Decree No. 34/92, of October 26, Approving the Regulation of Law No. 28/91, of December 31, on Credit Institutions

Monday, October 26, 1992 I SERIES - Number 43 REPUBLIC BULLETIN OFFICIAL PUBLICATION OF THE REPUBLIC OF MOZAMBIQUE 2ND SUPPLEMENT NATIONAL PRESS OF MOZAMBIQUE NOTICE The material to be published in the «Republic Bulletin» must be submitted in a duly authenticated copy, one for each subject, containing, in addition to the necessary indications for this purpose, the following endorsement, signed and authenticated: For publication in the «Republic Bulletin». SUMMARY Council of Ministers: Decree No. 34/92: Approves the Regulation of Law No. 28/91, of December 31, Law on Credit Institutions. COUNCIL OF MINISTERS Decree No. 34/92 of October 26 Law No. 28/91, of December 31, establishes the terms of incorporation and operating conditions for Commercial and Investment Banks headquartered in Mozambique, as well as the opening and operating conditions for branches, agencies, and representative offices of similar institutions headquartered abroad. The same diploma allows for the establishment of off-shore banks, auxiliary credit institutions, savings banks, credit cooperatives, mutual benefit societies, and mutual associations, but refers these to their own operating regulations to be regulated within the competencies defined by law. With the approval of the aforementioned law, the need for its regulation became immediately pressing, regarding the incorporation and operating conditions of Commercial and Investment Banks, as well as the opening and operating conditions of branches, agencies, and representative offices of similar foreign banking institutions. In these terms, under paragraph e) of No. 1 of article 153 of the Constitution of the Republic, and article 96 of Law No. 28/91, of December 31, the Council of Ministers decrees: Sole Article. The Regulation of Law No. 28/91, of December 31, Law on Credit Institutions, attached hereto, which forms an integral part of this decree, is hereby approved. Approved by the Council of Ministers. Publish. The Prime Minister, Mário Fernandes da Graça Machungo. Regulation of the Law on Credit Institutions CHAPTER I Application for authorization to incorporate credit institutions ARTICLE 1

1. Applications for authorization to incorporate credit institutions shall be submitted to the Bank of Mozambique and accompanied by the following documents: a) A reasoned statement of the economic and financial needs justifying the incorporation; b) Characterization of the type of institution to be incorporated, its geographical location, and respective organizational structure, specifying the financial resources and material, technical, and human means to be used; c) Draft statutes; d) Forecast balance sheet and treasury budget for each of the first three years of activity; e) A declaration of commitment that, at the time of incorporation and as a condition thereof, the amount of share capital required by law will be shown to have been deposited with the Bank of Mozambique; f) Personal and professional identification of the founding shareholders, specifying the number of shares subscribed by each; g) Criminal record certificate of the founding shareholders of the institution to be established, when natural persons, and of the designated administrators, directors, or managers, when legal persons; h) A declaration issued by the competent authority stating that neither the founding shareholders nor the companies or firms they have controlled or of which they have been administrators, directors, or managers have been declared insolvent or bankrupt; i) Indication of countries in which they operate or have operated and the type of activities pursued, for cases of banks or other legal entities.
2. The founding shareholders, administrators, directors, or managers referred to in paragraph g) of the preceding number, when of foreign nationality but resident in the Country, must present, in addition to the criminal record certificate from their country of origin, the criminal record certificate issued by the Mozambican authorities. ARTICLE 2 If the founding shareholders are credit institutions or other legal entities, the applications for authorization shall also be accompanied by the following elements: a) A certificate issued by the competent entity stating that the applicant is legally constituted and authorized to carry out its activity; b) Statutes or articles of association of the applicant, last approved, audited, and published balance sheet, extract from the respective profit and loss account, and document proving the reserves and provisions constituted; c) List, accompanied by biographical notes, of the persons who constitute the administrative and management bodies of the institution to be established; d) Distribution of the applicant's share capital and a list of shareholders holding more than 5% of the same capital; e) List of credit institutions and other companies in whose capital the applicant participates; f) List of the applicant's representations outside its country of origin; g) Document of authorization from the applicant's general assembly or legal representatives with sufficient powers for its participation in the institution to be incorporated; h) Certificate, issued by the competent authority of the country of origin, stating that the applicant has been authorized to participate in the institution to be incorporated or that such authorization is not necessary. Article 3 The certificate referred to in paragraph g) of No. 1 of article 1 and in paragraphs a) and h) of the preceding article must not have been issued more than ninety days ago. ARTICLE 1
3. In addition to the documents referred to in articles 1 and 2 of this Regulation, applications for authorization to incorporate credit institutions must also be accompanied by a complementary document proving that an unavailable prior deposit equivalent to 5% of the share capital has been constituted with the Bank of Mozambique.
4. The prior deposit referred to in the preceding number may be replaced by a bank guarantee of equal value issued by a first-class bank.
5. In case of rejection of the application, the Bank of Mozambique, as the case may be, shall return the deposit amount to the applicant, or release the guarantee that has been provided.
6. Once the application is authorized, the applicant may dispose of the amount of the prior deposit made for the purpose of realizing the minimum share capital, in accordance with No. 2 of article 33 of Law No. 28/91, of December 31.
7. The prior deposit referred to in No. 1 of this article shall revert to the State when the situations provided for in article 15 and in paragraphs a) and d) of No. 1 of article 16 of Law No. 28/91, of December 31, are verified, when detected before the formal incorporation of the institution.
8. If the situations described in paragraphs a) and d) of No. 1 of article 16 of Law No. 28/91, of December 31, are verified after the formal incorporation of the institution, in addition to the revocation of the authorization to carry out the activity, a fine of 5% of the share capital shall also be imposed, which shall revert to the State. ARTICLE 5 Applications for authorization to incorporate credit institutions shall be submitted in triplicate. ARTICLE 6 All documents intended to support the application for authorization must, when written in a foreign language, be accompanied by their respective translation into the official language of the Country and legalized. ARTICLE 7 The applicants shall designate one among themselves to represent all of them before the authorities responsible for evaluating the applications for authorization and shall have domicile in Mozambique for the purpose of receiving notifications or correspondence. CHAPTER II Processing of the authorization application ARTICLE 8 Upon receipt of the application for authorization to incorporate a credit institution, the Bank of Mozambique, in accordance with No. 1 of article 11 of Law No. 28/91, of December 31, must prepare its opinion and forward it to the Ministry of Finance within a maximum period of sixty days, in accordance with the provisions of article 14 of the aforementioned law. Article 9 If the application for authorization has been accompanied by all the elements deemed necessary under articles 1, 2, and 4 of this diploma, the decision of the Council of Ministers must be issued within a maximum period of sixty days from the date the application is submitted to the Ministry of Finance. ARTICLE 12 Once the application is authorized and before the start of activity, the Bank of Mozambique, through the competent Department, shall verify the suitability of the facilities for the activity that the institution proposes to develop. CHAPTER III Applications for authorization to open branches ARTICLE 11 Applications for authorization to open branches of credit institutions shall be submitted to the Bank of Mozambique, accompanied by a justifying memorandum, which shall include indicators related to the location where the branch is intended to be installed, namely: a) Type of operations to be carried out; b) Forecast of expected financial results; c) Number of national and foreign workers to be employed; d) Other information that the applicant deems necessary for evaluating the contribution that the branch may make to the economic development of the locality. ARTICLE 12 In evaluating the applications for authorization referred to in the preceding article, the following shall be taken into account: a) The applicant's capacity; b) The interest for the local economy; c) The number and nature of credit institutions already established in the locality. ARTICLE 13 It is a condition for authorization that the sum of the institution's capital and reserve funds is adequate to guarantee the operations to be carried out by the branch. CHAPTER IV Requirements for the registration of credit institutions ARTICLE 14 Credit institutions are subject to general registration under commercial law in addition to the special registration provided for in article 23 of Law No. 28/91, of December 31. ARTICLE 15 The registrations referred to in the preceding article, in the case of credit institutions headquartered in Mozambique, shall include the following elements: a) The institution's name; b) The date of its incorporation; c) The location of the headquarters; d) The subscribed capital; e) The paid-up capital; f) The names of the administrators, members of the management boards, and any other agents with management powers, as well as those of the members of the supervisory board and of the partners or owners in the case of banking houses; g) The location and date of opening of branches; h) Any changes that occur in the elements referred to in the preceding paragraphs. ARTICLE 16 In the case of foreign credit institutions, the registration shall cover: a) The institution's name; b) The date on which it was authorized to establish itself in Mozambique; c) The location of the headquarters; d) The paid-up capital; e) The capital with which it operates in Mozambique; f) The names of the administrators, directors, and/or managers in Mozambique; g) The location of the main establishment in Mozambique and its branches; h) Any changes that occur in the elements referred to in the preceding paragraphs. ARTICLE 17 The registration of credit institutions with the Bank of Mozambique must be requested within ninety days from the date of the definitive incorporation of the credit institution, when it is national, or from the authorization to establish itself in Mozambique in the case of foreign credit institutions, but always before the start of activity. ARTICLE 18 The endorsement of changes to the registration with the Bank of Mozambique must be requested within thirty days from the date they occur. ARTICLE 19 Summary certificates of the registration and its changes may be issued to anyone who demonstrates a legitimate interest in requesting them. CHAPTER V General Assembly of Credit Institutions ARTICLE 20 For the purpose of participating in the general assembly, shareholders must have recorded in their name in the company's own register book, or deposited in the bank's vaults, at least the minimum number of shares required by the statutes for exercising the right to vote, up to fifteen days before the date scheduled for the general assembly meeting. ARTICLE 21 It is the responsibility of the chairman of the general assembly, or the board of directors, if the former has not yet been elected, to verify whether the number of shareholders registered for participation in the general assembly exceeds the maximum limit provided by law, and, if it exceeds, to organize a list of depositors indicating the number of votes each is entitled to. ARTICLE 22 Once the sum of possible votes is obtained, it shall be divided by three hundred, and shareholders who have a number of votes equal to or greater than the quotient shall be immediately considered as members of the general assembly. ARTICLE 12 Each shareholder shall be entitled, without prejudice to the provisions of paragraph 3 of article 183 of the Commercial Code, to a number of votes equal to the integer part of the quotient resulting from the division of the number of shares held or represented by the minimum number of shares required by the statutes for the allocation of a vote in the assembly. ARTICLE 24 Shareholders who are not in the conditions of article 22 of this diploma shall be invited to group themselves so that each group has a number of votes equal to or greater than the quotient referred to in the same article, with shareholders granting power of attorney to one, who shall be their representative in the assembly. ARTICLE 25 For the purpose referred to in the preceding article, one shareholder may represent several, notwithstanding any statutory provision to the contrary. ARTICLE 26 The list of shareholders grouped in accordance with the provisions of article 24 shall be published with a minimum advance of ten days, counted from the date scheduled for the general assembly, in the most widely read newspaper in the locality of the institution's headquarters, if any, and also in a newspaper in the country's capital. ARTICLE 27 Powers of attorney issued for the purposes of article 24 shall be presented to the Chairman of the General Assembly up to the last business day before the day on which the assembly is to meet. CHAPTER VI Trust Commissions ARTICLE 28 Capital subject to trust commissions, as well as the corresponding liabilities, shall be recorded separately in the bank's balance sheet, in simple memorandum accounts. CHAPTER VII Liquidity and Solvency Guarantees ARTICLE 29 The following are considered cash availabilities of commercial banks: a) Cash