Notice No. 3/GBM/2015 of May 4 Concerning the Regime for Access and Exercise of Banking Agent Activities

SUMMARY
A V I S O
The matter to be published in the «Boletim da República» must be submitted as a duly authenticated copy, one for each subject matter, containing the following endorsement, signed and authenticated: For publication in the «Boletim da República». IMPRENSA NACIONAL DE MOÇAMBIQUE, E.P. Bank of Mozambique:
Notice No. 3/GBM/2015:
Concerning the Regime for Access and Exercise of Banking Agent Activities.
Monday, May 4, 2015 I SERIES — Number 35

BANK OF MOZAMBIQUE
Notice No. 3/GBM/2015 of May 4

Showing it necessary to establish rules regarding the provision of financial services through banking agents, with the objective of ensuring greater coverage of financial services for the population, particularly in rural areas, the Bank of Mozambique, using the competence conferred upon it by paragraph 4 of Article 10 of the Regulation of the Credit Institutions and Financial Companies Act, approved by Decree No. 56/2004 of December 10, with amendments introduced by Decree No. 30/2014 of June 5, determines:

CHAPTER I
General Provisions

ARTICLE 1
Object
This Notice establishes the terms and conditions under which banks and microbanks may extend their activities through the hiring of banking agents.

ARTICLE 2
Scope of Application
This Notice applies to banks and microbanks that intend to extend their activities through the hiring of banking agents within the National territory.

ARTICLE 3
Definitions
For the purposes of this Notice, it is understood that:
a) Banking agent: an entity that, alongside its main activity, exercises one or more activities referred to in Article 6 of this Notice, in the name and on behalf of banks and/or microbanks; b) Bank: a credit institution whose object is the exercise of banking activities provided for in letters a) to m) of paragraph 1 of Article 4 of Law No. 15/99 of November 1, with amendments introduced by Law No. 9/2004 of July 21 – Credit Institutions and Financial Companies Act; c) Credit cooperative: a species of credit institution constituted in the form of a cooperative company, whose activity is developed exclusively for its members, as defined by letter f) of paragraph 2 of Article 2 of Law No. 15/99 of November 1, with amendments introduced by Law No. 9/2004 of July 21 – Credit Institutions and Financial Companies Act; d) Type 4 credit: credit granted by a credit institution that has been overdue for more than 3 months; e) Type 5 credit: credit granted by a credit institution that has been written off to the assets of the lending institution; f) Commercial entrepreneurs: natural or legal persons who, in their own name, by themselves or through third parties, exercise a commercial enterprise, as well as commercial companies, as defined in Article 2 of Decree-Law No. 2/2005 of February 27 – Commercial Code; g) Contracting institution: a credit institution of the bank or microbank species that hires a banking agent; h) Electronic money institution: a species of credit institution whose main object is the issuance of payment instruments in the form of electronic money, under applicable legislation, as defined by letter i) of paragraph 2 of Article 2 of Law No. 15/99 of November 1, with amendments introduced by Law No. 9/2004 of July 21 – Credit Institutions and Financial Companies Act; and i) Microbank: a credit institution whose object is the exercise of restricted banking activity, operating notably in microfinance, under terms defined in applicable legislation, as defined by letter j) of paragraph 2 of Article 2 of Law No. 15/99 of November 1, with amendments introduced by Law No. 9/2004 of July 21 – Credit Institutions and Financial Companies Act.

210 I SERIES — NUMBER 35
CHAPTER II
Access and General Conditions for Banking Agent Activities

ARTICLE 4
Liability

1. The banking agent acts on behalf of and under the guidance of the contracting institution, which is responsible for all its acts within the scope of the activities for which it was hired.
2. The contracting institution must guarantee, notably, the integrity, reliability, security and confidentiality of transactions carried out, as well as compliance with applicable regulations for the activity performed through the banking agent.

ARTICLE 5
Eligible Entities

1. The contracting institution may hire natural or legal persons, public or private, duly authorized to exercise their main activity, if applicable, notably:
   a) Commercial entrepreneurs; b) Registration or notary services; c) Public educational institutions; d) Public companies; e) Fixed and mobile telecommunications operators; f) Postal sector operators; or g) Credit cooperatives; h) Electronic money institutions; i) Other entities that the Bank of Mozambique may authorize from time to time.
2. Contracting institutions are exempted from requiring credit cooperatives and electronic money institutions to comply with the conditions established in Article 9 of this Notice, except for those in letter b) of paragraph 1 as well as letters e) and g) of paragraph 3 of the same article.
3. The following are not eligible as banking agents:
   a) Entities that develop illegal or prohibited activities, as well as activities related to games of chance; b) Entities whose administrative body or equivalent includes members covered by the provisions of paragraph 2 of Article 9 of this Notice; c) Entities whose exclusive or main object is the provision of banking agent services, or whose corporate control is exercised by the contracting institution, or that are in a relationship of control by a common entity; and d) Entities whose corporate control, directly or indirectly, is exercised by an administrator of any companies that are in a group relationship with the contracting institution.

ARTICLE 6
Activities of Banking Agents

1. Banking agents may only perform the following activities:
   a) Deposit and withdrawal of cash, within limits established by the contracting institution; b) Bank transfers; c) Disbursement and receipt of repayments of credits approved by the contracting institution; d) Payments for services provided by third parties; e) Provision of bank account balance; f) Provision of mini-statement; g) Reception and forwarding of requests for opening, blocking and closing deposit accounts at contracting institutions; h) Reception and forwarding of proposals regarding credit operations of the contracting institution; i) Receipt and forwarding of requests for issuance and replacement of debit, credit and prepaid cards; and j) Others that the Bank of Mozambique may authorize on a case-by-case basis.
2. The limits referred to in letter a) of the preceding paragraph must be established taking into account the risk profile associated with transaction volume and the security conditions of the banking agent.
3. The entities indicated in letters b), c) and d) of paragraph 1 of Article 5 may only perform the activities listed in letters e), f), g), h), i) and j) of paragraph 1 of this article.

ARTICLE 7
Technology Used, Support and Monitoring of Banking Agent Activities

1. The contracting institution must ensure that transactions carried out by banking agents occur in real time and are performed within the agent's establishment.
2. Without prejudice to recourse to other technologies and/or payment channels, the contracting institution must provide the banking agent with an automatic payment terminal (POS), where applicable, for performing activities indicated in Article 6.
3. The contracting institution may provide the banking agent with an automatic teller machine (ATM), provided that the following conditions are cumulatively observed:
   a) Specific contract between the parties; b) ATM security and protection conditions, ensuring adequate functioning and use by clients; and c) Capacity for the banking agent to perform support services for the terminal.
4. The contracting institution must designate the nearest bank branch to support and monitor the activities of the banking agent.

CHAPTER III
Hiring of Banking Agents

ARTICLE 8
Norms Regarding the Use of Banking Agents
The contracting institution must ensure that financial activities carried out through banking agents comply with internal norms and policies approved by the administrative body or equivalent of the contracting institution, containing at least procedures regarding:
a) Duties of identification and verification of banking agents; b) Provision of services through banking agents, as well as the description of technologies to be used; and

c) Training courses to be provided before the commencement of banking agent activities, comprising notably subjects on:
(i) Identification and verification of clients by banking agents, under applicable legislation; (ii) Operations inherent to the activities referred to in Article 6; (iii) Bank secrecy; (iv) Fraud detection mechanisms, including the identification of counterfeit and false banknotes and coins, as well as procedures for preventing and combating money laundering and terrorist financing; (v) Execution of operations, diagnosis and resolution of processing failures; and (vi) Handling of complaints.

ARTICLE 9
Criteria for Evaluating Banking Agents

1. The contracting institution must, prior to hiring, evaluate the entity to be hired as a banking agent, to ensure compliance with at least the following conditions:
   a) Being engaged in an economic activity and possessing a stable establishment; b) Not having, in the last six months, type 4 or 5 credit, nor being listed in the registry of issuers of checks without provision; c) Possessing adequate physical facilities and human resources capable of ensuring secure and efficient service provision; and d) Integrity of owners, managers, partners and members of the social bodies of eligible entities as banking agents.
2. Among other relevant circumstances and for the purposes of letter d) of the preceding paragraph, lack of integrity is indicated by the fact that the person has been:
   a) Declared, by national or foreign judgment, bankrupt or insolvent or responsible for the bankruptcy or insolvency of a company it dominates or has been administrator, director or manager of; b) Convicted, in the country or abroad, for crimes of fraudulent bankruptcy, negligent bankruptcy, forgery, theft, robbery, fraud by deception, extortion, breach of trust, usury, foreign exchange fraud and issuance of checks without provision, drug trafficking, money laundering and other economic crimes; c) Administrator, director or manager of a company, in the country or abroad, whose bankruptcy or insolvency has been prevented, suspended or avoided by remedial measures or other preventive or suspensive means, provided that the competent authorities recognize its responsibility for this situation; d) Convicted, in the country or abroad, for infringements of legal or regulatory rules governing the activity of credit institutions and financial companies, insurance activity and the securities market, when the severity or recurrence of these infringements justifies it.
3. The entity intending to be hired as a banking agent must provide the contracting institution with at least the following information:
   a) Name or firm; b) Certificate of legal registration or other equivalent document; c) License, valid activity permit or equivalent document issued by a competent entity; d) Audited financial statements of the previous economic year, as applicable; e) Tax clearance certificate issued by the respective Area Directorate or tax department; f) Criminal record certificate of the persons indicated in letter d) of paragraph 1 of this article; g) Address and contact details; and h) Proof of possession of financial resources or funds to ensure banking agent activities, notably cash deposits and withdrawals, as applicable.
4. Public administration bodies and institutions, notably registration or notary services, public educational institutions and public companies are exempt from complying with the criteria established in letters a), b) and d) of paragraph 1 and letters d), f) and h) of paragraph 3 of this article.

ARTICLE 10
Minimum Contract Clauses

1. The performance by banking agents of the activities provided for in Article 6 of this Notice must be through the conclusion of a written contract with the contracting institution.
2. The contract referred to in the preceding paragraph must contain at least clauses on the following aspects:
   a) The activities to be performed by the banking agent; b) The rights and obligations of the parties; c) The remuneration of the banking agent, including its agreed fixing conditions; d) The bank account number of the banking agent domiciled at the contracting institution used for payment of remuneration for services rendered; e) The statement that service provision by banking agents is subject to the norms of this Notice and other applicable legislation to contracting institutions, as well as the reference that the Bank of Mozambique must be granted total and timely access to internal control systems, documents, reports, archives and banking agent employees whenever necessary; f) The statement that the owner, manager, administrator, partner or equivalent of the banking agent must not perform management functions, make management decisions or act or appear to act in a manner equivalent to that of a management member or employee of the contracting institution; g) The obligation for the agent to ensure the protection of records, data, documents or relevant processes of operations carried out, establishing, for this purpose, the duty to transfer them to the contracting institution at regular previously specified intervals; h) The statement that all information and data collected by banking agents regarding services rendered, relating to clients and/or the contracting institution, is the property of the contracting institution and that copies of its documentation deemed necessary must be provided to it;

i) The obligation for the contracting institution to ensure the collection, at the banking agent's establishment, of supporting documents for transactions carried out and excess cash, within a reasonable time, taking into account the risk profile and location of the banking agent and transaction volume; j) The specification that banking agents and their employees are bound by the secrecy duty established by law, regarding operations carried out with clients in the name of the contracting institution; k) Appropriate limits on the cash amount to be maintained by banking agents, as well as payment and receipt limits per client or user; l) The obligation to present, when providing service in financing operations regarding goods and services supplied by the banking agent itself, offers from contracting institutions with which it has concluded a service provision contract to clients; m) The indication of prohibited acts for banking agents, notably:
(i) Charging any fees, commissions or charges related to the exercise of activities not provided for in the contracting institution's fee schedule, which must be prepared according to the commissions and other charges regime approved by the Bank of Mozambique; (ii) Carrying out any operation that is not in real time and without providing the respective proof; (iii) Making advances in the name of the contracting institution; (iv) Carrying out foreign exchange operations; (v) Providing guarantees in credit operations; (vi) Sub-delegating or sub-contracting a banking agent. n) The conditions for altering service provision terms and circumstances of non-compliance; and o) Causes or situations for contract termination, as well as their consequences, under this Notice.
3. Contracting institutions must keep a copy of the contract concluded with each banking agent for verification purposes by the Bank of Mozambique.

ARTICLE 11
Non-Exclusivity of Contract

1. The contract concluded between the contracting institution and the banking agent must not be exclusive.
2. A banking agent may provide services to several contracting institutions provided that the service provision contracts are separate.
3. In case of hiring a banking agent by several contracting institutions, they must ensure that the agent demonstrates capacity to manage transactions from different institutions.

ARTICLE 12
Contract Termination

1. The banking agent contract may be terminated by initiative of the agent or the contracting institution.
2. The banking agent contract must be terminated whenever one of the following causes or situations occurs:
   a) Systematic non-compliance with obligations by one of the parties that compromises the essence or maintenance of the legal relationship between them; b) Mutual agreement of the parties; c) Cessation of the main activity of the banking agent; d) Dissolution of the contracting institution or the banking agent; e) Death of the commercial entrepreneur, owner of the institution contracted as a banking agent; f) Conviction of the commercial entrepreneur, natural person, in the country or abroad, for economic crimes provided for in letter b) of paragraph 2 of Article 9 of this Notice; g) Change or closure of establishment without prior written consent of the contracting institution.
3. The Bank of Mozambique may determine contract termination when the banking agent violates laws and regulations governing credit institutions and financial companies activities and consumer rights in general, as well as when it does not observe the determinations of the contracting institution, putting at risk the interests of depositors and other creditors.
4. Whenever a banking agent contract is terminated, the contracting institution must:
   a) Ensure immediate withdrawal of the banking agent's identification elements, provided for in Article 14 of this Notice; b) Publish such fact in the country's most widely circulated newspaper, as well as at the location where it performed activities, in a manner that allows public knowledge of the cessation of services as a banking agent; c) Guarantee completion of ongoing transactions requested by clients from the banking agent; and d) Ensure that such fact does not unduly prejudice rights and interests of its clients.

ARTICLE 13
Duty to Inform and Registry of Banking Agents

1. The contracting institution must provide information to the Bank of Mozambique regarding banking agent activities, as well as violations of applicable laws and regulations, under conditions and periodicity to be defined.
2. A registry of banking agents operates at the Bank of Mozambique, whose incidences are communicated by contracting institutions, under terms and conditions to be defined.
3. Without prejudice to the registry referred to in the preceding paragraph, contracting institutions must possess and maintain a registry for recording banking agent incidences.

ARTICLE 14
Duty to Inform the Public

1. Contracting institutions must ensure public availability, in all branches, on their Internet pages and at banking agent establishments, in a highly visible, directly accessible and easily identifiable location:
   a) The updated list of their banking agents, including name, address and telephone number or any other means of communication;

b) Products and services provided by banking agents; and c) Contact details for the contracting institution's free customer service, in a visible location inside the establishment, for complaints, public clarification or verification of agent authenticity.
2. The contracting institution must also:
a) Have prior knowledge of the change or closure of a banking agent's establishment, with a minimum advance notice of 30 days; and b) Ensure that the banking agent informs the public about the change or closure of its establishment, with a minimum advance notice of 15 days from the date of verification.

ARTICLE 15
Identification of Banking Agents
The contracting institution must ensure that its banking agent publicly discloses, in a visible location, the name or firm followed by the designation "agent of (indicating the name of the contracting institution)", in Portuguese.

CHAPTER IV
Final Provisions

ARTICLE 16
Sanctioning Regime
Violation of the provisions of this Notice constitutes an offense punishable under the Credit Institutions and Financial Companies Act.

ARTICLE 17
Clarification of Doubts
Doubts arising from the interpretation and application of this Notice must be submitted to the Regulation and Licensing Department of the Bank of Mozambique.

ARTICLE 18
Entry into Force
This Notice enters into force on the date of its publication.

Maputo, April 13, 2015. — Governor of the Bank of Mozambique, Ernesto Gouveia Gove.

Price — 10.50 MT
IMPRENSA NACIONAL DE MOÇAMBIQUE, E.P.