Regulatory Alerts1991-10-16
Instruction No. 03/91: Monetary Policy - Credit Operations and Limits
Issued by the National Bank of Angola, this instruction establishes a quantitative credit limit regime for all domestic financial institutions to align credit expansion with monetary programming, inflation targets, and external reserve goals. It defines controlled credit as the aggregate balance of Internal Credit, allocates quarterly limits proportionally to each institution's share of system-wide deposits, and exempts credits funded by fiscal or foreign resources. The directive mandates specific reporting schedules attached to the Monthly Synthetic Balance Sheet, assigns monitoring and enforcement responsibilities to designated directorates, and requires institutions exceeding their monthly limits to deposit the excess amount interest-free with the Central Bank until regularized.
INSTRUCTION NO. 03/91 Subject: MONETARY POLICY
- Credit Operations/Limits .Regulation This Instruction defines the concept of credit subject to control, in order to establish consistency between monetary programming and the targets set for inflation and external reserves.
- INSTITUTIONS SUBJECT TO THE GENERAL CREDIT LIMIT DISTRIBUTION REGIME. The credit limit regime applies to financial institutions operating in the Country, namely banking institutions, special credit institutions, and parabanking institutions.
- CONCEPT OF CREDIT SUBJECT TO CONTROL Given the need to align the information base with the requirements for analyzing and defining monetary policy, the aggregate balance, existing in each financial institution, of the items comprising Internal Credit as stated in the "Monthly Synthetic Balance Sheet", is defined as credit whose expansion is subject to quantitative control.
- CALCULATION OF THE CREDIT LIMIT I - The distribution of the quantitative limit for credit operations of financial institutions is made proportionally to each institution's share in the global collection of demand and time deposits of the Financial System, with the ceiling for each quarter adjusted based on the weighting of the previous quarter. II - Financial institutions that commence granting credits after the entry into force of the Organic Law of the National Bank of Angola will benefit from special treatment during their first three months of activity, consisting of the allocation of specific credit limits, defined on a case-by-case basis in proportion to the quotas of their available resources for credit operations. III - Credits backed by resources of fiscal or foreign origin are exempt from the established limit. IV - Operational margins resulting from the gradual reduction of credit positions in the commercial area of the National Bank of Angola or from revisions or adjustments in the calculation of limits will be redistributed among the other Financial Institutions, in the proportion indicated above.
V - The credit limit authorized for each institution will be communicated via a letter to be issued by the Issuance and Credit Directorate of the National Bank of Angola. 4. SPECIFIC INFORMATION The following information shall be specifically disclosed, in a schedule to be attached to the "Monthly Synthetic Balance Sheet":
- schedule for "Calculation of Mandatory Reserves", according to the model attached to the respective regulation:
- schedule for "Control of Credit Limits" according to the attached model.
- RESPONSIBILITIES I- It is the responsibility of the Studies and Statistics Directorate to carry out monthly monitoring of the execution of monetary programming and the definition of credit limits, proposing superiorly the adjustment measures for better control of payment means. II- It is the responsibility of the Issuance and Credit Directorate to directly communicate to each Financial Institution its quantitative limit for credit operations. III- The Banking Supervision Directorate will verify in Financial Institutions compliance with the limits referred to in this Instruction.
- PENALTIES Without prejudice to other measures that may be adopted, and provided that financial institutions exceed the established monthly credit limit, they will be obliged to deposit with the Central Bank, without interest, an amount equivalent to the excess incurred, until the initially defined position is regularized. Luanda, on October 16, 1991 THE GOVERNOR Fernando Alberto da Graça Teixeira
CONTROL OF CREDIT LIMITS Institution: Code: Month/year: Responsible: Date: Signature: (in millions of New Kwanzas) Balance of "Internal Credit" accounts, at the end of the previous quarter PLUS: Credits utilized in the quarter.. SUBTOTAL: LESS: Credits backed by resources of fiscal or foreign origin..
- Amortizations or settlements in the . current quarter Control subject balance LESS: Limit for the quarter The Value to be collected (if positive) or Available margin (if negative) For BNA/DEE use Analyst's opinion: Dispatch: of credit. I