Regulation (NAP) - Regulation on the Granting of Intraday Credit

Banco Central de S.T.P	N A P PERMANENT APPLICATION STANDARD	CODE RD 09
PROPOSER(S) PMGL	EFFECTIVE DATE 20/02/2012	ISSUANCE DATE 16/02/2012	DOC. NO. 05/ 2012	PAGE 1/5

Subject: Regulations on the Granting of Intraday Credit

Credit operations between financial institutions in the Interbank Market are carried out through the Interbank Money Market (IMM) and the Intraday Credit Market (ICM); both created to regulate the liquidity of the banking system and facilitate the execution of settlement operations.

It being necessary to establish the modalities for granting intraday credit for settlement operations within the Dobra 24 Network;

In accordance with the provisions of paragraph k) of Article 8 of the Organic Law of the Central Bank, Law No. 8/92 of August 3;

The Board of Directors of the Central Bank of São Tomé and Príncipe determines:

Article 1
The rules defining the contractual obligations arising from the relationship between the Central Bank of São Tomé and Príncipe and financial institutions operating in the intraday money market are established.

Article 2
The rules aim to adopt mechanisms to cover potential liquidity shortages of Financial Institutions in settlement operations within the Dobra 24 Network.

Article 3
Financial Institutions must request from the BCSTP the granting of intraday credit in their favor with collateral (foreign currency deposits representing creditor balances of these Institutions at the Central Bank).

Article 4
Financial institutions are bound through the signing of a contract attached to this standard.

Article 5
This standard enters into force immediately upon its publication.

Central Bank of São Tomé and Príncipe, February 16, 2012

Reviewed [Signature] | Revocation Data:

Banco Central de S.T.P	N A P PERMANENT APPLICATION STANDARD	CODE RD 09
PROPOSER(S) PMGL	EFFECTIVE DATE 20/02/2012	ISSUANCE DATE 16/02/2012	DOC. NO. 05/ 2012	PAGE 2/5

CONTRACT FOR THE GRANTING OF INTRADAY CREDIT

The Central Bank of São Tomé and Príncipe, hereinafter designated Lender on one part, domiciled at Independence Square - P.O. Box 13 S.Tomé, and X.......................................................... hereinafter designated, Borrower, on the other part, domiciled at ...........................;

With the objective of adopting mechanisms that allow for the proper functioning of the intraday market, the parties stipulate the following:

Clause 1.
(Object)
Intraday credit is exclusively intended to cover potential liquidity shortages by the Borrower, for settlement purposes within the Dobra 24 Network.

Clause 2.
(Credit Opening)

1. Credit opening is carried out after acceptance, verification, and registration by the Lender of the creditor balances of deposits from participating Institutions.
2. The conditions for opening intraday credit and establishing the respective collateral are established in accordance with the provisions of clauses 3, 5, 6, and 7 of this contract.

Clause 3.
(Credit Amount)

1. The outstanding credit amount corresponds, at any given time, to the amount necessary to offset the debtor balance of accounts opened in the name of the Borrower.
2. The Borrower is obligated daily until closing time to repay the Lender the outstanding intraday credit amount.

Clause 4.
(Applicable Interest Rates)
The interest rate to be applied is the BCSTP reference interest rate plus a spread of 2%.

Clause 5.
(Provision of Collateral)
The collateral offered by the Borrower must be foreign currency deposits at the Central Bank.

Reviewed [Signature] | Revocation Data:

Banco Central de S.T.P	N A P PERMANENT APPLICATION STANDARD	CODE RD 09
PROPOSER(S) PMGL	EFFECTIVE DATE 20/02/2012	ISSUANCE DATE 16/02/2012	DOC. NO. 05/ 2012	PAGE 3/5

Clause 6.
(Collateral Reinforcement)

1. If the collateral offered by the Borrower proves insufficient, the Lender may request said reinforcement.
2. Collateral reinforcement must be confirmed through funding in the Borrower's deposit account with the Lender.
3. The Lender reserves the right to proceed with automatic debiting of the Borrower's account.

Clause 7.
(Complementary Collateral)

1. If the collateral established through reinforcement proves insufficient, the Lender accepts complementary collateral upon authorization by a 2nd participating Institution.
2. This authorization guarantees the Lender the right to proceed with automatic debiting of the 2nd participating Institution's account.

Clause 8.
(Amortization)

1. The utilized credit amount must be repaid by the Borrower on the next business day following receipt of the loan.
2. In case of default, a rate of 3% is applied to the loan amount.
3. Systematic problems with loan repayment require a reappraisal regarding the Borrower's participation in the intraday credit market.

Clause 9.
(Information)

1. The Borrower must inform the Lender of the identity of the authorized person(s) to make communications under this contract and to update said information.
2. Communications and information provided under this contract, namely: amendments to the executed contract, declaration of the existence and validity of bank loans, provision of collateral, and alteration of credit amounts; must be submitted in Portuguese and sent by fax, postal mail with acknowledgment of receipt, or electronic messaging system.

Reviewed [Signature] | Revocation Data:

Banco Central de S.T.P	N A P PERMANENT APPLICATION STANDARD	CODE RD 09
PROPOSER(S) PMGL	EFFECTIVE DATE 20/02/2012	ISSUANCE DATE 16/02/2012	DOC. NO. 05/ 2012	PAGE 4/5

Clause 10.
(Default)

1. Non-compliance with this contract, as well as the occurrence of any situations violating obligations stipulated by the Borrower, entail the sanctions listed below:
   a) After the third day of non-repayment, in addition to the provision in paragraph 2 of Clause 8, the Lender executes the collateral without any prior notice, notification, or formality. b) If violations resulting from non-repayment persist, the Borrower is automatically suspended from credit granting until obligations arising from this contract are fulfilled. c) In cases of systematic or constant defaults, the Borrower is suspended from participation in the Intraday Money Market and may be subject to inspections by the Banking Supervision Directorate. d) The provision in the preceding paragraph does not prejudice the cumulative application of a fine equal to double the loan amount, which is automatically debited.

Clause 11.
(Assignment of Contractual Position)

1. The rights and obligations of the Borrower arising from this Contract and operations covered therein shall not, under any circumstances, be assigned to third parties, nor negotiated in any manner without the prior and express consent of the Lender.

Clause 13.
(Termination)

1. This contract may be terminated upon a prior notice of 90 days, with all obligations of the contracting parties safeguarded.

Clause 14.
(Applicable Jurisdiction and Law)

1. Operations conducted under this Contract are subject to national legislation in general, and particularly to the provisions of Central Bank regulations.

Clause 15.
(Final Provisions)

1. Any clarifications regarding this matter must be requested from the Directorate of Markets and Liquidity Management of the Central Bank of São Tomé and Príncipe.

Reviewed [Signature] | Revocation Data:

Banco Central de S.T.P	N A P PERMANENT APPLICATION STANDARD	CODE RD 09
PROPOSER(S) PMGL	EFFECTIVE DATE 20/02/2012	ISSUANCE DATE 16/02/2012	DOC. NO. 05/ 2012	PAGE 5/5

Clause 16.
(Entry into Force)
This standard enters into force immediately upon its publication.

Central Bank of São Tomé and Príncipe, February 16, 2012

Reviewed [Signature] | Revocation Data: