Instruction No. 13/2020 of July 17 on the Functioning of the Credit Risk Information Center

INSTRUCTION NO. 13/2020 of July 17
SUBJECT: FINANCIAL SYSTEM

• Functioning of the Credit Risk Information Center (CIRC)

Considering the need to promote improvements in the functioning of the Credit Risk Information Center (CIRC), and following the publication of Notice No. 04/2020, dated February 28, regarding the Credit Risk Information Center; In accordance with Article 81 of Law No. 12/15, dated June 17 – Financial Institutions Framework Act, and using the competence conferred by Article 51 of Law No. 16/10, dated July 15 – National Bank of Angola Act;

DETERMINES:

1. Subject Matter
   This Instruction establishes the procedures regarding the functioning of the Credit Risk Center.

2. Scope
   This Instruction applies to all Financial Institutions specified in Article 2 of Notice No. 04/2020, dated February 28, regarding the Credit Risk Information Center.

3. Definitions
   For the purposes of this Instruction, the following terms are understood as:
   a) Surety (Avalista): an individual or legal entity that assumes the formal commitment to pay the outstanding amount, should the debtor fail to make any payment under the guaranteed credit. b) Client: an individual or legal entity that:
   i. Has assumed, vis-à-vis the Institution, as a borrower, an actual or potential credit liability;
   ii. Issues checks on an account domiciled at the Institution.
   c) Guarantor (Garante): an individual or legal entity that provides security or surety regarding the fulfillment of an obligation to be performed by the client. d) Level of Responsibility: identifies the capacity in which an individual or legal entity participated in an operation, namely as borrower, surety, or guarantor. e) Credit Liability: the sum of actual and potential liability, as applicable. f) Actual Liability: liability represented by disbursed credit registered in the Institution's balance sheet. g) Potential Liability: liability registered in an off-balance-sheet item representing situations where the contracted amounts, which represent irrevocable commitments by the Institution (including unused credit lines and issued guarantees, including documentary credits), have not yet been utilized.

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4. Information to be Communicated to the National Bank of Angola
4.1. Each Institution is obliged to communicate to the National Bank of Angola, regarding its activity and that of its foreign branches, the following:
a) The values and information defined in number 5, regarding actual or potential liabilities of its clients from the private sector and public business sector, as well as their respective sureties and guarantors, where applicable, with reference to the last day of each month. b) Information on check issuers whose checks are presented without sufficient funds for the second time.

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4.2. The value of liabilities to be communicated to the National Bank of Angola is expressed in Kwanzas with two decimal places, and liabilities in foreign currency must be converted to national currency at the end-of-day exchange rate published on the National Bank of Angola's institutional portal.
4.3. Institutions are responsible for providing correct, timely, and reliable information to the CIRC, and must therefore have an adequate internal control system aligned with the requirements set forth in Notice No. 02/2013, dated April 19, on Internal Control Systems.
4.4. Institutions must, prior to reporting monthly information to the CIRC, ensure its reconciliation with the monthly information contained in the balance sheets sent to the National Bank of Angola, as provided for in Instructions Nos. 14/2019 and 15/2019, respectively.

5. Characterization of Information to be Communicated in Credit Operations
   5.1. Institutions must communicate information on borrowers, sureties, or guarantors that enables their unambiguous identification, namely:
   Individuals / Legal Entities
   Full Name / Corporate Name
   Tax Identification Number (NIF) / Tax Identification Number (NIF) Date of Birth / Date of Incorporation Gender / Economic Activity Code (CAE); Nationality / Institutional Sector Level of Responsibility / Level of Responsibility

5.2. Institutions must also submit information on each operation referred to in the Tables in Annex I, which forms an integral part of this Instruction, namely:
a) Table 1 – Characterization of an Individual; b) Table 2 – Contract/Operation; c) Table 3 – Guarantees, in the case of credit operations with associated real guarantees.
5.3. The technical specifications for completing the Tables are defined in specific regulations.

6. Characterization of Information to be Communicated about Checks
   6.1. Institutions must communicate information on clients issuing checks presented without sufficient funds for the second time, enabling their unambiguous identification, namely:
   Individuals / Legal Entities
   Name / Corporate Name
   NIF / NIF
   Date of Birth / Date of Incorporation
   Nationality

6.2. Institutions must associate, for each check, the following characterization elements:
a) Optical Line: characterizes the unambiguous identification of the check; b) Value: characterizes the value associated with the check; and c) Return Date: indicates the date of return of the check, corresponding to its second presentation.

7. Form of Communication with the National Bank of Angola
   7.1. Communications and information requests sent by Institutions to the National Bank of Angola are made exclusively through the electronic communication system provided.
   7.2. In contingency situations, the National Bank of Angola may authorize the Institution to upload information at the Bank's premises in Luanda, using an adequate electronic medium.

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8. Deadlines for Communicating Information to the National Bank of Angola
8.1. Monthly communications regarding credit liabilities must be sent to the National Bank of Angola by the eighth day of each month.
8.2. Information on checks returned for the second time due to lack of sufficient funds must be communicated to the National Bank of Angola by 10:00 a.m. on the day following the return.

9. Provision of Information by the National Bank of Angola
   9.1. The National Bank of Angola provides, monthly, to each Institution, information on the global balance sheet liabilities in the financial system of borrowers, sureties, and guarantors with liabilities at the Institution.
   9.2. In addition to providing the information specified in the preceding subsection, Institutions are afforded the possibility of online consultation of potential clients, sureties, and guarantors provided they have received, where applicable, the following:
   a) A request for credit grant or issuance of a guarantee; b) A confirmation by sureties or guarantors of their availability to assume that liability; c) An authorization to perform such consultation.
   9.3. Access to CIRC information via online consultation will be available 24 hours a day, 7 days a week.

10. Information Obligation to Potential Clients, Guarantors or Sureties
    10.1. Institutions must, when requesting information from a credit applicant/guarantee issuer (surety or guarantor), inform them of the consultation to the CIRC to obtain information on their overall indebtedness in the banking sector and any default situations.
    10.2. Institutions must, before concluding the credit contract, inform the borrower, sureties, and guarantors, where applicable, of their obligation to report monthly to the CIRC information regarding the credit, its guarantees, and sureties.
    10.3. The provision of the information referred to in the preceding subsection may be made through a specific clause in the credit contract itself or in an attached document, and the Institution must ensure evidence of its communication.
    10.4. In case of refusal to grant credit/issue a guarantee based on information obtained through the CIRC, the Institution must notify the client in writing, informing them of at least the following elements:
    a) The CIRC information that influenced the decision; b) Their right to obtain a free copy of the information provided by the CIRC regarding them; and c) Their right to contest such information, as provided for in number 12 of this Instruction.

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11. Access by Borrowers, Guarantors and Sureties to Their Information
11.1. Borrowers, sureties, and guarantors have the right to know what information about them is held in the CIRC, and must, whenever they wish, request this information from any Institution where they are borrowers, sureties, or guarantors.
11.2. When they verify the existence of inaccuracies in the information registered in the CIRC regarding them, they must request its correction, in writing, from the Institution responsible for the incorrect registration.

12. Claims Processing
    12.1. In the event of a claim by a borrower, surety, or guarantor due to inaccuracies detected by them, the Institution registering the contested information must, within 2 (two) business days, communicate to the National Bank of Angola that the situation is under analysis.
    12.2. Upon receipt of the communication referred to in the preceding subsection, the CIRC must, within 5 (five) business days, attach a note to the credit report, communicating that the said information is under analysis.
    12.3. The note referred to in the preceding subsection must remain in the CIRC database until the situation is resolved.
    12.4. The Institution must, within 10 (ten) business days from receiving the claim referred to in subsection 12.1, carry out all necessary investigations and send, both to the claimant and to the CIRC, a note containing the investigation results and whether the contested information should be corrected or not.
    12.5. If a correction is warranted, it must be made in the history, with retroactive effect where applicable.
    12.6. In the absence of justification by the Institution within the period referred to in subsection 12.4, or if there is no agreement between the claimant and the Institution, the latter must communicate the facts in writing to the CIRC, requesting its intervention to resolve the situation.

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13. Correction of Information in the CIRC
Whenever an Institution verifies that any past or present liability was omitted or communicated incorrectly, it is obliged to correct it, sending for this purpose the monthly information of previous months during which the error existed, to the CIRC.

14. Historical Register and Archiving
    14.1. The monthly data on credit liabilities of borrowers, sureties, and guarantors communicated under this Instruction must be archived by Institutions and the CIRC for a minimum period of 10 (ten) years.
    14.2. The proof of existence of the credit grant request or authorization that confers legitimacy to perform consultations on CIRC information must be kept by Institutions, in any digital medium, for a minimum period of 10 (ten) years.

15. Institution Officials Responsible for Reporting to the CIRC
    15.1. Institutions must designate employees responsible for interacting with the National Bank of Angola regarding information provision under this Instruction.
    15.2. Changes to the designated officials must be communicated immediately to the National Bank of Angola.
    15.3. The National Bank of Angola will inform Institutions of its interlocutors regarding information provision to the CIRC.

16. Sanctions
    Non-compliance with the provisions established in this Instruction constitutes an administrative offense punishable under Law No. 12/15, dated June 17, Financial Institutions Framework Act.

17. Repeal
    Instruction No. 05/2010, dated October 4, regarding the operating rules of the CIRC, is hereby repealed.

18. Interpretation of Doubts and Omissions
    Doubts and omissions resulting from the interpretation and application of this Instruction are resolved by the National Bank of Angola.

19. Transitional Provision
    Institutions must comply with the provisions of this Instruction within 12 (twelve) months after its publication date, during which period the current regulations remain in force.

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20. Entry into Force
This Instruction enters into force on the day following its publication.

PUBLISHED.
Luanda, July 17, 2020.
THE GOVERNOR
JOSÉ DE LIMA MASSANO

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ANNEX
Variable Tables
Table 1 – Characterization of an Individual
Document Type / Country / Parent Company / Personal Identification Number / SME Classification / Individual Type / Total Assets / Parent Company TIN / Net Revenues / Economic Group / Profession / Corporate Status

Table 2 – Contract/Operation Variables
Unique Internal Code of Credit Operation / Individual Impairment Value / Subsidy or Protocol / Segment of Impairment / Credit Operation / Final Impairment / Spread / Segment Description / Occurrence Indicator of Substitution of Impairment Value / Effective Annual Rate (TAEG) / Operation Instrument / Impairment Analysis Type / Effective Total Rate (TAE) / Credit Currency / 12-Month PD / Renegotiation Date / Operation Start Date / PD until Maturity / Negotiation Type / Operation End Date / Behavioral Maturity / Capital Amount with Judicial Litigation / Effective and Regular Capital / Given Default Loss (LGD) / Abated Capital Amount with Judicial Litigation / Liquidated Capital Amount / Contracted Amount / Exposure at Risk / Interest Amount with Judicial Litigation / Effective and Regular Interest / Real Estate Exposure Ratio (LTV) / Abated Interest Amount with Judicial Litigation / Liquidated Interest Amount / Vencido Capital Value / Financial Collateral Value / Abated Interest to Asset / Macro Scenario Stage / Remaining Capital Grace Period / Macroeconomic Scenario Description / Abated Capital to Asset / Original Internal Rating/Scoring / Macroeconomic Scenario Weight / Actual Internal Rating/Scoring / Average PD / Abated Interest to Asset / Increase in Capital / Average LGD / Potential Capital / Related Party / Medium Real Estate Exposure Ratio (LTV) / Classification of Off-Balance Sheet Items / Politically Exposed Person / Unique Internal Code of Restructured Operation / Credit Line Conditional Indicator / High Risk Customer / Residual Value / Eligible Asset / Code of Restructured Operation / Original Interest Rate / Project Description / Contractual Alteration Type / Actual Interest Rate / Project Province / Liquidation of Vencido Amounts / Calculation Base for Interest / Project Municipality / Restructuring Count / Effective Interest Rate / Macro Sector of Project / Commissions / Amortization Type / Interest Rate Type / Guarantee Reinforcement / Payment Frequency of Interest / Disbursed Amount / Restructuring Date / First Capital Payment Date / Debt in Amount / Status at Restructuring Date / First Interest Payment Date / Issuance of Opinion Date / Second Restructuring / Monthly Installment Amount / Number of Expatriate Workers / Quotation / Capital Amortization Rate / Number of National Workers / Credit Account / Credit Purpose / Original Maturity Date / Impairment Status / Entry into Vencido Date / Capital Payment Frequency / Time in Impairment Status / Country of Operation Grant / Capital Repayment Plan / Credit Stage / Province of Credit Grant / Total Cost (%)

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Table 3 – Guarantees
Internal Operation Code / Sale Date / Internal Guarantee Code / Net Sale Amount / Currency / Recovery Cost / Original Collateral Value / Sale Cost / Initial Collateral Assessment Date / Counterparty Guarantee Code / Collateral Assessment Type / Counterparty TIN / Appraiser Identification / Assigned Haircut / Last Assessment Value / Estimated Time to Recovery / Last Assessment Date / Estimated Time to Sale / Guarantee Type / Entity Responsible for Guarantee / Mortgage Value / Final Maturity Date of Guarantee / Allocated Collateral Value to Contract / Number of Mortgages / Country / Municipality / Province / Guarantor / Guarantee Execution Amount / Guarantee Execution Identifier

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