Instruction No. 18/2018 of November 28, 2018: Conversion of Foreign Currency Loans to Individuals

INSTRUCTION NO. 18/2018 of November 28, 2018
SUBJECT: FINANCIAL SYSTEM

• Conversion of Foreign Currency Loans to Individuals

Whereas there has been interest from individual clients and Commercial Banks in converting contracted foreign currency loans to national currency; Whereas it is necessary to strengthen the relationships between said Commercial Banks and their clients, as an indispensable element for the confidence, efficiency, and effectiveness of the Financial System, under Notice No. 11/2014 of December 17 regarding specific requirements for credit operations; In accordance with the combined provisions of items d) and f) of paragraph 1 of Article 21, and paragraph 1 of Article 51, both of Law No. 16/10 of July 15 (Law of the National Bank of Angola), combined with Article 94 of Law No. 12/2015 of June 17 (Basic Law of Financial Institutions). I HEREBY DETERMINE:

1. Object and Scope
   This Instruction establishes the rules that Commercial Banks, hereinafter referred to as Banks, must observe in the processes for converting foreign currency loans granted to national currency.

2. Loan Conversion
   2.1 Banks may convert loans to their individual clients, granted in foreign currency, into national currency.
   2.2 Following consensual negotiation, Banks must proactively inform interested clients of the possibility to convert their contracted foreign currency loans into national currency.
   2.3 In loan conversion operations, Banks must provide interested parties in writing with at least the following information:
   a) The terms and conditions applicable to national currency loans resulting from the conversion; and, b) The principal installment amount, interest rate, and term, respecting the institution's prevailing fee schedule.
   2.4 Regarding loan convertibility, Banks must act fairly and transparently in negotiations with their clients, refraining from performing acts that constitute financial abuses.

CONTINUATION OF INSTRUCTION NO. 18/2018 Page 2 of 4
3. Loan Conversion Process Formulation
3.1 Following the loan conversion agreement, Banks must update the documentation and carry out other procedures necessary to formalize said process.
3.2 Banks that do not have a sufficiently long foreign exchange position to cover the sale of foreign currency for the client's loan must include in their needs statements the amounts required for said conversion, ensuring that the National Bank of Angola provides the foreign currency for this purpose.
3.3 For the purposes of the preceding point, Banks must complete the table attached to this Instruction, which shall be sent in Excel format via email to dma@bna.ao.
3.4 The sale of foreign currency to cover loans declared in the aforementioned table depends on confirmation of their registration in the Credit Information and Risk Center (CIRC).
3.5 Whenever the National Bank of Angola is requested to make foreign currency available, Banks must proceed with loan conversion within 10 (ten) days from the date of availability of said currency.
3.6 Banks are prohibited from charging any commissions related to loan conversion to their individual clients.

CONTINUATION OF INSTRUCTION NO. 18/2018 Page 3 of 4
4. Final and Transitional Provisions
Banks must complete the loan conversion processes for clients within a maximum period of 6 (six) months, counted from the date of publication of this Instruction.
5. Infractions
Non-compliance with the provisions contained in this Instruction constitutes a regulatory offense punishable under Law No. 12/2015 of June 17, Basic Law of Financial Institutions.
6. Doubts and Omissions
Doubts and omissions arising from the interpretation and application of this Instruction are resolved by the National Bank of Angola.
7. Entry into Force
This Instruction enters into force on the date of its publication.
PUBLISHED.
Luanda, November 28, 2018.
THE GOVERNOR
JOSÉ DE LIMA MASSANO

CONTINUATION OF INSTRUCTION NO. 18/2018 Page 4 of 4
ANNEX
INDIVIDUAL CLIENT LOAN INFORMATION
Institution | Financial Year | Loan Process Number | Identity Card | Tax Identification Number | Client Name | Loan Grant Date | Loan Maturity Date | Debt Value | Interest Rate | Currency (USD EUR)