Instruction No. 001-DOM/20 on Specific Provisions Applicable to Banks Regarding the Mandatory Reserve System

CENTRAL BANK OF MADAGASCAR

DIRECTORATE OF MONETARY OPERATIONS

INSTRUCTION NO. 001-DOM/20 on Specific Provisions Applicable to Banks Regarding the Mandatory Reserve System

The Governor of the Central Bank of Madagascar,

Having regard to Law No. 95-030 of 22 February 1996 on the activity and supervision of credit institutions, as amended,

Having regard to Law No. 2016-004 of 29 July 2016, supplemented by Law No. 2016-057 of 2 February 2017 establishing the Statutes of the Central Bank of Madagascar,

Having regard to Decree No. 2019-2069 of 6 November 2019 repealing the provisions of Decree No. 2014-1684 of 29 October 2014 on the appointment of the Governor of the Central Bank of Madagascar and appointing the Governor of the Central Bank of Madagascar,

Having regard to Instruction No. 008-DOM/19 of 25 October 2019 on the general framework governing mandatory reserves,

Having regard to Instruction No. 009-DOM/19 of 25 October 2019 on the mandatory reserve system,

HEREBY DECIDES

Article 1: As a result of state measures enacted within the framework of the health emergency declared since 21 March 2020, banks governed by Law No. 95-030 of 22 February 1996 on the activity and supervision of credit institutions shall reschedule credit facilities granted to their customers that have become non-performing.

Article 2: The total amount of rescheduled credits from March 2020 onwards (amount of one installment × duration of the payment deferral) may be deducted from the mandatory reserves that banks must maintain with the Central Bank of Madagascar (BFM).

Article 3: Banks wishing to benefit from the measure set out in Article 2 above shall submit a request to this effect to the Governor of BFM, with a copy to the General Secretariat of the Banking and Financial Supervision Commission.

The request shall be made using the template in the annex and must be accompanied by a detailed list of credit rescheduling beneficiaries, as well as all other information related to the rescheduling and any additional information potentially required by BFM or the General Secretariat of the Banking and Financial Supervision Commission.

Article 4: The deadline for receiving requests regarding rescheduled credits for month M is set for the 5th of month M+1, except for rescheduling in March 2020, which may be declared by 15 April 2020 if applicable.

Article 5: After the 10th of month M+1 and as soon as the system indicates the final amount of mandatory reserves, BFM shall inform each bank that submitted a request under Article 3 of the total amount of rescheduled credits to be deducted from their respective mandatory reserves.

Article 6: The admissibility of requests submitted after the lifting of the exceptional situation referred to in Article 1 falls within the sole discretion of BFM.

Article 7: This Instruction shall enter into force as of the date of its signature.

Antananarivo, 10 APR 2020

THE GOVERNOR
Henri Edmond RABARIJOHN

ANNEX
Template for Request Letter to be addressed to the Governor of the Central Bank of Madagascar

Dear Governor,

In my capacity as ..........................., I hereby submit the information requested by the Central Bank of Madagascar regarding the credit rescheduling carried out by <name of credit institution> for the month of .................... To enable their deduction from the mandatory reserves to be maintained by our institution, I certify the accuracy of this information and declare that, to the best of my knowledge, there are no other material facts that the Central Bank of Madagascar should be informed of.

This request refers to the application of the provisions of Instruction No. 001-DOM/20 of ............................... supplementing the provisions of Instruction No. 009-DOM/19 of 25 October 2019 on specific provisions applicable to banks regarding the mandatory reserve system.

Please accept, Governor, the expression of my highest consideration.

Issued at ......................, on

Authorized signature and seal

NAME OF THE INSTITUTION
Date:

List of clients who benefited from credit rescheduling in the month of ...............

Rank	Beneficiary Name	Credit Type	Outstanding Credit Amount	Installment Amount	Initial Due Date	Restructured Credit Due Date	Amount of Rescheduled Installments	Date of Rescheduling Approval	Expected Resumption of Repayment Date	Other Information (*)
1
...
n
							TOTAL

(*) - Beneficiary type (individuals, free zone private companies, ...)

• Client's employer (if possible)
• etc.

Authorized signature and seal