Banco Nacional de Angola

343 Pages·2014·2.82 MB·English

SADC Financial Systems:
Structures, Policies and Markets

August 2014

Disclaimer

This report has been prepared from information produced by the SADC
central banks and all efforts have been made to ensure the accuracy of the
information contained herein. However, the Secretariat of the Committee of
Central Bank Governors does not warrant the correctness of, and shall not
be held responsible for any errors or omissions contained in the information
received.

This report has been prepared by the Secretariat of the Committee of Central
Bank Governors with information made available as at 4 July 2014.
Foreword

Early in 1995, the Finance and Investment Sector of the Southern African Development
Community (SADC) was created and the co-ordination of this new sector was allocated to
South Africa. Within this sector, two independent but interrelated committees were
established, namely the Committee of Treasury Officials to attend to fiscal issues, and the
Committee of Central Bank Governors to attend to monetary policy issues.

At its inaugural meeting on 24 November 1995, the Committee of Central Bank Governors in
SADC (CCBG) identified the need for greater knowledge of the structures and policies of
central banks as well as the financial markets of member states as a prerequisite for future
co-operation in the area of monetary policy. To this end, a project was launched to establish
an information base on central banks in the region. In July 1996, the Ministers of Finance of
the twelve member states approved this initiative as an official project of SADC.

A comprehensive questionnaire was developed, based on a similar survey done by the Bank
for International Settlements on central banks in Eastern Europe. All central banks in SADC
completed this questionnaire in detail.

It is hoped that the information contained in this report will provide a basis for closer co-
operation in the area of central banking in the region.

Any comments or enquiries can be directed to:
The Secretariat of the Committee of Central Bank Governors in SADC
South African Reserve Bank
P.O. Box 427, Pretoria 0001
SOUTH AFRICA
Tel. [phone]
Fax. [phone]
E-Mail: [email protected]

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TABLE OF CONTENTS

Banco Nacional de Angola ....................................................................................... 1
1. History ........................................................................................................................ 1
2. Relationship with government ................................................................................. 2
3. Design and conduct of monetary policy .................................................................. 4
3.1 Main objectives of monetary policy ............................................................... 4
3.2 Instruments of monetary policy ..................................................................... 4
3.3 Types of refinancing as well as collateral used ............................................. 4
3.4 The money supply aggregate that plays the main role in
monetary policy ............................................................................................ 5
3.5 Reserve requirements on financial institutions .............................................. 5
4. Structure of the financial markets ............................................................................ 5
4.1 Organisation of the money and capital markets ............................................ 5
4.2 Instruments used in both these markets ........................................................ 6
4.3 Legal frameworks existing for the money and capital markets ...................... 6
4.4 Type of financial intermediaries operating in these markets .......................... 6
5. External payment arrangements .............................................................................. 8
5.1 Determination of the exchange rate policy .................................................... 8
5.2 The present exchange rate system ............................................................... 8
5.3 Organising the exchange market .................................................................. 8
5.4 The central bank's involvement in managing foreign
exchange reserves. ...................................................................................... 8
6. Currency convertibility and exchange control ........................................................ 8
6.1 Current state of currency convertibility .......................................................... 8
6.2 Exchange control on current account transactions ........................................ 9
6.3 Restrictions on capital account transactions................................................ 10
6.4 Retention rules for foreign exchange earned and owned by residents ........ 10
7. The central bank and external debt ........................................................................ 10
7.1 The role of the central bank in managing the country's external debt .......... 10
7.2 The role of Treasury in this respect ............................................................. 10
8. Supervision of financial institutions ...................................................................... 11
8.1 Banking institutions ..................................................................................... 11
8.2 Non-banking institutions .............................................................................. 13
9. National payment, clearing and settlement system .............................................. 14
9.1 How is the payment, clearing and settlement system organised? ............... 14
9.2 What is the role of the central bank in the system? ..................................... 15
9.3 Short description of the processing of payment instructions ........................ 15
9.4 How are non-funded positions settled in the system? ................................. 16
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10. Currency in use ....................................................................................................... 16
10.1 List of legal tender notes and coins currently issued and in use in the
economy .................................................................................................... 16
11. Other activities of the central bank not covered above ....................................... 17
12. The position of the central bank in SADC ............................................................. 17
13. Publications ............................................................................................................. 17
13.1 Regularly published publications ................................................................. 17
13.2 Occasional/special publications published since 1990 ................................ 17

Bank of Botswana .................................................................................................... 19
1. History ...................................................................................................................... 19
2. Relationship with government ............................................................................... 19
3. Structure .................................................................................................................. 20
4. Design and conduct of monetary policy ................................................................ 20
4.1 Main objectives of monetary policy ............................................................. 20
4.2 Instruments of monetary policy ................................................................... 21
4.3 Types of refinancing as well as collateral used ........................................... 21
4.4 The money supply aggregate that plays the main role
in monetary policy ...................................................................................... 21
4.5 Reserve requirements on financial institutions ............................................ 21
5. Structure of the financial markets .......................................................................... 21
5.1 Organisation of the money and capital markets .......................................... 21
5.2 Instruments used in both these markets ...................................................... 22
5.3 Legal frameworks existing for the money and capital markets .................... 22
5.4 Financial institutions participating in the open market
operations………………………………………………………………. ............ .23
6. External payment arrangements ............................................................................ 23
6.1 Determination of the exchange rate policy .................................................. 23
6.2 The exchange rate system .......................................................................... 23
6.3 Organising the exchange market ................................................................ 23
6.4 The central bank's involvement in managing foreign
exchange reserves ..................................................................................... 24
7. Currency convertibility and exchange control ...................................................... 24
7.1 Current state of currency convertibility ........................................................ 24
7.2 Exchange control restrictions on current account transactions .................... 24
8. The central bank and external debt ........................................................................ 25
8.1 The role of the central bank in managing the country's external debt .......... 25
8.2 The role of Treasury in this respect ............................................................. 25
9. Supervision of financial institutions ...................................................................... 26
9.1 Banking institutions ..................................................................................... 26
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9.2 Non-banking institutions .............................................................................. 30
10. National payment, clearing and settlement system .............................................. 31
10.1 The payment, clearing and settlement system infrastructure ....................... 31
10.2 The role of the central bank in the systems ................................................. 32
10.3 Short description of the processing of payment instructions ........................ 33
11. Currency in use ....................................................................................................... 34
11.1 List of legal tender notes and coins currently issued and
in use in the economy ................................................................................. 34
12. Other activities of the central bank not covered above ....................................... 34
13. The position of the central bank in SADC ............................................................. 34
13.1 Special relationships with other central banks
in SADC (CMA excluded) ........................................................................... 34
14. Publications ............................................................................................................. 35
14.1 Regularly published publications. ................................................................ 35
14.2 Occasional/special publications published since 1990. ............................... 35

Banque Centrale du Congo…...…….…………………………………………………..…… 37
1. Background………………………………………………………………………………... 37
2. Relationship with government……………..……………………………………......... 38
3. Determination and implementation of the monetary policy................................ 39
3.1 Main objectives of monetary policy............................................................. 39
3.2 Reform of the analytic framework of the Monetary Policy........................... 39
3.3 Instruments of monetary policy................................................................... 41
3.4 Reforms to be undertaken……................................................................... 42
4. Structure of the financial market …………………..…………………………………. 43
4.1 Organisation of the money market............................................................ 43
4.2 The money markets........................... 43
5. Supervision of financial institutions…..………………………..……………………. 45
6. National payment system……………………………………………..………………. 46

Central Bank of Lesotho ................................................................................................ 49
1. History ...................................................................................................................... 49
2. Relationship with government ............................................................................... 49
2.1 Institutional arrangements .......................................................................... 49
2.2 Operational framework ............................................................................... 49
3. Design and conduct of monetary policy ................................................................ 50
3.1 Main objectives of monetary policy ............................................................. 50
3.2 Instruments of monetary policy ................................................................... 50
3.3 Types of refinancing as well as collateral used ........................................... 51
3.4 The money supply aggregate that plays the main role
in monetary policy ....................................................................................... 51
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3.5 Reserve requirements on financial institutions ............................................ 51
4. Structure of the financial markets .......................................................................... 52
4.1 Organisation of the money and capital markets .......................................... 52
4.2 Instruments used in both these markets ...................................................... 52
4.3 Legal frameworks existing for the money and capital markets .................... 52
4.4 Type of financial intermediaries operating in these markets ....................... 52
5. External payment arrangements ............................................................................ 53
5.1 Determination of the exchange rate policy .................................................. 53
5.2 The present exchange rate system ............................................................. 53
5.3 Organising the exchange market ................................................................ 53
5.4 The central bank's involvement in managing foreign
exchange reserves ..................................................................................... 53
6. Currency convertibility and exchange control ...................................................... 53
6.1 Current state of currency convertibility ........................................................ 53
6.2 Exchange control restrictions on current account ........................................ 53
6.3 Restrictions on capital account.................................................................... 53
6.4 Retention rules for foreign exchange earned or owned
by residents ................................................................................................ 54
7. The central bank and external debt ........................................................................ 54
7.1 The role of the central bank in managing the country's
external debt ............................................................................................... 54
7.2 The role of Treasury in this respect ............................................................. 54
8. Supervision of financial institutions ...................................................................... 55
8.1 Banking institutions ..................................................................................... 55
8.2 Insurance institutions .................................................................................. 56
8.3 Non-banking institutions .............................................................................. 58
9. National payment, clearing and settlement system .............................................. 59
9.1 How is the payment, clearing and settlement system organised? ............... 59
9.2 What is the role of the central bank in the system? ..................................... 60
9.3 Short description of the processing of payment instructions ........................ 60
9.4 How are non-funded positions settled in the system? ................................. 60
10. Currency in use ....................................................................................................... 61
10.1 List of legal tender notes and coins currently issued
and in use in the economy .......................................................................... 61
11. Other activities of central banks not covered above ............................................ 61
12. The position of the central bank in SADC ............................................................. 61
12.1 Special relationships with other central banks in
SADC (CMA excluded) ............................................................................... 61
13. Publications ............................................................................................................. 61
13.1 Regularly published publications. ................................................................ 61
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13.2 Occasional/special publications published since 1990. ............................... 61

Banque Centrale de Madagascar ................................................................................. 63
1. History ...................................................................................................................... 63
2. Relationship with government ............................................................................... 64
3. Design and conduct of monetary policy ................................................................ 65
3.1 Main objectives of monetary policy ............................................................. 65
3.2 Design of monetary policy ........................................................................... 65
3.3 Organisation ............................................................................................... 66
4. Structure of the financial markets .......................................................................... 66
4.1 Organisation of the money and capital markets .......................................... 66
4.2 Allocation of Treasury bill contract .............................................................. 66
4.3 The inter-bank market ................................................................................. 67
4.4 Money markets .......................................................................................... 68
4.5 Instruments used ....................................................................................... 68
4.6 Legal and regulatory framework ................................................................. 69
4.7 Financial intermediaries operating on these markets ................................. 69
4.8 Money market development ....................................................................... 70
5. External payment arrangements ............................................................................ 70
5.1 The exchange rate policy ............................................................................ 70
5.2 The foreign exchange interbank market ...................................................... 70
6. Currency convertibility and exchange control ...................................................... 71
6.1 Convertibility of the Ariary ........................................................................... 71
7. The central bank and external debt ........................................................................ 72
8. Supervision of financial institutions ...................................................................... 72
8.1 Supervisory authority .................................................................................. 72
8.2 Credit institutions approval .......................................................................... 73
8.3 Approval procedures of credit institutions .................................................... 73
8.4 Minimum capital required for different categories of credit institutions ......... 75
8.5 Measures and sanctions to be taken in case of default ............................... 76
8.6 Monitoring of prudential risks and standards ............................................... 77
8.7 Prudential regulations ................................................................................. 78
8.8 Prudential ratios .......................................................................................... 79
8.9 Management standards .............................................................................. 81
8.10 Anti-money laundering and financing of terrorism measures ....................... 83
9. National payment, clearing and settlement system .............................................. 84
9.1 Constitutive elemnet of paymnet system in Madagascar ............................. 59
9.2 What is the role of the central bank in the system? ..................................... 60
9.3 Short description of the processing of payment instructions ........................ 60
9.4 How are non-funded positions settled in the system? ................................. 60
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10. Currency in use ....................................................................................................... 89
11. Other activities of central banks not covered above ............................................ 90
11.1 Monetary signs management ...................................................................... 90
11.2 Services provided to the banks ................................................................... 90
12. The position of the central bank in SADC ............................................................. 90
13. Publications ............................................................................................................. 90

Reserve Bank of Malawi ......................................................................................... 91
1. History ...................................................................................................................... 91
2. Relationship with government ............................................................................... 91
3. Structure .................................................................................................................. 92
4. Design and conduct of monetary policy ................................................................ 92
4.1 Main objectives of monetary policy ............................................................. 92
4.2 Instruments of monetary policy ................................................................... 93
4.3 Types of refinancing as well as collateral used ........................................... 93
4.4 The money supply aggregate that plays the main role
in monetary policy ....................................................................................... 93
4.5 Reserve requirements on financial institutions ............................................ 93
5. Structure of the financial markets .......................................................................... 93
5.1 Organisation of the money and capital markets .......................................... 93
5.2 Instruments used in both these markets ...................................................... 94
5.3 Legal frameworks existing for the money and capital markets .................... 94
5.4 Type of financial intermediaries operating in these markets ....................... 94
6. External payment arrangements ............................................................................ 96
6.1 Determination of the exchange rate policy .................................................. 96
6.2 The present exchange rate system ............................................................. 96
6.3 Organising the exchange market ................................................................ 96
6.4 The central bank's involvement in managing foreign
exchange reserves. ..................................................................................... 96
7. Currency convertibility and exchange control ...................................................... 97
7.1 Current state of currency convertibility ........................................................ 97
7.2 Exchange control restrictions on current account ........................................ 97
7.3 Restrictions on capital account.................................................................... 97
7.4 Retention rules for foreign exchange earned or owned
by residents ................................................................................................ 97
8. The central bank and external debt ........................................................................ 97
8.1 The role of the central bank in managing the country's
external debt ............................................................................................... 97
8.2 The role of Treasury in this respect ............................................................. 98
9. Supervision of financial institutions ...................................................................... 98
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9.1 Banking institutions ..................................................................................... 98
9.2 Non-banking institutions ............................................................................ 101
9.3 Capital Market ........................................................................................... 102
10. National payment, clearing and settlement system ............................................ 102
10.1 How is the payment, clearing and settlement system organised? ............. 102
10.2 What is the role of the central bank in the system? ................................... 103
10.3 Give a short description of the processing of payment instructions ........... 103
10.4 How are non-funded positions settled in the system? ............................... 104
11. Currency in use ..................................................................................................... 104
11.1 List of legal tender notes and coins currently issued and in
use in the economy ................................................................................... 104
12. Other activities of the central bank not covered above ...................................... 104
13. The position of the central bank in SADC ........................................................... 104
13.1 Special relationships with other central banks in
SADC (CMA excluded) ............................................................................. 104
14. Publications ........................................................................................................... 104
14.1 Regularly published publications. .............................................................. 104
14.2 Occasional/special publications published since 1990. ............................. 105

Bank of Mauritius .................................................................................................. 107
1. History .................................................................................................................... 107
2. Relationship with government ............................................................................. 107
3. Structure ................................................................................................................ 108
4. Design and conduct of monetary policy .............................................................. 108
4.1 Main objectives of monetary policy ........................................................... 108
4.2 Instruments of monetary policy and types of refinancing
as well as collateral used .......................................................................... 109
4.3 The money supply aggregate that plays the main role in
monetary policy ......................................................................................... 110
4.4 Reserve requirements on financial institutions .......................................... 110
5. Structure of the financial markets ........................................................................ 111
5.1 Organisation of the money and capital markets ........................................ 111
5.2 Instruments used in the money and capital markets .................................. 112
5.3 Legal framework for the money and capital markets ................................. 113
5.4 Type of financial intermediaries operating in these markets ...................... 113
6. External payment arrangements .......................................................................... 114
6.1 Responsibility for determining exchange rate policy .................................. 114
6.2 Present exchange rate regime .................................................................. 114
6.3 Organisation of the foreign exchange market ............................................ 114
6.4 Management of foreign reserves ............................................................... 114
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7. Currency convertibility and exchange control .................................................... 114
7.1 Current state of currency convertibility ...................................................... 114
7.2 Exchange control restrictions on current account transactions .................. 114
7.3 Restrictions on capital account transactions.............................................. 114
7.4 Retention rules for foreign exchange earned or owned by residents ......... 114
8. The central bank and external debt ...................................................................... 114
8.1 The role of the central bank in managing the country's
external debt ............................................................................................. 114
8.2 The role of Treasury in this respect ........................................................... 115
9. Supervision of financial institutions .................................................................... 115
9.1 Banking institutions ................................................................................... 115
9.2 Non-banking institutions ............................................................................ 127
10. National payment, clearing and settlement system ............................................ 131
10.1 How is the payment, clearing and settlement system organised? ........... 131
10.2 What is the role of the central bank in the system? ................................... 132
10.3 Short description of the processing of payment instructions ...................... 132
10.4 How are non-funded positions settled in the system? ............................... 133
10.5 International Bank Account Number .......................................................... 134
11. Currency in use ..................................................................................................... 134
11.1 List of legal tender notes and coins currently issued and in
use in the economy ................................................................................... 134
11.2 Introduction of polymer bank notes ........................................................... 134
12. Other activities of central banks not covered above .......................................... 135
13. The position of the central bank in SADC ........................................................... 135
13.1 Special relationships with other central banks in
SADC (CMA excluded) ............................................................................. 135
14. Publications ........................................................................................................... 135
14.1 Regularly published publications. .............................................................. 135
14.2 Occasional/special publications published since 1990. ............................. 136

Banco de Moçambique ......................................................................................... 137
1. History .................................................................................................................... 137
2. Relationship with government ............................................................................. 137
3. Structure ................................................................................................................ 138
4. Design and conduct of monetary policy .............................................................. 138
4.1 Main objectives of monetary policy ........................................................... 138
4.2 Instruments of monetary policy ................................................................. 138
4.3 Types of refinancing as well as collateral used ......................................... 139
4.4 The money supply aggregate that plays the main role in
monetary policy ......................................................................................... 139
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