MT |
| Up to 2 years after the publication of this Notice | 1.140.000.000,00 MT |
| Up to 3 years after the publication of this Notice | 1.700.000.000,00 MT |
Article 3 (Clarification of Queries)
Any doubts arising from the interpretation and application of this Notice must be submitted to the Regulation and Licensing Department of the Bank of Mozambique.
Article 4 (Revocation)
Notice No. 4/GGBM/2005, of May 20, and all provisions contrary thereto are hereby revoked.
Article 5 (Entry into Force)
This Notice enters into force on the date of its publication.