Notice No. 008/GBM/98 of November 3 - Regulation of the Law on the Promotion of Check Usage

Regulation of the Law on the Promotion of Check Usage

Law No. 5/98 of June 15 prescribes the application of restrictive measures to the use of checks, imposing on banks the obligation to terminate check agreements maintained with clients who reveal improper use thereof.

This law provides for the fixing, by the Bank of Mozambique, of the time limit and form of communications to be made by banks, of the norms deemed necessary for the proper execution of the rules of restriction on check usage, also advocating the establishment of rules for the application of fines to the transgressions provided for therein and the establishment of norms on the opening and maintenance of bank accounts.

On the other hand, the same law prescribes the need for the Bank of Mozambique to fix the formalities to be observed in microfilming operations, as well as the security conditions to be observed in the destruction of checks.

Thus, under the powers conferred upon it by Article 2, Article 7, Article 13, Article 14, and Article 15 of Law No. 5/98 of June 15, and also by Article 94 of Law No. 28/91 of December 31, the Bank of Mozambique determines:

CHAPTER I
ON CHECK ACCOUNTS AND RESTRICTIONS ON CHECK USAGE
Section I
On Check Accounts

Article 1
(Opening of deposit accounts movable by means of check)

When opening a deposit account movable by means of check, it is mandatory to fill out an opening form, which must contain the following elements:

1. Individual Accounts:
   a) Full name, as it appears on the identity card or equivalent document; b) Address; c) Profession; d) Entity where service is rendered (if applicable); e) Parentage; f) Place of birth and nationality; g) Date of birth; h) Number and date of the identity card, or equivalent document, and issuing entity; i) Indication that the elements referred to in letters a), e), f), and h) were verified by displaying the respective identity card or equivalent document.

2. Companies and Other Legal Entities:
   a) Trade name or denomination, as it appears in the register or deed of incorporation; b) Headquarters; d) Main object; e) Names of persons who have powers to move the account, with the requirements of No. 1 of this article being applicable to them.

3. Entities without legal personality.

3.1. Companies and other legal entities in formation:
a) Name and complete identification of the persons responsible for the company or other legal entity to be formed, with the requirements of No. 1 of this article being applicable to them; b) Express indication that the persons indicated in letter a) are jointly liable for everything regarding the opened account; c) Declaration of commitment to deliver the deed of incorporation and the registration with the competent authority within 180 days, under penalty of account closure. d) The entities mentioned above may only sign a check agreement after complying with the requirements indicated in the previous letter.

3.2. Projects:
a) Names of persons who have powers to move the account, with the requirements of No. 1 of this article being applicable to them; b) Authorization and approval by the competent supervisory authority; c) Express indication of the persons or entities that assume responsibility for debts and losses resulting from the use of the account.

3.3. Departments of Institutions:
a) Names of persons who have powers to move the account, with the requirements of No. 1 of this article being applicable to them. b) Indication of the legal entity where the Department is integrated, with delivery of the deed or diploma of its constitution and, when possible, a copy of its organic statute or other document attesting to the existence of the Department in the structure of the legal entity;

c) Authorization and approval by the competent body of the legal entity of which the department is part.

3.4. Special Commissions:
a) Names of persons who have powers to move the account, with the requirements of No. 1 of this article being applicable to them. b) Express indication that the persons indicated in the previous letter are jointly liable for everything regarding the opened account; c) Approval, when possible, by the supervisory entity, if applicable, or by holders of accounts considered reputable by the bank.

Article 2
(Other elements that must appear on the opening form)

1. In addition to the elements required in Article 1, the opening form shall contain:
   a) Account type; b) Signature of the holder or his/her representative(s), if applicable, as well as the conditions for moving the account; c) Order from the branch manager authorizing the opening of the account; d) Warning that the holder's name may be included in the listing of check users who pose a risk, in case of improper use of the check; e) Authorization for the bank, when applicable, to invalidate microfilmed checks that have been cleared and not claimed within the time limit provided by law; f) Warning to the client that they must communicate any change of address or telephone number to the bank and the consequences of omitting this duty.

2. The account opening form must also indicate whether the account holder is a resident or not under the terms of Article 4 of Law 3/96 of January 4.

Article 3
(Admissibility of other documents in addition to the ID)

Without prejudice to the provisions of letter c) of No. 1 of Article 5, in cases where the identity card or equivalent document cannot be presented, other means of identification considered appropriate by credit institutions may be used.

Section II
Restrictions on Check Usage

Article 4
(Check agreement and supply of check books or forms)

1. The supply of the first book or booklet of check forms is always preceded by a check agreement and must only be made to the holder, after confirmation by the bank of all elements contained in the opening form.

2. The supply of any check forms or books is carried out by means of a check agreement, in which it is expressly declared that the client is obliged to return it as soon as the drawee bank requests it, namely in cases of improper use, it being further declared in the same check agreement that all elements contained in the opening form are confirmed.

3. Before the supply referred to in number 1, the account must be moved by means of loose checks, certified or not, depending on whether they are intended for payments or cash withdrawals.

Article 5
(Prohibition of supply of check books or forms)

1. Banks cannot entrust check books or booklets of check forms to entities:
   a) That are included in the listing of check users who pose a risk, prepared and disseminated by the Bank of Mozambique; b) That are judicially prohibited from using checks, as soon as they are informed of such fact under the terms of number 8 of Article 12 of Law No. 5/98 of June 15; c) Whose signature card does not contain the indication referred to in letter i) of No. 1 of Article 1.

2. The movement of accounts covered by letter a) of number 1 of this article can only be done by loose check, certified or not, depending on whether it is intended for payments to third parties or cash withdrawals;

Article 6
(Termination of the check agreement)

1. Banks must terminate the check agreement they maintain with bank account holders, through which they move them via check, whenever the situations described in Article 1 and number 3 of Article 3 of Law No. 5/98 of June 15 occur.

2. A check is only considered regularized if one of the following situations is verified:
   a) The check is re-presented within 10 days and is paid; b) The issuer of the check provides proof that they paid the bearer the respective amount; c) The issuer of the check funded their account with the necessary funds, allocating these funds for 30 days for the payment of that check.

3. For the purposes of No. 3 of Article 1 of Law No. 5/98 of June 15, those who participate in the issuance of a check are the co-holders of the withdrawal and the account holders, including companies and other legal entities, as well as entities without legal personality admitted by law to maintain a deposit account.

4. For the purposes of Article 1 of Law No. 5/98 of June 15, the date of presentation for payment is considered the determinant for verifying the existence or non-existence of funds, if that date falls within the legal time limit.

5. For the purposes of the previous number, checks issued with a date subsequent to the presentation date are presumed to have been issued on the day of presentation.

Article 7
(Notices and communications)

The notices and communications provided for in Law No. 5/98 of June 15 must be made:
a) By the end of the 2nd business day after the return of the check in question, when its payment was refused due to lack or insufficiency of funds; b) By the end of the 5th business day after the 10-day period provided for in number 2 of Article 1 of Law 5/98 of June 15, the notice to all entities covered by the termination of the check agreement; c) By the end of the 5th business day after the presentation of the check in question, the communication to the Bank of Mozambique, of the issuance of checks drawn on it, on a date subsequent to the notification referred to in No. 4 of Article 1 of Law 5/98 of June 15; d) By the end of the 2nd business day after the communication by the Bank of Mozambique of the listing of users who pose a risk, the notice to all covered entities, of the termination of the check agreement with them.

Article 8
(Listing of risky users)

1. Entities that have been subject to two consecutive terminations of the check agreement, even in different drawee banks, or that have violated the prohibition of No. 4 of Article 1, or No. 2 of Article 4, both of Law 5/98 of June 15, are included in a listing of users who pose a risk, to be communicated by the Bank of Mozambique to the entire national banking system.

2. Along with the information referred to in the previous number, the Bank of Mozambique will inform banks about the persons covered by letter a) of number 1 and by number 8 of Article 12 of Law No. 5/98 of June 15.

Article 9
(Communications to the Bank of Mozambique)

1. Communications to the Bank of Mozambique must be sent to the Emission and Treasury Department (DET), on a specific form according to Annexes I, II, and III, which are an integral part of this Notice.

2. These communications will consist of the Register of Issuers of Checks without Provision, created by Notice No. 23/GGBM/97 of December 23, 1997.

Article 10
(Causes for refusal of payment)

The refusal of payment of checks by the drawee bank must be based on one of the following reasons:
a) Insufficiency of funds; b) Discrepancy and/or insufficiency in the issuer's signature; c) Written order from the issuer duly justified; d) Account closed; e) Absence or irregularity in the clearing stamp; f) Improper clearing; g) Frozen account; h) More than six months have elapsed since the end of the presentation time limit for payment.

Article 11
(Obligations of the drawee bank in case of refusal of payment)

When refusing payment of a check, the drawee bank must:
a) Register on the back of the check, in a dated and signed declaration by an authorized employee, the time of presentation, the reason for return, and the existence or non-existence of sufficient funds; b) If the check is returned due to insufficient funds, note the occurrence on the back of the proposal form.

CHAPTER II
ON FINES

Article 12
(Transgressions by Banks)

Without prejudice to other sanctions applicable under the legislation in force, the transgressions provided for in number 1 of Article 14 of Law No. 5/98 of June 15 will be punished with the following fines:
a) From 5,000,000.00 Meticais to 20,000,000.00 Meticais for transgressions provided for in letters b) and d); b) From 20,000,000.00 Meticais to 50,000,000.00 Meticais for transgressions provided for in letters a) and c); c) From 50,000,000.00 Meticais to 60,000,000.00 Meticais for the transgression provided for in letter e).

Article 13
(Violation of the prohibition of notice of non-acceptance of check)

The transgression provided for in No. 2 of Article 14 of Law No. 5/98 of June 15 will be subject to the following fines:
a) Up to 1,000,000.00 Meticais on the first occurrence; b) From 1,000,000.00 Meticais to 2,500,000.00 Meticais on subsequent occurrences.

CHAPTER III
ON MICROFILMING AND INVALIDATION OF CHECKS

Article 14
(Responsibility and custody)

1. Microfilming will be executed under the responsibility of the bank representative to whom it relates, whose identity must be communicated by credit institutions to the Bank of Mozambique.

2. Checks will be microfilmed in two copies, which will be kept in different locations.

Article 15
(Terms of opening and closing)

1. The films cannot be cut or amended and must reproduce opening and closing terms.

2. The closing term must contain the declaration that the images contained therein are total reproductions of the originals and must contain the initials of the employees who intervened in the microfilming operations and the signature of the person in charge or the archivist in charge of directing the work.

3. The microfilming of the closing term will be authenticated with the appropriate white seal.

Article 16
(Invalidation of checks)

The invalidation of checks will be done in a way that makes their reconstruction impossible.

CHAPTER IV
FINAL PROVISIONS

Article 17
(Clarification of doubts)

Doubts that arise in the interpretation and application of the provisions of this Notice and its annexes will be resolved by the Emission and Treasury Department of the Bank of Mozambique.

Article 18
(Entry into force)

This Notice enters into force on the date of entry into force of Law No. 5/98 of June 15.

Maputo, November 3, 1998

The Governor
Adriano Afonso Maleiane

ANNEX I
EVENT FORM

CRED. INST. CODE COUNTER CODE COMMUNICATION NO.
RESTRICTION ON CHECK USAGE
CHECK USER NAME
DATE OF BIRTH
PARENTAGE _________________________________________________________________ _________________________________________________________________ DOC IDENTIFICATION COUNTRY USE TYPE NO. EVENT TYPE DATE //__ _______________________ Stamp and signature
..............x.................

CRED. INST. CODE COUNTER CODE COMMUNICATION NO.
RESTRICTION ON CHECK USAGE
CHECK USER NAME
DATE OF BIRTH
PARENTAGE _________________________________________________________________ _________________________________________________________________ DOC IDENTIFICATION COUNTRY USE TYPE NO. EVENT TYPE DATE //__ _______________________ Stamp and signature

ANNEX II
FILLING OUT THE EVENT FORM

FIELD 01 – CRED. INST. CODE – Credit Institution Code FIELD 02 – COUNTER CODE – Counter Code FIELD 03 – COMMUNICATION NO. – Sequential and unique number for each communication of the CI. FIELD 04 – CHECK USER NAME – Name of the account holder as it appears on the ID document. FIELD 05 - DATE OF BIRTH – Date of birth of the holder, in the format yyyymmdd. FIELD 06 – PARENTAGE – Father's and mother's names. FIELD 07 – COUNTRY – Three-letter alphabetic ISO code indicating the country of issuance of the identification document. FIELD 08 – ID DOC. TYPE FIELD 09 – NO. – Identification document number, aligned to the left when smaller than the maximum size, and if it has alphabetic or other characters, these must also be considered. FIELD 10 – EVENT TYPE – Three-digit numeric code indicating the type of event that gave rise to the communication. FIELD 11 – DATE – Date on which the event occurred, in the format yyyymmdd.

ANNEX III
TABLE A
Document Types

1. Identity Card (civil)
   a) Maputo Identification File .............. 101
   b) Xai-Xai Identification File ............. 102
   c) Inhambane Identification File ........... 103
   d) Beira Identification File ............... 104
   e) Chimoio Identification File ............. 105
   f) Tete Identification File ................ 106
   g) Quelimane Identification File ........... 107
   h) Nampula Identification File ............. 108
   i) Pemba Identification File .............. 109
   j) Lichinga Identification File ............ 110
2. Foreign Citizen Identity Card ...... 201
3. Eq. Doc. Identity Card (foreign) .... 301
4. Passport ......................................... 401
5. Other identification documents ................. 501

TABLE B
Event Types
Event to be communicated to the Bank of Mozambique

1. Termination due to misuse ...................... 001
2. Signing of new check contract ................ 002
3. Use of checks after notification ................003