Regulation (NAP) - Credit to Employees

Vistos (Review) Granted by Revocation:
Central Bank of
S. T. P.
ENTRY INTO
FORCE
03/03/2008
DATE OF ISSUE
26/11/2007
DOC NO.
12/07
P.M.
CODE
PROPOSER(S)
D.S.B
PG 1/2
Subject: Credit to Employees

The Central Bank of São Tomé and Príncipe, exercising the competence established by Articles 38(a)(d) and Article 8(d) and (f) of its Organic Law, taking into account the provisions of Article 27 of the Financial Institutions Act; Considering the need to regulate credit to employees of financial institutions, the Central Bank of São Tomé and Príncipe determines:

Article 1
On credit policy for employees

1. The Board of Directors of a financial institution authorized to operate in São Tomé and Príncipe is obliged to establish, in writing, a policy on credit and other forms of financial assistance granted to employees or for their benefit, and ensure the implementation of that policy by its respective Management.
2. The policy shall apply to all bank employees who are not considered related parties, in accordance with the provisions of the Financial Institutions Act and the Standard on Transactions with Related Parties.
3. Each financial institution shall establish the necessary procedures for monitoring compliance with that policy.
4. The Board of Directors shall review this policy every two years.
5. The credit policy, in particular, shall:
   a) Impose mandatory limits on credit operations with employees, which must not exceed the maximum limits provided; b) Prohibit the financial institution from granting any other benefits in the provision of credit or other forms of assistance not provided for, in writing, in the policy adopted by the Board of Directors; and

NAP
PERMANENT APPLICATION STANDARD E0 99

NAP
PERMANENT APPLICATION STANDARD E0 99

• P.M.
  PROPOSER(S) ENTRY INTO
  FORCE
  DATE OF ISSUE DOC NO. PG 2/2
  D.S.B 03/03/2008 26/11/2007 12/07 c) Prohibit the financial institution from altering credit granting criteria, collection procedures, or any other procedure or credit administration policy, to allow the execution of an operation for the benefit of the employee.

Article 2
Restrictions

1. The financial institution may not grant credit to employees at interest rates lower than the average cost of fund acquisition.
2. The financial institution must not provide any financial assistance to employees at a cost lower than that of the institution or which results in a loss for the institution.

Article 3
Entry into Force
This NAP shall enter into force upon its publication.

Central Bank of São Tomé and Príncipe, 03 March 2008

Vistos (Review) Granted by Revocation:
P.M.