Instruction No. 17/2019 of October 24

INSTRUCTION NO. 17/2019
October 24
SUBJECT: MONETARY POLICY
− Mandatory Reserves

Considering the need to update existing rules for calculating and fulfilling mandatory reserves in line with the current macroeconomic stability framework, aiming for greater efficiency of monetary policy instruments; Exercising the powers conferred by Article 51 of Law No. 16/10, dated July 15, the National Bank of Angola Law; I HEREBY DETERMINE:

1. Banking Financial Institutions established in the country must maintain mandatory reserves under this Instruction.
2. The tax base for mandatory reserves, in national currency, consists of amounts recorded according to auxiliary tables (1, 2, 4, 6, 7, 8 and 9) in the following accounts of the Chart of Accounts for Financial Institutions (ADJUSTED CHART OF ACCOUNTS / CONTIF ADJ.):

• 2.10.10. Demand Deposits;
• 2.10.20. Time Deposits;
• 2.10.80. Other Deposits;
• 2.10.90. Other Loans;
• 2.20.20. Sale of Own Securities with Repurchase Agreement;

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• 2.20.30. Sale of Third-Party Securities with Repurchase Agreement;
• 2.30.10. Issued or Endorsed Securities and Financial Instruments;
• 2.50.20.10. Obligations from Pending Settlement Operations; and
• 2.50.20.30. Obligations from Tax Collection Services.

3. The tax base for mandatory reserves, in foreign currency, consists of amounts recorded according to auxiliary tables (1, 2, 4, 6, 7, 8 and 9) in the following accounts of the Chart of Accounts for Financial Institutions (ADJUSTED CHART OF ACCOUNTS / CONTIF ADJ.):

• 2.10.10. Demand Deposits;
• 2.10.20. Time Deposits;
• 2.10.80. Other Deposits;
• 2.10.90. Other Loans;
• 2.20.20. Sale of Own Securities with Repurchase Agreement;
• 2.20.30. Sale of Third-Party Securities with Repurchase Agreement;
• 2.30.10. Issued or Endorsed Securities and Financial Instruments;
• 2.50.20.10. Obligations from Pending Settlement Operations;
• 2.50.20.20. Correspondent Relations; and
• 2.50.20.30. Obligations from Tax Collection Services.

4. For the purposes of this Instruction, balances in Bankita accounts (demand and time deposits) in national and foreign currency, along with all monthly interest on the base defined in paragraphs 2 and 3, are not eligible for calculating mandatory reserves.

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5. Assets defined in specific regulations are eligible for fulfilling mandatory reserves in national currency (NC) and foreign currency (FC).
6. The calculation of mandatory reserves and their fulfillment are carried out periodically, on the first business day and from the first to the last business day of the period following the constitution of balances referred to in paragraphs 2 and 3.
7. The base defined in paragraphs 2 and 3 is subject to mandatory reserve coefficients, as established in specific regulations.
8. The requirement for the base in national currency, subject to the reserve coefficient (as established in specific regulations), is calculated periodically based on the arithmetic mean of balances determined in respective accounts on business days during the period, according to the following formula:

• ETn = crn {∑ [Dtn (T –1)]/N}
  Where:
• ETn = requirement for period T in NC, corresponding to the percentage established in specific regulation on the base, excluding Central Government, Local Governments, and Municipal Administrations accounts;
• crn = mandatory reserve coefficient as established in specific regulation;
• T = T-th calendar period in which mandatory reserves are fulfilled, (T=1, 2, 3,...,n);
• T-1 = T-th calendar period in which final daily credit balances are constituted, recorded in the base accounts referred to in paragraph 2, excluding Central Government and Local Governments/Municipal Administrations accounts, (T-1=-n, 1, 2,..., n-1);
• t = business day of the constitution period T-1;
• Dtn (T – 1) = final daily credit balances recorded in the base accounts referred to in paragraph 2, excluding Central Government and Local Governments/Municipal Administrations accounts, reported on the first business day of the fulfillment period; and
• N = number of business days in period T-1.

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9. The requirement for the base in foreign currency (FC), subject to the coefficient (as established in specific regulations), is calculated periodically based on the arithmetic mean of balances determined in respective accounts on business days during the period, according to the following formula:
ETe = cre {∑ [Dte (T –1)]/N}
Where:

• ETe = requirement for period T in FC on the base, as established in specific regulation, excluding Central Government and Local Governments/Municipal Administrations accounts;
• cre = mandatory reserve coefficient as established in specific regulation;
• T = T-th calendar period in which mandatory reserves are calculated, (T=1, 2, 3,..., n);
• T-1 = T-th calendar period in which final daily credit balances are constituted, recorded in the base accounts referred to in paragraph 3, (T-1= -n, 1, 2, ..., n-1);

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• t = business day of the constitution period (T-1);
• Dte (T – 1) = final daily credit balances recorded in the base accounts referred to in paragraph 3, reported on the first business day of the fulfillment period; and
• N = number of business days in period T-1.

10. For the purposes of this Instruction, business days are considered to be the days in the period, excluding Saturdays, Sundays, and national holidays.
11. The amount defined in specific regulation for the arithmetic mean of final daily balances, determined in account 1.10.10 National Currency Cash of the Chart of Accounts for Financial Institutions (ADJUSTED CHART OF ACCOUNTS / CONTIF ADJ.), during the constitution period, may be deducted from the requirement in NC calculated under paragraph 2, excluding Central Government and Local Governments/Municipal Administrations accounts. For this purpose, returned checks by the clearing service are not to be included.
12. Credit rights, as per specific regulation, may also be deducted from the requirement in NC calculated under paragraph 2.
13. The amount for deducting mandatory reserves, referred to in the previous paragraph, is determined based on the position of the last day of the credit portfolio constitution period, granted by the Banking Financial Institution and recorded in the Supervision System of Financial Institutions of the National Bank of Angola (SSIF).
14. The effective reserve value to be considered for fulfilling the requirement in NC is equal to the sum of daily balances of Central Government, Local Governments, and Municipal Administrations accounts and the amount referred to in paragraph 2, weighted according to coefficients established in specific regulation, minus the amounts set in paragraphs 11 and 12, according to the following formula:

• ROdn = ∑[GCdn+ (GLdn) + ETn – DCTn(T-1) - NMn(T-1)]
  Where:
• ROdn = effective mandatory reserves in NC to be considered for fulfilling the requirement on day d;
• GCdn = daily balances of Central Government accounts in NC on day d, weighted according to specific regulation;
• GLdn = daily balances of Local Governments and Municipal Administrations accounts in NC on day d, weighted according to specific regulation;
• ETn = requirement for period T in NC, corresponding to the coefficient established in specific regulation on the base, as referred to in paragraph 8;
• DCTn = value corresponding to credit rights, as per specific regulation;
• NMn (T-1) = amount corresponding to the arithmetic mean of final daily balances of account 1.10.10 National Currency Cash during the constitution period (T-1), weighted according to specific regulation; and
• d = business day of the fulfillment period (T).

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15. The effective reserve value to be considered for fulfilling the requirement in FC is equal to the sum of balances of Central Government, Local Governments, and Municipal Administrations accounts and the amount referred to in paragraph 3, weighted according to coefficients established in specific regulation, according to the following formula:
ROde = ∑[GCde+ GLde+ ETe]

CONTINUATION OF INSTRUCTION NO. 17/2019 Page 7 of 11 Where:

• ROde = effective mandatory reserves in FC to be considered for fulfilling the requirement on day d;
• GCde = daily balances of Central Government accounts in FC on day d, weighted according to specific regulation;
• GLde = daily balances of Local Governments and Municipal Administrations accounts in FC on day d, weighted according to specific regulation;
• ETe = requirement for period T in FC, corresponding to the coefficient established in specific regulation on the base, as referred to in paragraph 9; and
• d = business day of the fulfillment period (T).

16. The submission of data and information regarding the calculation of the requirement, as well as assets for fulfilling it in FC, must be in NC at the average exchange rate published by the National Bank of Angola, according to ADJUSTED CHART OF ACCOUNTS / CONTIF ADJ. provisions for this purpose. Meanwhile, for fulfilling mandatory reserves in FC, the daily average exchange rate published by BNA must be considered.
17. Without prejudice to other measures that may be adopted, the National Bank of Angola must apply a sanction equivalent to 1% (one percent) per month, above the highest prevailing interest rate for active operations in national currency charged by financial institutions during the relevant period, as provided in paragraph 4 of Article 25 of Law No. 16/10, dated July 15, National Bank of Angola Law, on the daily shortfall of mandatory reserves, both in national and foreign currency. The National Bank of Angola must also apply the same penalty retroactively for situations where Banking Financial Institutions provide inconsistent data and information that would imply non-compliance with mandatory reserves in the respective period.

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18. The collection of charges resulting from the penalties provided in paragraph 17 is carried out by the last business day of the week following the occurrence, via debit from demand deposit accounts in national currency held at the National Bank of Angola, for both NC and FC non-compliances.
19. For FC non-compliances, equivalence will be made through the exchange rate referred to in paragraph 16.
20. If, by the end of the stipulated term, the amount of said penalties is not settled, the National Bank of Angola proceeds with compulsory debit in the reserve account of the respective bank.
21. Banking Financial Institutions must be informed by BNA whenever sanctions provided in paragraph 17 apply.
22. Daily balances of items comprising the base defined in paragraphs 2 and 3, as well as Central Government and Local Governments/Municipal Administrations accounts in NC and FC, must be transmitted daily to the Asset Markets Department (DMA) of the National Bank of Angola via SSIF.
23. Contingency Procedures: in case of SSIF unavailability, Banking Financial Institutions are obliged to alternatively send data via email.
24. The data referred to in the previous paragraph must comply with ADJUSTED CHART OF ACCOUNTS / CONTIF ADJ. guidelines and be accurate, complete, reliable, and verifiable.
25. Banking Financial Institutions are obliged to preserve and present to representatives of the Banking Supervision Department (DSB) of the National Bank of Angola, whenever requested, documents that allow proving the information provided for calculating the requirement.

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26. The term for constituting the base and effective fulfillment is defined in specific regulation.
27. Instruction No. 10/2018, dated July 19, and all regulations contrary to this Instruction are revoked.
28. Doubts regarding the interpretation and application of this Instruction are resolved by the National Bank of Angola.
29. This Instruction enters into force on its publication date.
PUBLISHED.
Luanda, October 24, 2019.
THE GOVERNOR
JOSÉ DE LIMA MASSANO

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ANNEX I

• CALCULATION OF WEEKLY REQUIREMENT IN NATIONAL CURRENCY AND FOREIGN CURRENCY, EXCLUDING CENTRAL AND LOCAL GOVERNMENTS AND MUNICIPAL ADMINISTRATIONS
  BANK : xxxxxxxx
  CONSTITUTION PERIOD: From XX to XX (XX-1)th Week RELATED AUXILIARY TABLES: 1, 2, 4, 6, 7, 8 and 9 (Values in AOA) WEEK NO. XX | WEEK NO. XX | WEEK NO. XX | WEEK NO. XX 5 days | 5 days | 5 days | 5 days
  2.10.10. DEMAND DEPOSITS 0,00
  2.10.20. TIME DEPOSITS 0,00
  2.10.80. OTHER DEPOSITS 0,00
  2.10.90. OTHER LOANS 0,00
  2.20.20. SALE OF OWN SECURITIES WITH REPURCHASE AGREEMENT 0,00
  2.20.30. SALE OF THIRD-PARTY SECURITIES WITH REPURCHASE AGREEMENT 0,00
  2.30.10. ISSUED OR ENDORSED SECURITIES AND FINANCIAL INSTRUMENTS 0,00
  2.50.20.10. OBLIGATIONS FROM PENDING SETTLEMENT OPERATIONS 0,00
  2.50.20.30. OBLIGATIONS FROM TAX COLLECTION SERVICES 0,00
  I - TOTAL OF THE BASE PERIOD 0,00
  II- AVERAGE OF THE BASE PERIOD 0,00
  III- TOTAL REQUIREMENT (according to point 8 of Instruction No. 17/2019, OF OCTOBER 24) 0,00 IV - TOTAL OF THE BALANCE PERIOD FOR ACCOUNT 1.10.10.CASH 0,00 V - AVERAGE OF THE BALANCE PERIOD FOR ACCOUNT 1.10.10.CASH 0,00 VI - WEIGHTED BALANCE OF THE PERIOD FOR ACCOUNT 1.10.10.CASH (ACCORDING TO POINT 11 OF INSTRUCTION NO. 17/2019, OF OCTOBER 24) 0,00 VII - CREDIT RIGHTS (ACCORDING TO POINT 12 OF INSTRUCTION NO. 17/2019, OF OCTOBER 24) 0,00 VIII=(III-VI-VII) EFFECTIVE PERIOD REQUIREMENT (WITHOUT GOVERNMENTS AND MUNICIPAL ADMINISTRATIONS) 0,00
  2.10.10. DEMAND DEPOSITS 0,00
  2.10.20. TIME DEPOSITS 0,00
  2.10.80. OTHER DEPOSITS 0,00
  2.10.90. OTHER LOANS
  2.20.20. SALE OF OWN SECURITIES WITH REPURCHASE AGREEMENT 0,00
  2.20.30. SALE OF THIRD-PARTY SECURITIES WITH REPURCHASE AGREEMENT 0,00
  2.30.10. ISSUED OR ENDORSED SECURITIES AND FINANCIAL INSTRUMENTS 0,00
  2.50.20.10. OBLIGATIONS FROM PENDING SETTLEMENT OPERATIONS 0,00
  2.50.20.20. CORRESPONDENT RELATIONS 0,00
  2.50.20.30. OBLIGATIONS FROM TAX COLLECTION SERVICES 0,00
  I - TOTAL OF THE BASE PERIOD 0,00
  II- AVERAGE OF THE BASE PERIOD 0,00
  III- TOTAL REQUIREMENT (according to point 9 of Instruction No. 17/2019, OF OCTOBER 24) 0,00 IV=(III) EFFECTIVE WEEKLY REQUIREMENT (WITHOUT GOVERNMENTS AND MUNICIPAL ADMINISTRATIONS) 0,00 RESPONSIBLE'S STAMP AND SIGNATURE FULFILLMENT PERIOD: From XX to XX (XX)th Week IN NATIONAL CURRENCY BASE OF INCIDENCE IN FOREIGN CURRENCY

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ANNEX II

• REQUIREMENT ON CENTRAL GOVERNMENT, LOCAL GOVERNMENTS (Provinces) AND MUNICIPAL ADMINISTRATIONS
  BANK : XXXXXXX
  DATE: XX-XX-2019
  RELATED AUXILIARY TABLES: 1, 2, 4, 6, 7, 8 and 9 (Values in AOA) INSTITUTIONAL SECTOR
  2.10.10. Demand Deposits 0,00
  CENTRAL GOVERNMENT IN NC 2.10.20. Time Deposits 0,00 22% 2.10.80. Other Deposits 0,00 2.50.20.10.Obligations from Pending Settlement Operations 0,00 TOTAL REQUIREMENT 0,00
  2.10.10. Demand Deposits 0,00
  LOCAL GOVERNMENTS AND MUNICIPAL ADMINISTRATIONS IN NC 2.10.20. Time Deposits 0,00 22% 2.10.80. Other Deposits 0,00 2.50.20.10.Obligations from Pending Settlement Operations 0,00 TOTAL REQUIREMENT 0,00
  2.10.10. Demand Deposits 0,00
  CENTRAL GOVERNMENT IN FC 2.10.20. Time Deposits 0,00 100% 2.10.80. Other Deposits 0,00 2.50.20.10.Obligations from Pending Settlement Operations 0,00 TOTAL REQUIREMENT 0,00
  2.10.10. Demand Deposits 0,00
  LOCAL GOVERNMENTS AND MUNICIPAL ADMINISTRATIONS IN FC 2.10.20. Time Deposits 0,00 100% 2.50.20.10.Obligations from Pending Settlement Operations 0,00 TOTAL REQUIREMENT 0,00 RESPONSIBLE'S STAMP AND SIGNATURE COEFFICIENT BASIC ACCOUNT AMOUNT