Notice No. 2/GBM/2010: Regulation on the Calculation and Establishment of Mandatory Reserves

Wednesday, 29 September 2010 I SERIES - Number 38 REPUBLIC GAZETTE OFFICIAL PUBLICATION OF THE REPUBLIC OF MOZAMBIQUE SUMMARY Ministry of the Interior:
Ministerial Diploma No. 156/2010:
Grants Mozambican nationality, by reacquisition, to Júlio Filipe da Silva Peres.
Bank of Mozambique:
Notice No. 2/GBM/2010
Approves the Regulation on the Calculation and Establishment of Mandatory Reserves.

MINISTRY OF THE INTERIOR
Ministerial Diploma No. 156/2010 of 29 September

The Minister of the Interior, having verified that the provisions of Article 14 of Decree No. 3/75 of 16 August, combined with Article 16 of Law No. 16/87 of 21 December, have been complied with, and exercising the power granted to him by Article 12 of the Nationality Law, determines:

Mozambican nationality is granted, by reacquisition, to Júlio Filipe da Silva Peres, born on 15 June 1963, in Maputo.

Ministry of the Interior, in Maputo, 12 January 2006. - The Minister of the Interior, José Condugua António Pacheco.

BANK OF MOZAMBIQUE
Notice No. 2/GBM/2010 of 29 September

Taking into account the recent behavior of the exchange rate, short and medium-term inflation forecasts, and recent price containment and budgetary austerity measures, the Bank of Mozambique, under the provisions of paragraphs 1 and 2 of Article 27 of Law No. 1/92 of 3 January, the Organic Law of the Bank, determines:

1. The Regulation on the Calculation and Establishment of Mandatory Reserves is approved, which forms an integral part of this Notice.
2. This Notice takes effect from the reserve establishment period starting on 7 October 2010, revoking Notice No. 1/GBM/2010 of 5 July.
3. Any doubts arising in the interpretation and application of this Notice shall be submitted to the Markets Department of the Bank of Mozambique.

Maputo, 21 September 2010. - The Governor,
Ernesto Gouveia Gove.

Regulation on the Calculation and the Establishment of Mandatory Reserves

CHAPTER I
Scope, Calculation, and Establishment

ARTICLE 1
(Scope of Application)

1. This Regulation applies to all credit institutions covered by Law No. 15/99 of 1 November - Law of Credit Institutions and Financial Companies, with the amendments introduced by Law No. 9/2004 of 21 July, holding liabilities referred to in Article 2 of this Regulation and monetary assets, with the Bank of Mozambique.
2. Excluded from the provisions of the preceding paragraph are credit institutions that do not accept public deposits, in accordance with the provisions of Law No. 15/99 of 1 November, with the amendments introduced by Law No. 9/2004 of 21 July.

ARTICLE 2
(Liabilities Subject to Levy)
The following liabilities constitute the levy base for mandatory reserves, as detailed in the mandatory reserve calculation sheet attached to this Regulation:
a) Resident deposits; b) Non-resident deposits; and c) State deposits.

ARTICLE 3
(Levy Rate)
The levy base referred to in Article 4 of this Regulation is subject to a minimum daily rate, fixed at 8.75%.

ARTICLE 4

1. The levy base upon which the daily rate will apply shall be calculated from the simple arithmetic mean of the balances of the liabilities referred to in Article 2, verified over the calculation period.
2. The calculation periods for the levy base are, each month, as follows:
   1st period - from the 1st to the 15th day;
   2nd period - from the 16th to the last day of each month.

ARTICLE 5
(Establishment Period)

1. The establishment periods for mandatory reserves under this regime are as follows:
   1st period - from the 7th to the 21st day;
   2nd period - from the 22nd to the 6th day of the following month.
2. The mandatory reserve of the 1st establishment period corresponds to the 2nd calculation period and vice-versa.

ARTICLE 6
(Form of Establishment)

1. The mandatory reserve shall always be constituted in the national currency, the Metical.
2. The mandatory reserve may be constituted in at least one of the following forms:
   a) Cash; b) Checks drawn by the institutions themselves on other national credit institutions; c) Account-to-account transfer; d) Other financial assets capable of integrating the clearing system, excluding demand deposits in foreign currency of credit institutions with the Bank of Mozambique; e) Cash in the institution's vault, maintained at agencies and/or counters in rural areas, as defined by the Bank of Mozambique.

ARTICLE 7
(Methodology for Establishment to Observe the Daily Rate) The daily balances of demand deposits in national currency of credit institutions with the Bank of Mozambique shall not be lower, on any given day, than the amount of mandatory reserve resulting from multiplying the rate fixed in Article 3 by the levy base calculated in accordance with the terms described in Article 4 of this Regulation.

CHAPTER II
Sanctions

ARTICLE 8
(Calculation of Penalties)

1. Penalties under this Regulation apply to the deficit of mandatory reserves and to the delay in sending information requested by the Bank of Mozambique, and shall take the form of monetary fines.
2. Penalties for the mandatory reserve deficit calculated at the end of each day are determined based on the following formula:
   Penalty = [(SD + CX - (r x BI)) x T] / 365 days Where:
   SD - is the daily accounting balance of demand deposit accounts in national currency of credit institutions with the Bank of Mozambique, obtained from statements issued by the Operations and Treasury Department of the Bank of Mozambique; CX - is the cash value maintained daily in the vaults of credit institutions, obtained from information sent by the institutions to the Markets Department of the Bank of Mozambique; r - is the minimum daily levy rate of the mandatory reserve, in accordance with Article 3 of this Regulation; BI - is the levy base of the mandatory reserve, in accordance with Article 2 of this Regulation; T - is the penalty rate for the deficit of mandatory reserves, in accordance with paragraph 3 of this article.
3. The penalty T, provided for in paragraph 2 of this article, corresponds to the interest rate of the Permanent Lending Facility in force on the date of the infringement, increased by four percentage points.
4. Without prejudice to other measures that may be adopted, the Bank of Mozambique shall charge a penalty of five hundred meticais for each working day of delay in sending the information referred to in Article 12 of this Regulation.
5. The Bank of Mozambique shall debit the demand deposit account of the infringing credit institution for the value of the penalties calculated in accordance with the preceding paragraphs.

ARTICLE 9
(Aggravation of Penalty)
The penalty rate provided for in paragraph 3 of the preceding article shall be aggravated by ten percentage points whenever, during an establishment period, an institution incurs reserve deficits for two or more days, whether consecutive or not.

ARTICLE 10
(Blocked Account Regime)

1. If, in four consecutive establishment periods of mandatory reserves, in two of them (consecutive or not), an institution incurs mandatory reserve deficits for three or more days of the same establishment period, the Bank of Mozambique will block the balance of the free movement account, allowing only credit movements, without prejudice to any additional measures provided for in the Interbank Clearing and Settlement Regulation, approved by Notice No. 9/GBM/2005 of 22 August.
2. The institution shall be notified of the account blocking, at least four days prior to its implementation.
3. The institution whose account is blocked is obliged, upon receipt of the notification, to immediately instruct the opening of a new account for clearing and other types of operations, with the Operations and Treasury Department of the Bank of Mozambique.
4. The institution whose account is blocked is also obliged to fund the blocked account for the purpose of: meeting mandatory reserve requirements.
5. The Bank of Mozambique reserves the right to transfer from the new account to the blocked account the balances necessary for the institution to meet Mandatory Reserves.
6. While deficits persist in the blocked account, the penalty on daily deficits shall be applied based on the rate provided for in Article 9.
7. Within a period of no less than four mandatory reserve establishment periods, the Bank of Mozambique may instruct the lifting of the account block.

CHAPTER III
Final Provisions

ARTICLE 11
(Exemption Period)

1. All credit institutions are exempt from establishing mandatory reserves for a maximum period of three months from the date of commencement of their activity.
2. If the institution wishes to join the Interbank Markets before the expiry of the period referred to in the preceding paragraph, it must waive the remaining exemption period, in order to comply with the provisions of paragraph a) of Article 3 of Notice No. 2/GBM/2009 of 26 January - Market Operations System.
3. The exemption referred to in paragraph 1 of this article is automatic, and its terms shall be formally communicated by the Banking Supervision Department of the Bank of Mozambique.

ARTICLE 12
(Sending of Information)

1. Credit institutions covered by this Regulation shall send to the Bank of Mozambique, with reference to the levy base calculation period indicated in paragraph 2 of Article 4, the information contained in the mandatory reserve calculation sheet attached, which forms an integral part of this Regulation.
2. The mandatory reserve calculation sheet referred to in the preceding paragraph must be received by the Bank of Mozambique by the third working day following the end of the calculation period to which it refers, and may be corrected until the last working day prior to the start of the respective establishment period. Late submission of sheets is an indispensable condition for acceptance regarding subsequent periods.
3. Any correction occurring during the establishment period to which the information refers and which implies a reduction in the levy base shall not be considered for penalty calculation purposes; the previous information shall prevail for these cases.
4. Credit institutions are obliged to retain, for a period of five years, all documents that allow them to prove the information contained in the sheet referred to in paragraph 1 of this article.

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ANNEX: MANDATORY RESERVES CALCULATION SHEET
MANDATORY RESERVES CALCULATION SHEET
Institution Name:
Calculation Period:
Establishment Period:
Values in Meticals (MZN) DESIGNATION
DAILY BALANCES SIMPLE AVERAGE RO's
Day X Day X+1 Day X+2 Day X+n 8.00%
A. RESIDENT DEPOSITS
Demand Deposits (4000010+4000020+4000030+
4000040+4000050+4000060+
4000110+4000120+4000130+
4000140+4000150+4000160
Balance X Balance X+1 Balance X+2 Balance... Balance X+n M (M 8.0%) Deposits with Prior Notice (4000011+4000021+4000031+ 4000041+4000051+4000061+ 4000111+4000121+4000131+ 4000141+4000151+4000161) Time Deposits (4000012+4000022+4000032+ 4000040+4000052+4000062+ 4000112+4000122+4000132+ 4000142+4000152+4000162) Mandatory Deposits (400007+400017) Other deposits (4000018+4000028+4000038+ 4000048+4000058+4000068+ 4000118+4000128+4000138+ 4000148+4000158+4000168) B. NON-RESIDENT DEPOSITS Demand Deposits (4001010+4001021+4001110+ 4001120) Deposits with Prior Notice (4001011+4001022+4001111+ 4001121) Time Deposits (4001012+1001023+4001112+ 4001122) Mandatory Deposits (400113+400103) Other Deposits (4001013+4001024+4001113+ 4001123)
C. STATE DEPOSITS
From the Administrative Public Sector (400000+400010) TOTAL Sum Balances X Sum Balances X+1 Sum Balances X+2 Sum Balances .. Sum Balances X+n Sum Averages (M) Sum RO's Levy Base Mandatory Reserve of the Period