Instruction No. 005-DOM/20 of September 18, 2020 on the establishment of an exceptional refinancing instrument to support the activities of certain enterprises

CENTRAL BANK OF MADAGASCAR

MONETARY OPERATIONS DIRECTORATE

INSTRUCTION NO. 005-DOM/20 on the establishment of an exceptional refinancing instrument to support the activities of certain enterprises

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 on 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. 006-DOM/19 of 25 October 2019 on money market instruments,

DECIDES

Article 1: CONTEXT

In response to the consequences suffered by certain enterprises due to the prevailing global health situation, the Central Bank of Madagascar (BFM) is establishing an exceptional credit line in favor of banks governed by Law No. 95-030 of 22 February 1996 on the activity and supervision of credit institutions, or the "Banking Law".

Article 2: OBJECT

Within the specific framework stipulated in Article 1 of this Instruction, the market instrument provided for in Article 9 of Instruction No. 006-DOM/19 of 25 October 2019 on money market instruments is subject to a specific implementation.

Article 3: SCOPE OF APPLICATION

The application of the provisions of this Instruction is exclusively linked to the support by banks of enterprises with an annual turnover of less than or equal to five billion Ariary (5,000,000,000 Ariary) at the time of publication of their latest financial statements.

Article 4: IMPLEMENTATION PROCEDURES

This article prescribes the specific implementation procedures for the instrument provided for in Article 9 of Instruction No. 006-DOM/19 of 25 October 2019 on money market instruments.

4.1 BFM may launch fixed-rate liquidity injection operations with total or partial allocation of bids, with maturities of up to three (3) years. The adjudication of bids submitted by banks remains at BFM's discretion based on the evolution of monetary aggregates and monetary stability.

4.2 These operations are launched at most once per month, on the second Friday of the month.

4.3 The rate for these exceptional liquidity injection operations is set at 4.97%.

4.4 Banks must indicate in their submission, in accordance with the template in Annex I, the amount of their bid relative to the rate set by BFM.

4.5 Eligible collateral for this exceptional refinancing are BTA and BTF, respecting the collateral coverage principle for liquidity injection operations on the money market. Upon the launch of repurchase operations, this type of refinancing will comply with the processing procedures for any liquidity injection operation by BFM.

Article 5: OBLIGATIONS AND SANCTIONS

Under penalty of early repayment in case of non-compliance with the obligations arising from this Instruction, banks benefiting from BFM's exceptional refinancing are required to:

• exclusively allocate the funds obtained under this Instruction to support the enterprises indicated in Article 3 above.

• declare to BFM, with a copy to the General Secretariat of the Banking and Financial Supervision Commission, all information relating to credits granted under this Instruction in accordance with the template in Annex II. The declaration is made monthly and at the latest one week before the next adjudication, even for banks that do not yet intend to submit to a new BFM announcement.

• account for the refinancing received from BFM under this Instruction in a separate dedicated sub-account within account 116 "Term Borrowings – Central Bank" on the liability side of its balance sheet.

Article 6: RESTRICTIONS

Banks that have already received liquidity via the instrument governed by this Instruction may not submit to other operations on the same instrument until the previously obtained funds are exhausted. This exhaustion is characterized by the unavailability and retention by the beneficiaries of all funds lent by BFM at the time of the operation's launch.

Article 7: FINAL PROVISIONS

Without prejudice to the specific provisions stated above, the procedures applicable to exceptional refinancing operations governed by this Instruction are identical to those for fixed-rate operations with total or partial allocation of bids stipulated in Article 9 of Instruction No. 006-DOM/19 of 25 October 2019 on money market instruments.

Article 8: ANNEXES

The annexes form an integral part of this Instruction.

Article 9: ENTRY INTO FORCE

This Instruction enters into force as of the date of its signature.

Article 10:

All provisions contrary to this Instruction are hereby repealed, notably those of Instruction No. 003-DOM/20 of 28 May 2020 annulling and replacing the provisions of Instruction No. 002-DOM/20 of 10 April on the establishment of an exceptional refinancing instrument to support the activities of SMEs, as well as Instruction No. 004-DOM/20 of 16 July 2020 amending certain provisions of Instruction No. 003-DOM/20.

Antananarivo, 18 SEP 2020

THE GOVERNOR
Henri Edmond RABARIJOHN

ANNEX I

SUBMISSION FOR EXCEPTIONAL LIQUIDITY INJECTION OPERATIONS TO SUPPORT THE ACTIVITIES OF CERTAIN ENTERPRISES

Bank Name:

Rate:

Launch Date: ____________________

SUBMISSION
Total Amount (in Ar)
In Figures	In Words

COLLATERAL:

Total collateral amount(1) (2): Ariary…………………
Interest amount: Ariary …………………

ORDER NO.	NATURE	REFERENCE	ACQUISITION RATE	MATURITY	NUMBER OF SECURITIES	COLLATERAL
						Nominal Amount per Security (In Ariary)
						In Words	In Figures
TOTAL...

(1) Requested amount plus interest
(2) Multiple of 100 million Ariary.

At ____________________, on ____________________ (Authorized signatures and bank stamp)

ANNEX II

ESTABLISHMENT NAME
Date: ____________________

List of enterprises that received credit, subject to exceptional refinancing by BFM under Instruction No. 005-DOM/20 on the establishment of an exceptional refinancing instrument to support the activities of certain enterprises for the month of ...............

Rank	Beneficiary Name	Nature of Credit	Amount of Credit Disbursed	Amount of Installment	Date of Disbursement or Establishment	Date of 1st Repayment	Credit Duration	Maturity Date	Other Information
1									- Credit Rate<br>- Activity Sector<br>- Turnover<br>- Etc.
...
n
	TOTAL

Authorized signature and stamp