Notice No. 14/GGBM/2005 on Book Designation of the New Family Metical and Conversion Procedures

NOTICE NO. 14/GGBM/2005

SUBJECT: BOOK DESIGNATION OF THE NEW FAMILY METICAL AND CONVERSION PROCEDURES

Given the need to regulate the process of converting the Metical in circulation to that of the new family, the Governor of the Bank of Mozambique, using the powers conferred upon him by Article 5 of Law No. 07/2005 of December 20, determines:

Article 1

(Book Designation)

1. The Metical of the new family, resulting from the conversion referred to in Law No. 07/2005 of December 20, shall henceforth be designated, in book entries, as MTn for the whole part, and CTn for the decimal part.

2. The book designation referred to in this article shall remain in force until December 31, 2006.

Article 2
(Conversion and Rounding)

1. The Metical in circulation (MT) is converted into the Metical of the new family (MTn) by dividing its respective value by 1,000 (one thousand), in accordance with Article 3 of Law No. 07/2005 of December 20.

2. The Metical of the new family (MTn) is subdivided into one hundred centavos, corresponding to two decimal places.

3. For the purposes of the conversion referred to in paragraph 1 of this article, whenever the decimal part resulting from the conversion of the Metical in circulation (MT) to the Metical of the new family (MTn) contains more than two digits, a rounding operation shall take place, affecting the third digit after the comma, as follows:

a) When the third decimal digit of the conversion result is equal to or greater than 5, the rounding is to the next higher centavo;

Example 1: third decimal digit equal to 5:

12,555.00 MT / 1000 = 12.555 MTn = 12.56 MTn;

Example 2: third decimal digit greater than 5:

12,556.00 MT / 1000 = 12.556 MTn = 12.56 MTn.

b) When the third decimal digit of the conversion result is less than 5, the rounding is to the next lower centavo;

Example:

12,554.00 MT / 1000 = 12.554 MTn = 12.55 MTn.

Article 3

(Automatic Nature of Conversion)

1. From July 1, 2006, amounts deposited in Meticais currently in circulation (MT) in any banking institution shall be automatically converted into Metical of the new family (MTn).

2. The institutions referred to in the preceding paragraph must, at the time of conversion, open new folios with the abbreviation MTn to which all balances already converted to the Metical of the new family are transferred.

Article 4
(Effects of Conversion on Banking and Foreign Exchange Operations)

1. From July 1, 2006, all banking operations must be processed and recorded with reference to the Metical of the new family (MTn), for which all banking institutions must adjust their respective computer platforms accordingly.

2. With a view to conferring total transparency and security to the conversion process, all banking institutions must ensure that their clients:

a) From March 31 to December 31, 2006, have balances available simultaneously in Meticais in circulation (MT) and in Meticais of the new family (MTn).

b) From July 1, 2006 to December 31, 2006, have statements available in Meticais of the new family (MTn) and in Meticais in circulation (MT).

3. The provisions in the preceding paragraph do not prejudice banking institutions that are able to do so from making balances and/or account statements available in Meticais in circulation (MT) and Meticais of the new family (MTn) from January 1, 2006.

4. As a result of the principle of dual price indication, entities authorized to conduct foreign exchange business must present their quotes and exchange rate tables with simultaneous reference to the Metical in circulation (MT) and the Metical of the new family (MTn).

Article 5
(Banking Accounting Treatment)

1. With a view to adjusting the accounting records of banking institutions, two accounting periods are established for the year 2006: the first relating to the period from January 1 to June 30, 2006, and the second from July 1 to December 31, 2006.

2. Without prejudice to the dual price indication, in accordance with applicable legislation, the accounting period relating to the period from January 1 to June 30, 2006 must be carried out in Meticais in circulation (MT), and the semi-annual trial balance relating to the said period must present the major totals simultaneously in Meticais in circulation (MT) and in Meticais of the new family (MTn).

3. The accounting period relating to the period from July 1 to December 31, 2006 is opened and carried out exclusively in Meticais of the new family (MTn).

4. The accounting determination relating to the periods referred to in the preceding numbers is made account by account, with the final result presented in a rectified trial balance.

5. Whenever, due to rounding, in accordance with the provisions of Article 2, an unbalanced trial balance results, a special account designated "rounding results account" must be created.

6. In cases where the "rounding results account" shows a positive balance, the same must be integrated into a "various reserves account" to be created for this purpose.

7. In cases where the "rounding results account" shows a negative balance, the same must be integrated into the loss account.

Article 6
(Treatment of Checks and Other Credit Instruments)

1. Checks issued prior to July 1, 2006, expressed in Meticais in circulation (MT), remain valid until December 31, 2006, and the conversion rate established in the Law must be applied at the time of their regularization by banking institutions.

2. Other credit instruments, notably credit letters and drafts, with an issue date prior to July 1, 2006, expressed in Meticais currently in circulation (MT), remain valid for the time period specified therein, and are regularized in banking institutions at the time of their collection in Meticais of the new family (MTn), applying the conversion rate established in the Law.

3. Before July 1, 2006, banking institutions must make new specimens of checks available to their users, with the changes introduced by a specific regulatory act, and deposit slips adjusted to the Metical of the new family (MTn).

Article 7
(Extension of the Regime)

The regime provided for in this Notice regarding banking institutions is applicable, with the necessary adaptations, to other credit institutions and financial companies.

Article 8
(Charges)

The conversion referred to in this Notice must not entail any costs or charges for holders of bank accounts in the national banking system, or possessors of notes, coins, or credit instruments susceptible to being converted.

Article 9
(Entry into Force)

This Notice enters into force on the date of its publication.

Maputo, December 28, 2005.

THE GOVERNOR

(Adriano Afonso Maleiane)