Notice No. 14/GGBM/95 of 29 December - Mandatory Reserves

BANCO DE MOÇAMBIQUE

NOTICE No. 14/GGBM/95 SUBJECT: MANDATORY RESERVES

The current stage of reform of the Mozambican financial sector requires the updating of the provisions contained in Service Orders No. 19/90 of 8 December and No. 1/92 of 27 January, in order to integrate all institutions subject to the supervision of the Bank, as well as to adjust the level of the Mandatory Reserve rate to the current liquidity situation of the economy.

In these terms and under the provisions of paragraphs 1 and 2 of Article 27 of Law No. 1/92 - Organic Law of the Bank of Mozambique - of 3 January, I determine:

Article 1 Scope of Application

1. This Notice applies to all Credit Institutions covered by Law No. 28/91 of 31 December - Law of Credit Institutions - holding liabilities referred to in the following article.

2. Excluded from the provisions of the previous paragraph are Credit Cooperatives (Montepios) or Mutual Aid Associations, Mutual Funds, and Savings Banks.

Article 2 Liabilities Subject to Levy

1. The liabilities subject to the constitution of the Mandatory Reserve are as follows: a) Demand deposits, in National Currency; b) Deposits with prior notice, in National Currency; c) Time deposits equal to or less than 1 year, in National Currency; d) Demand deposits, in Foreign Currency, of Residents; e) Time deposits equal to or less than 1 year, in Foreign Currency, of Residents.

2. The provisions of paragraph 1 of this article do not apply to State Deposits and those of other Credit Institutions provided for in Article 1.

Article 3 Levy Rate

The Mandatory Reserve rate is 15%, applied to the liabilities mentioned in paragraph 1 of Article 2 of this Notice.

Article 4 Calculation of Value

1. The amount of the mandatory reserve will be calculated based on the average balance of the last three months of the aggregates referred to in paragraph 1 of Article 2 of this Notice, observing the following procedures: a) If the obtained value is greater than the available balance, the institution will be debited by the amount equal to the difference, within a period of five days, from which the penalty period will begin. b) If the obtained value is less than the available balance, the Bank of Mozambique will release the amount equal to the difference, within a period of five days.

2. The Mandatory Reserve will be constituted in National Currency.

Article 5 Submission of Information

1. Credit Institutions must send monthly balance sheets to the Bank of Mozambique within the existing deadlines, accompanied by the attached Mandatory Reserve calculation sheet, by the 15th of each month, reported to the previous month.

2. If Credit Institutions do not send the information referred to in the previous paragraph, the Bank of Mozambique will calculate the reserve based on extrapolation and inform the institutions of the reserve status, applying the provisions of Article 4 of this Notice.

Article 6 Method of Constitution

The Mandatory Reserve may be constituted in the following modalities: a) Cash; b) Checks drawn by the institutions themselves on other national credit institutions; c) Account Transfer; d) Other financial assets capable of integrating the clearing system.

Article 7 Penalties

1. Credit Institutions that do not observe the deadlines for the constitution of the Mandatory Reserve are subject to a monetary penalty.

2. The value of the penalty referred to in the previous point will be calculated on the Mandatory Reserve Deficit at the Bank of Mozambique's rediscount rate plus 2 percentage points, for the period of delay.

Article 8 Validity

For the purposes indicated in Article 4 of this Notice, these provisions take effect from 1 January 1996.

Article 9 Revocation

Service Orders No. 19/90 of 8 December and No. 1/92 of 27 January are revoked.

Article 10 Clarification of Doubts

Doubts that arise in the interpretation and implementation of this Notice must be submitted to the Credit Operations Department of the Bank of Mozambique.

Maputo, 29 December 1995

Governor of the Bank of Mozambique Adriano Afonso Maleiane

MANDATORY DEPOSITS CALCULATION SHEET

INSTITUTION NAME: MONTH OF:

DESIGNATION | BALANCE OF THE LAST THREE MONTHS (1, 2, 3, 4, 5, 6, 7) | TOTAL AVERAGE BALANCE OF THE PERIOD | MANDATORY DEPOSIT

A) LIABILITIES IN NC • Demand Deposit • Time Deposit inferior or equal to 1 year • Deposit with Prior Notice

B) LIABILITIES IN FC • Demand Deposits of Residents • Time Deposits inferior or equal to 1 year of Residents

TOTAL DEPOSITS: 0

C) MANDATORY DEPOSITS C1 – OF THE CURRENT PERIOD • Mandatory Deposit = 15% x Average Balance • Penalty = tP x Mandatory Reserve Deficit

SUM: 0 TOTAL OF C1: 0

C2 – OF THE PREVIOUS PERIOD: 0

D) AMOUNT TO DEPOSIT OR RELEASE: 0

SMP = AVERAGE BALANCE OF THE PERIOD

DATE: Maputo, 28/12/1995 SIGNATURE OF THE BANK RESPONSIBLE PERSON

S.E.O.