RegAlert2019-10-25
Added · Updated
Instruction No. 008-DOM/19 on the General Framework Governing Mandatory Reserves
The Governor of Banky Foiben'i Madagasikara (BFM) issued Instruction No. 008-DOM/19 to establish the general framework governing mandatory reserves as a core monetary policy instrument. The directive mandates that authorized credit institutions maintain minimum non-interest-bearing deposits with BFM, calculated based on resident and non-resident Ariary and foreign currency assets and liabilities detailed in the annex. It outlines specific calculation bases, reporting procedures, and a tiered penalty system for reserve shortfalls, including escalating fines and potential referral to the Banking and Financial Supervision Commission, while repealing all prior provisions effective November 1, 2019.
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BANKY FOIBEN'I MADAGASIKARA
MONETARY OPERATIONS DEPARTMENT
INSTRUCTION NO. 008-DOM/19
on the General Framework Governing Mandatory Reserves
The Governor of Banky Foiben'i Madagasikara,
Having regard to Law No. 2016-004 of July 29, 2016, supplemented by Law No. 2016-057 of February 2, 2017, establishing the Statutes of the Central Bank of Madagascar,
Having regard to Decree No. 2014-1684 of October 29, 2014, appointing the Governor of the Central Bank of Madagascar,
HEREBY DECIDES
Article 1: This Instruction establishes the general framework for mandatory reserves, which are among the monetary policy instruments available to Banky Foiben'i Madagasikara, hereinafter referred to as BFM.
Article 2: Mandatory reserves represent the minimum amount that credit institutions must maintain in the form of non-interest-bearing deposits with BFM for a period defined by the latter.
Article 3: Credit institutions authorized to receive public deposits and holding Ariary-denominated accounts in the books of BFM are required to establish mandatory reserves in the form of readily available deposits in their current accounts with BFM.
Article 4: The minimum amount of mandatory reserves is determined based on the asset and/or liability items of credit institutions, in Ariary and foreign currencies, for both residents and non-residents, as they appear in the monthly statement and/or the cumulative balance of their holdings with BFM, according to the details set forth in Article 5 below.
Article 5: The bases for calculating mandatory reserves are as follows:
5.1. Demand deposits and similar items (in Ariary and foreign currencies)
- Ordinary accounts
- Guarantee deposits
- Payables
- Matured treasury bills
- Payables on treasury bills
5.2. Time and savings deposits (in Ariary and foreign currencies)
- Time deposits
- Special regime savings accounts
- Outstanding treasury bills
Article 6: Credit institutions subject to the establishment of mandatory reserves shall submit a declaration to BFM in accordance with the model attached as an annex.
Article 7: An Instruction regarding the mandatory reserves system specifies the calculation, declaration, and establishment procedures, as well as the mandatory reserve coefficient.
Article 8: In accordance with the procedures stipulated in Article 7,
- the entire mandatory reserve is established based on the average amount of the operational date balance of the credit institution's current account opened in the books of BFM;
- mandatory reserve surpluses identified at the end of an establishment period are not carry-forwardable.
Article 9: A credit institution that fails to comply with the minimum reserve requirements is subject to a penalty calculated based on the amount of the identified shortfall, the number of days in the relevant period, and the number of infractions committed. Where applicable, the sanctions provided for in the banking law shall apply according to the following steps:
- for a first shortfall, a monetary sanction at the marginal lending facility rate plus 5 percentage points shall be imposed on the credit institution;
- in case of infractions over successive establishment periods, a progressive increase of 5 percentage points per period shall be applied, without exceeding three successive shortfalls and three shortfalls within a fiscal year;
- in case of non-compliance with this latter measure, the penalty rate applied to a third shortfall shall be doubled until the situation is regularized. Furthermore, the credit institution's file shall be transferred to the Banking and Financial Supervision Commission (CSBF), which may impose one or more of the sanctions provided for by the banking law.
The calculated penalty interest shall be automatically debited to the credit institution's current account opened in the books of BFM. The posting date of the entry shall be communicated to the concerned credit institution.
Delays in transmitting information, as well as the submission of inaccurate documents or information, are subject to the sanctions or penalties provided for by the banking law.
Article 10: Annex
The annex forms an integral part of this Instruction.
Article 11: Entry into Force
This Instruction shall enter into force as of November 1, 2019.
Article 12: Final Provisions
All provisions prior to this Instruction are hereby repealed.
Antananarivo, October 25, 2019
THE GOVERNOR
ALAIN H. RASOLOFONDRAIBE
ANNEX
MANDATORY RESERVES
DECLARANT:
STATUS AS OF:
| MANDATORY RESERVES BASE | RESIDENTS | NON-RESIDENTS | EXTRACT OF MONTHLY STATEMENT | ||
|---|---|---|---|---|---|
| Ar | FOREIGN CURRENCY | Ar | FOREIGN CURRENCY | ||
| Ordinary accounts | 210 | ||||
| Guarantee deposits | 213 | ||||
| Payables | 2186 | ||||
| Matured treasury bills | 220 | ||||
| Payables on treasury bills | 2286 | ||||
| Subtotal (1) | |||||
| Time deposits | 211 | ||||
| Special regime savings accounts | 212 | ||||
| Outstanding treasury bills | 220 | ||||
| Subtotal (2) |
| TOTAL = (1) + (2) | ||
|---|---|---|
| Mandatory Reserves to be Established TOTAL x X% |
At ____________________, on ____________________
(Bank signatures and seal)
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Lineage: Superseded
Show all related documents (14)
- Superseded by
- Instruction No. 002-DPM/26 on the General Framework and Operational Procedures of the Tiered Mandatory Reserve System2026
- Amended by
- Instruction No. 001-DOM/20 on Specific Provisions Applicable to Banks Regarding the Mandatory Reserve System2020
- Issued under
- Loi n° 2016-057 du 2 février 2017 complétant la loi n° 2016-004 du 29 juillet 2016 portant statuts de la Banque Centrale de Madagascar (Law No. 2016-057 supplementing the law on the Statutes of the Central Bank of Madagascar)2017Law No. 2016-004 of July 29, 2016, as amended by Law No. 2016-057 of February 2, 2017, establishing the Statutes of the Central Bank of Madagascar2016Decree No. 2014-1684 of October 29, 2014 Appointing the Governor of the Central Bank of Madagascar2014
- Basis for
- Instruction No. 005-DOM/24 of November 4, 2024, amending certain provisions of Instruction No. 009-DOM/19 of October 25, 2019, on the mandatory reserve system and repealing Instruction No. 001-DOM/24 of January 29, 20242024Instruction No. 004-DOM/21 amending certain provisions of Instruction No. 009-DOM/19 of October 25, 2019 on the mandatory reserve system and repealing Instruction No. 007-DOM/20 of November 4, 20202021Instruction No. 010-DOM/20 of 14 December 2020 repealing the provisions of Instruction No. 001-DOM/20 of 10 April 2020 on special provisions applicable to banks concerning the mandatory reserve system2021Instruction No. 007-DOM/20 of November 4, 2020 Amending Certain Provisions of Instruction No. 009-DOM/19 of October 25, 2019 on the Mandatory Reserve System2020Instruction No. 009-DOM/19 on the Mandatory Reserves System2019
- Referred to by
- Instruction No. 001-DOM/24 amending certain provisions of Instruction No. 009-DOM/19 of October 25, 2019 on the mandatory reserve system and repealing Instruction No. 002-DOM/23 of April 26, 20232024Instruction No. 002-DOM/23 of April 26, 2023 amending certain provisions of Instruction No. 009-DOM/19 of October 25, 2019 on the mandatory reserve system and repealing Instruction No. 004-DOM/21 of November 2, 20212023Instruction No. 009-DOM/20 of November 25, 2020, amending certain provisions of Instruction No. 009-DOM/19 of October 25, 2019, relating to the mandatory reserve system2020Instruction No. 006-DOM/19 on Money Market Instruments2019
Timeline
Amended 2 times · last 2026-07-01
Source: Banky Foiben'i Madagasikara — original document · Summary generated with machine assistance and reviewed before publication; the authoritative text is the regulator's original document. How RegAlert works
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