CHAPTER 387 - BANKING AND FINANCIAL SERVICES ACT: SUBSIDIARY LEGISLATION
INDEX TO SUBSIDIARY LEGISLATION
Banking and Financial Services (Designation of Urban and Rural Areas) Order
Banking and Financial Services (Cost of Borrowing) Regulations
Banking and Financial Services (Payment of Fees) Regulations
Banking and Financial Services (Return of Unclaimed Funds) Regulations
Banking and Financial Services (Reserve Account) Regulations
Banking and Financial Services (Disclosure of Deposit Charges and Interest) Regulations
Banking and Financial Services (Capital Adequacy) Regulations
Banking and Financial Services (Fixed Assets Investment) Regulations
Banking and Financial Services (Insider Lending) Regulations
Banking and Financial Services (Large Loan Exposures) Regulations
Banking and Financial Services (Foreign Exchange Risk Management and Exposure) Regulations
Banking and Financial Services (Exemption) Regulations
Banking and Financial Services (Money Circulation Pyramid Schemes) Regulations
Banking and Financial Services (Bureau de Change) Regulations
Banking and Financial Services (Micro-finance) Regulations
Banking and Financial Services (Restriction on Kwacha Lending to Non-Resident) Regulations
Banking and Financial Services (Bank Holiday) (Declaration) Order
Banking and Financial Services Act (Commencement) Order
Banking and Financial Services (Classification and Provisioning of Loans) (Revocation) Order
BANKING AND FINANCIAL SERVICES (DESIGNATION OF URBAN AND RURAL AREAS) ORDER
Arrangement of Paragraphs
Paragraph
2. Designation of rural and urban areas
SI 92 of 1989.
This Order may be cited as the Banking and Financial Services (Designation of Rural and Urban Areas) Order.
2. Designation of rural and urban areas
(1) The areas specified in the First Schedule to this Order are hereby designated as urban areas.
(2) The areas specified in the Second Schedule to this Order are hereby designated as rural areas.
[Paragraph 2(1)]
URBAN AREAS
| Central Province | |
| Kabwe Mumbwa Serenje Kapri Mposhi Mkushi |
|
| Copperbelt Province | |
| Ndola Kitwe Chingola Mufulira Chililabombwe Luanshya Kalulushi |
|
| Eastern Province | |
| Chipata Petauke |
|
| Luapula Province | |
| Mansa | |
| Lusaka Province | |
| Lusaka Kafue |
|
| Northern Province | |
| Kasama Mpika Isoka Mbala |
|
| North-Western Province | |
| Solwezi Zambezi |
|
| Southern Province | |
| Choma Livingstone Mazabuka Monze Kalomo Siavonga Maamba |
|
| Western Province | |
| Mongu |
[Paragraph 2(2)]
RURAL AREAS
Those areas not specified in the First Schedule.
Arrangement of Regulations
Regulation
3. Application for registration as commercial bank or financial institution
4. Registered commercial bank to submit monthly statements to Registrar
5. Registered financial institution to submit monthly and quarterly statements to Registrar
6. Rate of conversion of non-Zambian money to Zambian currency to be stated
[Regulations by the Minister]
SI 226 of 1973.
These Regulations may be cited as the Banking RegulationsThese Regulations made under the repealed Act continues in operation under section 15 of the Interpretation and General Provisions Act.*.
In these Regulations, unless the context otherwise requires—
“form” means the appropriate form prescribed in the Schedule.
3. Application for registration as commercial bank or financial institution
An application for registration as a commercial bank or a financial institution made in terms of paragraphs (a) and (b) of sub-section (1) of section 4 or section 5 of the Act shall be in revised Form ZBK No. 1 and shall be accompanied by the following documents—
(a) a true copy, certified by the chairman and a director of the applicant, of the memorandum and articles of association, or other document relating to the incorporation or registration of the applicant as a body corporate, and regulating the conduct of the business of the applicant; and
(b) a true copy, certified by the Registrar of Companies, of the certificate of incorporation of the applicant, issued in terms of the law relating to companies; and
(c) a statement certified by the chairman, a director and the auditors of the applicant showing the authorised and paid-up capital of the applicant at a date not earlier than thirty days before the date of the application.
4. Registered commercial bank to submit monthly statements to Registrar
(1) The monthly statement which a registered commercial bank is required to prepare and submit to the Registrar in terms of—
(a) paragraph (a) of sub-section (1) of section 60 of the Act shall be in revised Form ZBK No. 2;
(b) paragraph (b) of sub-section (1) of section 60 of the Act shall be in revised Form ZBK No. 3.
(2) For the purposes of paragraph (c) of sub-section (1) of section 60 of the Act, a registered commercial bank shall prepare and submit to the Registrar within twenty-eight days after the last day of every calendar month a supplementary statement of the assets and liabilities of its offices and branches in Zambia at the close of the last business day of that month.
(3) The supplementary statement referred to in sub-regulation (2) shall be in revised Form ZBK No. 3.
5. Registered financial institution to submit monthly and quarterly statements to Registrar
(1) The monthly statement which a registered financial institution is required to prepare and submit to the Registrar in terms of paragraph (a) of sub-section (1) of section 60 of the Act shall be in revised Form ZBK No. 4.
(2) The quarterly statement which a registered financial institution is required to prepare and submit to the Registrar in terms of paragraph (b) of sub-section (1) of section 60 of the Act shall be in revised Form ZBK No. 5.
(3) For the purposes of paragraph (c) of sub-section (1) of section 29 of the Act, a registered financial institution shall prepare and submit to the Registrar within thirty-five days after the last day of each quarter ending on the 31st March, 30th June, 30th September and 31st December a supplementary statement of the assets and liabilities of its offices and branches in Zambia at the close of the last business day of that quarter.
(4) The supplementary statement referred to in sub-regulation (3) shall be in revised Form ZBK No. 5.
6. Rate of conversion of non-Zambian money to Zambian currency to be stated
If in a document furnished to the Registrar in terms of these regulations a sum of money is not stated in the currency of Zambia, the appropriate rate of conversion of the sum of money to Zambian currency shall be stated in the document or in an annexure thereto.
[Regulation 2]
PRESCRIBED FORMS
(b) Liquid Assets; |
|
Form ZBK No. 1 (Revised)
REPUBLIC OF ZAMBIA
BANKING AND FINANCIAL SERVICES ACT
[Section 4]
Banking Regulations
[Regulation 3]
APPLICATION FOR REGISTRATION AS A COMMERCIAL BANK OR A FINANCIAL INSTITUTION
1. Name.................................................................................................................................................................................. (The name under which the applicant(s) wants/want to be registered)
2. Nature of business ............................................................................................................................................................................................................(The business in respect of which the application is made)
3. Address of applicant’s head office ..........................................................................................................................................
4. Address of applicant’s principal administrative office ......................................................................................................................................................................................................
(a) Names of Directors ...........................................................................................................
(b) Names of Local Directors .........................................................................................................................................................................................................................................................................................................................................................................................................................(These must be Zambian citizens and/or established residents of Zambia)
(c) What is the proposed authorised capital and paid-up capital of the Commercial Bank to be registered?
K ......................................
6. In case of a Financial Institution—
(a) What is the proposed authorised capital and paid-up capital of the Financial Institution to be registered?
K ......................................
(b) State the amount of unimpaired reserve funds which the Financial Institution to be registered intends to maintain in K ......................................................................................................................................................................................................................................................................................................................................................................................
7. Name of general manager ..............................................................................................................
8. Name of chief executive officer .......................................................................................................
9. Name of chief accounting officer ....................................................................................................
10. Name and qualifications of applicant’s auditors ....................................................................................................................................................................................................................................................................................................................................................................................................................
11. Please lodge with your application the following documents—
(a) memorandum and articles of Association;
(b) Statement of paid-up capital; and
(c) Certificate of incorporation under the Companies Act of Zambia.
12. I/We hereby certify that to the best of my/our knowledge and belief the information given above is correct and true.
.....................................................................................
Chairman
......................................................................................
Director
......................................................................................
Chief Executive Officer
Form ZBK No. 2 (Revised)
REPUBLIC OF ZAMBIA
BANKING AND FINANCIAL SERVICING
[Section 60(1)(a)]
Banking Regulations
[Regulation 4(1)(a)]
MONTHLY STATEMENT OF—
(a) LIABILITIES TO THE PUBLIC;
(b) LIQUID ASSETS;
OF A COMMERCIAL BANK IN ZAMBIA.
Reporting Commercial Bank ....................................................................................................
Date to which this return refers ...................................................................................., 20......
K
I.
Liabilities to the Public
1. Demand Deposits
.........……………....
2. Savings Deposits
.........……………....
3. Time Deposits
.........……………....
4. Bills payable
.........……………....
.........……………....
TOTAL LIABILITIES TO THE PUBLIC
II.
Liabilities to the Public at the end of the previous month
.........……………....
III.
Liquid assets
.........……………....
(a) Gold coin and bullion
.........……………....
(b) Notes and coins in the currency of Zambia
.........……………....
(c) Balances at the bank of Zambia including the minimum reserve balances referred to in paragraph (b) of sub-section (1) of section 39 of the Bank of Zambia Ordinance No. 33 of 1964
.........……………....
(d) Money at call with any bank
.........……………....
(e) Treasury bills issued by the Government
.........……………....
(f) Bills of exchange and promissory notes eligible for discount at the bank of Zambia
.........……………....
(g) Local registered securities which are issued or guaranteed by the Government and which have a final maturity date of not more than six years (at book value) and such other securities as the Minister may have approved
.........……………....
(h) Items in transit between banks, between branches of banks and between branches of head office of banks
.........……………....
(i) Other assets approved by the Minister under paragraph (e) of sub-section (3) of section 21of the Banking Act, 1971
.........……………....
.........……………....
TOTAL LIQUID ASSETS
.........……………....
Total liquid assets as a percentage of total liabilities to the public
.................. per cent
Total liquid assets (as stated above) as a percentage of total liabilities to the public at the end of the previous month
..................per cent
Form ZBK No. 3 (Revised)
REPUBLIC OF ZAMBIA
BANKING AND FINANCIAL SERVICING
[Sections 60(1)(b) and (c)]
Banking Regulations
[Regulations 4(1)(b), (2) and (3)]
MONTHLY STATEMENT OF ASSETS AND LIABILITIES AND SUPPLEMENTARY STATEMENT OF A COMMERCIAL BANK IN ZAMBIA
Reporting Bank ...........................................................................................................................
(v) Other Sterling Area countries
……………………
(vi) Dollar Area countries
……………………
(vii) Other countries
……………………
5. Government of Zambia Securities (at book value)
6. Other investments in Zambia (at book value)
7. Treasury bills issued by the Government of Zambia
8. Bills of exchange
(b) receivable
……………………
9. Loans and advances to
(a) The public
……………………
(b) Government
……………………
(c) Statutory bodies, municipalities, T.M.B.s, local authorities, etc
……………………
(d) Non-residents
……………………
(e) Parastatal organisations
……………………
10. Balances held with branches
(a) Assets in transit
……………………
(b) Other items
……………………
11. Bank premises
12. Acceptances
13. Other assets
(e) Parastatal organisations
………………….
3. Time deposits
(a) Public deposits
………………….
(b) Government deposits
………………….
(c) Deposits of statutory bodies, municipalities, T.M.B.s, local authorities, etc
………………….
(d) Non-residents’ deposits
………………….
(e) Parastatal organisations
………………….
4. Amounts owing to registered commercial banks in Zambia
(a) Liabilities in transit
………………….
(b) Other items
………………….
5. Amounts owing to banks abroad
(a) Head office/or branches in—
………………….
(i) Britain
………………….
(ii) Zimbabwe
………………….
(iii) Malawi
………………….
(iv) Republic of South Africa
………………….
(v) Other countries
………………….
(b) Other banks in—
………………….
(i) Britain
………………….
(ii) Zimbabwe
………………….
(iii) Malawi
………………….
(iv) Republic of South Africa
………………….
(v) Other Sterling area countries
………………….
(vi) Dollar area countries
………………….
(vii) Other countries
………………….
6. Bills payable
7. Amounts owing to branches
(a) Liabilities in transit
………………….
(b) Other items
………………….
8. Capital
9. Reserves
10. Acceptances
11. Amounts owing to bank of Zambia
12. Other liabilities
TOTAL LIABILITIES
Form ZBK No. 4 (Revised)
REPUBLIC OF ZAMBIA
BANKING AND FINANCIAL SERVICES ACT
(Section 60(1)(a))
Banking Regulations
(Regulation 5(1))
MONTHLY STATEMENT OF—
(a) LIABILITIES TO THE PUBLIC;
(b) CAPITAL; AND
(c) LIQUID ASSETS;
OF A FINANCIAL INSTITUTION IN ZAMBIA
REPORTING FINACIAL INSTITUTION ...............................................................................
DATE OF WHICH THIS RETURN REFERS ......................................................... 20.......
I. Liabilities to the public Deposits repayable
K
(a) At seven days’ notice
(b) At thirty days’ notice
(c) At more than thirty days’ but more than six months’ notice
(d) At more than six months’ but not more than twelve months’ notice
(e) After twelve months’ notice
TOTAL LIABILITIES TO THE PUBLIC
II. Liabilities to the public at the end of the previous month
III. Capital
1. Paid-up equity capital
2. Unimpaired reserve funds
TOTAL CAPITAL
IV. Liquid assets
1. Notes and coins in the currency of Zambia
2. Balances with registered commercial banks in Zambia
3. Money at call with any bank
4. Treasury bills issued by the Government
5. Bills of exchange and promissory notes accepted, endorsed or made, as the case may be, by a bank, maturing in not more than ninety days exclusive of days of grace and payable at any place in Zambia
6. Local registered securities which are guaranteed by the Government and which have a final maturity date of not more than six years and such other securities as the Minister may have approved
TOTAL LIQUID ASSETS
Total liabilities to the public (net of liquid assets) as a percentage of paid-up equity capital and unimpaired reserve funds
............per cent
Total liquid assets as a percentage of total liabilities to the public
............per cent
Total liquid assets (as stated above) as a percentage of total liabilities to the public at the end of the previous month
............per cent
Form ZBK No. 5 (Revised)
REPUBLIC OF ZAMBIA
BANKING AND FINANCIAL SERVICES ACT
[Section 60(1)(b) and (c)]
Banking Regulations
[Regulations 5(2), (3) and (4))
QUARTERLY STATEMENT OF ASSETS AND LIABILITIES AND SUPPLEMENTARY STATEMENT OF A FINANCIAL INSTITUTION IN ZAMBIA
Reporting financial institution............................................................................................................
ASSETS
K
K
1. Notes and coins
2. Balances held with registered commercial banks in Zambia
3. Money at call with any bank
4. Treasury bills issued by the Government of Zambia
5. Amounts owing under agreement for hire purchase under the laws of Zambia
6. Bills receivable
7. Notes receivable
8. Advances
(a) Internal—
………………….
(i) individuals
………………….
(ii) companies
………………….
(b) External
………………….
9. Securities
(a) Of the Government of Zambia
………………….
(b) Of Zambian municipalities
………………….
(c) Other
………………….
10. Other investments
11. Other assets
(a) Buildings and premises
………………….
(b) Other
………………….
TOTAL ASSETS
LIABILITIES
1. Deposits
K
K
(a) Internal—
……………………..
(i) individuals
……………………..
(ii) companies
……………………..
(b) External
……………………..
2. Loans, advances and acceptances
(a) Loans from shareholders—
……………………..
(i) individuals in Zambia
……………………..
(ii) companies in Zambia
……………………..
(iii) external shareholders
……………………..
(b) Other loans, advances and acceptance
……………………..
3. Amounts owing to registered commercial banks in Zambia
4. Other liabilities
(a) Paid-up equity capital—
……………………..
(i) internal
……………………..
(ii) external
……………………..
(b) Other paid-up capital—
……………………..
(i) internal
……………………..
(ii) external
……………………..
(c) Reserves and unappropriated profits
……………………..
(d) Other liabilities
……………………..
TOTAL LIABILITIES
SectionBANKING AND FINANCIAL SERVICES (COST OF BORROWING) REGULATIONS
[Sections 124 and 47]
[Currency mentioned in this regulation should be re-denominated as stipulated under S 4 of Re-denomination Act, 2012, read with S 29 of Bank of Zambia Act, 1996.]
Arrangement of Regulations
Regulation
4. Determination of annual rate of interest
5. Cost of borrowing for loans repayable in equal instalments
7. Disclosure of cost of borrowing
8. Manner of disclosure of information
9. Payment, credit or charge card
10. No charge or penalty for failure to pay
[Regulations by the Minister]
SI 179 of 1995.
These regulations may be cited as the Banking and Financial Services (Cost of Borrowing) Regulations.
In these regulations, unless the context otherwise requires—
“borrower” means a person to whom a loan is proposed to be made;
“cost of borrowing” means administrative charges for services or transactions and any similar changes, but excludes—
(a) a charge for arranging or renewing the loan;
(b) a charge for the issuance of a certificate of search, the provision for examination or the making of copies or a registered document, or the provision of similar services;
(c) a charge for a survey;
(d) a charge or disbursement for the services of a lawyer or notary;
(e) a charge for an appraisal or inspection of assets;
(f) a charge for insurance;
(g) an administrative charge in respect of an overdrawn account, including a charge for honouring a cheque written on an overdrawn account;
(h) a charge for making a pre-payment on the loan; or
(i) a commitment fee as compensation for funds being made available by the lender for use by the borrower and which could be deployed elsewhere.
“principal” means the amount of money borrowed and outstanding at any time, but does not include any portion of the cost of borrowing.
These regulations shall not apply to—
(a) a loan in respect of which the principal amount is less than two-hundred and fifty thousand kwacha and the cost of borrowing on that loan is disclosed to the borrower as an amount expressed in kwacha and ngwee;
(b) a loan made under any Act of Parliament where the rate of interest or the discount that may be charged to the borrower is prescribed under that Act and is disclosed to the borrower;
(c) a loan resulting from the discount or negotiation by a bank or financial institution of a promissory note or other instrument payable by a person other than the borrower; and
(d) a loan made pursuant to a letter of credit.
{mprestriction ids="2,3,5"}
4. Determination of annual rate of interest
(1) For loans obtained through the use of a line of credit, an overdraft, a payment, credit or charge card, a bank or financial institution shall express the rate of interest charged to a customer as “the annual effective rate of interest” or the annual percentage rate (APR).
(2) The annual percentage rate shall be determined as follows—
APR =
| Where: | q = the frequency of compounding in a year, and r = the nominal rate of interest |
5. Cost of borrowing for loans repayable in equal instalments
(1) For loans repayable in equal instalments, the cost of borrowing is determined by the following formula—
where:
“C” is the total cost of borrowing over the term of the loan, expressed as an amount and includes interest plus all other charges of borrowing;
“P” is the average of the principal of the loan that is outstanding at the end of each interest calculation period before applying any payment due at that time;
“R” is the cost of borrowing over the term of the loan, expressed as a rate per annum; and
“T” is the term of the loan, expressed in years.
(2) For the purpose of the calculation set out in sub-regulation (1)—
(a) the rate per annum of the cost of borrowing shall be rounded off to the nearest eighth of a per cent; and
(b) a year shall be calculated as having three-hundred and sixty-five days.
(1) For the purposes of regulations 7 to 9, where information is to be disclosed by means of a written statement, the information shall be delivered to the borrower personally or sent to the last address of the borrower shown in the records of the bank or financial institution.
(2) The statement through which the disclosure is made shall contain the information set out in the Schedule.
7. Disclosure of cost of borrowing
(1) A bank or financial institution shall disclose the cost of borrowing to the borrower, at or before the time at which the loan is made.
(2) The disclosure referred to in sub-regulation (1) shall—
(a) in the case of an overdraft, be made by means of a written statement or by a notice displayed in each branch of the bank or financial institution; and
(b) in the case of a loan made under the security of a letter of credit or any other arrangement, or where the loan is repayable on demand in amounts that are not fixed or on dates that are not fixed, by means of—
(i) a written statement in the loan agreement or proposed loan agreement;
(ii) a separate written statement; or
(iii) a notation on the promissory note signed or to be signed by the borrower; and
(c) in any other case, by means of a written statement disclosing the information set out in the attached Schedule.
(3) Where a loan referred to in paragraph (b) or sub-regulation (2) is made, the bank or financial institution shall also disclose to the borrower in the manner described in clauses (i) to (iii) of that paragraph—
(a) the manner of calculating the cost of borrowing and determining it as a rate per annum; and
(b) in case of a loan made pursuant to a line of credit or other arrangement, the maximum principal that can be borrowed under the line of credit or other arrangement.
(4) Where the cost of borrowing in respect of a loan is subject to variation, the bank or financial institution shall by means of a written statement or by a notice displayed in each branch of the bank or financial institution, and within a reasonable time, disclose to the borrower any variation that affects the amount of any periodic payments to be made by the borrower.
8. Manner of disclosure of information
A bank or financial institution shall disclose to the borrower the information required by sub-section (2) of section 47 of the Act, at or before the time at which the loan is made—
(a) by means of a written statement in the loan agreement or proposed agreement between the bank or financial institution and the borrower; or
(b) through a separate statement in writing,
9. Payment, credit or charge card
(1) A bank or financial institution shall disclose to each holder of a payment, credit or charge card, at or before the time at which the card is issued—
(a) the particulars of the holder’s rights and obligations relating to—
(i) the credit limit authorised under the card and the maximum amount of indebtedness that may be outstanding at any time;
(ii) the period of time for which each statement of account is issued;
(iii) the manner, if any, in which the holder may use the card and avoid any charge;
(iv) the minimum amount, if any, that must be paid at the end of each statement period, which amount may be stated as a percentage of the amount outstanding; and
(v) the maximum amount of the card-holder’s liability for authorised use of the card where it is lost or stolen;
(b) the amount of any charge for which the holder is responsible by reason of accepting or using the card and the manner in which the charge is calculated;
(c) the cost of borrowing and the manner in which it is calculated; and
(d) any charges or penalties to be paid by the borrower as a result of the failure to repay or pay in accordance with the contract governing the loan.
(2) Where a bank or financial institution intends to change any of the matters disclosed to a card-holder in accordance with sub-regulation (1), other than a disclosure under clause (i) of paragraph (a), the bank or financial institution shall send or deliver to the card-holder a written statement of the change at least fourteen days before the effective date of the change.
10. No charge or penalty for failure to pay
(1) A bank or financial institution shall not impose on a borrower any charge or penalty as a result of the failure by the borrower to repay or pay in accordance with the contract governing the loan other than—
(a) interest on an overdue payment on a loan;
(b) legal costs incurred in collecting or attempting to collect a payment on a loan; or
(c) costs, including legal costs, incurred in protecting or realising the security on a loan.
(2) A bank or financial institution shall not impose a charge or penalty on a borrower for making a pre-payment of the principal or an installment of the principal before its due date where—
(a) the amount of the repayment exceeds fifty thousand kwacha or extinguishes the debt;
(b) the loan is made to a natural person; and
(c) the loan is not secured by a mortgage on real property.
A bank or financial institution may disclose an estimate of an amount or of other information required to be disclosed under these regulations instead of the actual amount or information where—
(a) at the time of disclosure, the amount or information is unknown or unavailable to the bank or financial institution;
(b) the bank or financial institution has made all reasonable efforts to ascertain the amount or information;
(c) the estimate is clearly identified as such; and
(d) the estimate is based on the best information available.
[Regulation 6]
CONTENTS OF DISCLOSURE STATEMENT
1. The name and address of the bank or financial institution.
2. The name and address of the borrower.
3. A description of any property to be used as security and its location.
4. A description of any guarantees and/or other collateral.
5. The date when the first payment on the loan is due.
6. In case of a mortgage, whether it is first, second, etc.
7. The principal of the loan, including—
(a) the total amount of all charges to be financed; and
(b) the net amount of money to be paid to the borrower or to be disbursed at the borrower’s direction.
8. The rate of interest expressed as a rate per annum, if that rate does not vary.
9. The initial rate of interest expressed as a rate per annum, if the rate varies from time to time.
10. A description of any factors that would cause the rate of interest to vary.
11. The length of the term of the loan.
12. The period during which an offer letter to a customer is valid, before it expires.
13. A description of any factors that would cause the term of the loan to vary.
14. The total cost of borrowing over the term of the loan, expressed as a rate per annum.
15. A list of each charge to be financed.
16. A description of any terms and conditions applicable to pre-payment of the principal.
17. A description of any charge or penalty that would be imposed for failure to make a payment or to repay the loan when due.
18. The date of the statement.
19. The name and signature of the representative of the bank or financial institution.
BANKING AND FINANCIAL SERVICES (PAYMENT OF FEES) REGULATIONS
[Sections 124, 4, 10, 13 and 22]
[Currency mentioned in this regulation should be re-denominated as stipulated under S 4 of Re-denomination Act, 2012, read with S 29 of Bank of Zambia Act, 1996.]
Arrangement of Regulations
Regulation
6. Penalty for failure to pay a fee
7. Fees and penalties to accrue to bank of Zambia
[Regulations by the Minister]
SI 180 of 1995.
These regulations may be cited as the Banking and Financial Services (Payment of Fees) Regulations.
The fees set out in the schedule, shall be paid in respect of the services set out in that schedule.
Fees payable under these regulations shall be paid by a bank certified cheque, postal order or money order in favour of the bank of Zambia, provided that such payments may be allowed where the fee is delivered by hand.
The fees paid under these regulations shall not be refundable.
(1) A bank or financial institution which is operational during the month of January of a particular year shall pay the annual licence fee not later than the 31st of January of that year.
(2) A bank or financial institution which is registered after the 31st of January of a particular year shall, before the end of the month in which it is so registered, pay a proportion of the annual licence fee equivalent to the number of full months it would be in operation for that year, multiplied by the annual licence fee.
6. Penalty for failure to pay a fee
A bank or financial institution which fails to pay the full amount of the applicable licence fee prescribed for a particular period shall, in addition to such licence fee, pay for each month or part thereof during which it remains in contravention, a penalty calculated at the rate of twenty per centum of the licence fee remaining unpaid from the date the payment became due.
7. Fees and penalties to accrue to bank of Zambia
Fees and penalties collected under these regulations shall accrue to the bank of Zambia and shall be used for the benefit of the bank of Zambia.
[Regulation 2]
Fee Units
1. Application for a licence to conduct banking services
50,000
2. Application for a licence to conduct a regulated financial service business
30,000
3. Annual licence fee-banking business
25,000
4. Annual licence fee-financial service business
15,000
5. Inspection of the Register of Banks and Financial Institutions
10,100
BANKING AND FINANCIAL SERVICES (RETURN OF UNCLAIMED FUNDS) REGULATIONS
[Sections 124 and 76]
[Currency mentioned in this regulation should be re-denominated as stipulated under S 4 of Re-denomination Act, 2012, read with S 29 of Bank of Zambia Act, 1996.]
Arrangement of Regulations
Regulation
2. Annual returns of unclaimed funds
5. Amounts under ten thousand kwacha
[Regulations by the Minister]
SI 181 of 1995.
These regulations may be cited as the Banking and Financial Services (Return of Unclaimed Funds) Regulation.
2. Annual returns of unclaimed funds
A bank or financial institution shall, within sixty days of the end of each calendar year, submit to the Registrar annual returns in the form set out in the First and Second Schedules, in respect of all funds in Zambian currency in that bank or financial institution for which no transaction has taken place and no statement of account has been requested or acknowledged by the person in whose name the funds were being held, for a period of ten years or more.
The period of ten years referred to in regulation 2 shall commence—
(a) in the case of a deposit made for a fixed period, from the day on which the fixed period terminated; or
(b) in the case of other funds, from the day on which the last transaction by customer took place or a statement of account was last requested or acknowledged by the person in whose name the funds were held, whichever is the later.
An annual return made under regulation 2 shall indicate, in so far as is known to the bank or financial institution—
(a) the name of each person for whom funds are held;
(b) the recorded address of each person for whom funds are held;
(c) the classification of funds;
(d) the outstanding amount;
(e) the date on which the bank last transaction took place in respect of the funds; and
(f) the branch of the bank or financial institution in which transactions took place in respect of these funds.
5. Amounts under ten thousand kwacha
The information required under regulation 4 may be excluded from the annual returns when the total amount outstanding in the name of a person is less than ten thousand kwacha.
[Regulation 2]
RETURN OF UNCLAIMED FUNDS
[Section 76(2)]
Name of the Bank.............................................................................................................................................
This return relates to the calendar year ended 31st December, 20...........
1. Total amount of items reported in detail on attached sheets numbered 1 to ........................................... of Second Schedule
K...................................
2. Total of accounts and instruments under K1,000 not reported in detail
K...................................
3. Interest accrued on interest bearing accounts not added to individual accounts
K...................................
4. Total amount of unclaimed funds as at 31st December, 20........
K...................................
We declare that, having regard to the latest information available to us, this return is, to the best of our knowledge and belief, correct according to the books and records of the bank and presents fairly the information required by the Banking and Financial Services Act.
...................................
...................................
Signature
Title
...................................
...................................
Signature
Title
Dates at .............................................................................. this.......................day of........................ 20.....
[Regulation 2]
Return of unclaimed funds (section 76(2)) for calendar year ended 31st December, 20............
Name of bank ..............................................
Name of person
Address
Classification
Amount outstanding
Date
Branch Address
(1) Classify as a, b or c according to the following—
(a) Demand, savings or matured time deposit (section 76 (1)(a));
(b) Funds paid toward the purchasing of a share or other interest in a security issued by the bank (section 76 (1)(b));
(c) Funds or other personal property tangible or intangible removed from a safekeeping facility (section 76 (1)(c)).
BANKING AND FINANCIAL SERVICES (RESERVE ACCOUNT) REGULATIONS
[Sections 69 and 124]
Arrangement of Regulations
Regulation
3. Transfers to a reserve fund
[Regulations by the Minister]
SI 182 of 1995.
These regulations may be cited as the Banking and Financial Services (Reserve Account) Regulations.
In these regulations, unless the context otherwise requires—
“reserve fund” means a fund of a bank or financial institution generated from actual earnings or by way of recoveries, or a surplus on the realization of the scale of capital assets, but does not include any surplus resulting from a revaluation of assets.
3. Transfers to a reserve fund
A bank or financial institution shall maintain a reserve fund and shall, out of its retained earnings of distributable profits from the current financial year, before any dividend is declared, transfer to that fund a sum equal to not less than—
(a) fifty per centum of such profits, whenever the amount of the reserve fund does not exceed half of its paid-up equity capital; or
(b) twenty per centum of such profits or such sum as shall make the amount of the reserve fund equal to the paid-up equity capital, whenever the amount of the reserve fund exceeds half of its paid-up equity capital, but is less than the paid-up equity capital.
BANKING AND FINANCIAL SERVICES (DISCLOSURE OF DEPOSIT CHARGES AND INTEREST) REGULATIONS
[Section 47]
Arrangement of Regulations
Regulation
3. Disclosure of increased charge
4. Maintenance of list of charges
5. Disclosure of interest rates
6. Changes in rate of interest
7. Renewal of fixed term deposit account interest
8. Disclosure of advertisement
[Regulations by the Minister]
SI 183 of 1995.
These regulations may be cited as the Banking and Financial Services (Disclosure of Deposit Charges and Interest) Regulations.
(1) A bank or financial institution shall, by means of a written statement, disclose to its customers and to the public all charges on deposit accounts with that bank or financial institution for any of the following services in respect of such deposit accounts, namely—
(a) acceptance of deposits;
(b) acceptance of coins, cheques or bank of Zambia notes for deposit;
(c) issuance of cheques;
(d) certification of cheques;
(e) handling of a cheque presented or issued by a customer that is subsequently returned because there are no sufficient funds, or for technical reasons such as where words and figures do not agree, etc;
(f) holding of a cheque for deposit;
(g) handling of a cheque or negotiable item, such as a draft or a money order drawn in a foreign currency;
(h) processing of a stop payment on a cheque or other instrument;
(i) handling of overdrafts;
(j) transfers between accounts;
(k) supplying of account statements;
(l) handling of account confirmations;
(m) conducting searches related to an account;
(n) providing information in regard to an account balance; and
(o) closing of an account.
(2) A bank or financial institution shall display and make available copies of the written statement referred to in sub-regulation (1) to customers and to the public at each branch of the bank or financial institution at which such account is kept.
(3) The written statement referred to in sub-regulations (1) and (2) may be in the form of a tariff and shall indicate that the statement—
(a) sets out all charges for services provided in respect of deposit accounts with the bank or financial institution; or
(b) does not set out all of the charges for services in respect of deposit accounts with the bank or financial institution and that charges for services not included in the statement shall be disclosed on request or at the time the service is offered.
3. Disclosure of increased charge
(1) Where a bank or financial institution increases a charge on a service referred to in sub-regulation (1) of regulation 2, it shall disclose the increased charge in a notice:
Provided that this regulation shall not apply to a customer who has agreed in writing that the bank or financial institution shall charge an amount, other than an amount required to be disclosed under sub-regulation (1) or regulation 2.
(2) The notice referred to in sub-regulation (1) shall be displayed for a period of at least thirty days immediately before the effective date of the increase at all branches of the bank or financial institution.
4. Maintenance of list of charges
A bank or financial institution shall—
(a) maintain, at each branch, a list of all charges applicable to deposit accounts and services provided by the bank or financial institution to its customers and to the public; and
(b) on request, make available at each branch the list requested to in paragraph (a) to its customers and to the public for inspection during business hours.
5. Disclosure of interest rates
(1) A bank or financial institution shall disclose to a person who wishes to open an interest bearing deposit account with it, the rate of interest applicable to the account and the manner in which the amount of interest shall be calculated.
(2) The disclosures referred to in sub-section (1) shall—
(a) be in writing, copies of which shall be made available and displayed in each branch of the bank or financial institution where such accounts are kept; or
(b) be made by way of a general notice displayed in each branch of the bank or financial institution where such account is kept.
(3) The disclosure referred to in sub-regulation (1) shall include—
(a) the annual rate of interest;
(b) the frequency of payment of interest;
(c) the manner, if any, in which the balance in the interest bearing deposit account will affect the rate of interest; and
(d) any other circumstances that affects the rate of interest.
6. Changes in rate of interest
Where there is a change in the rate of interest, or in the manner of calculating the amount of interest on an interest bearing deposit account, the bank or financial institution shall disclose the changes by means of—
(a) a written statement, delivered to the person in whose name the account is maintained;
(b) a written statement, copies of which are available and displayed in each branch of the bank or financial institution where such account is kept;
(c) a general notice that is displayed in each branch of the bank or financial institution where such account is kept; or
(d) an advertisement in a daily newspaper.
7. Renewal of fixed term deposit account interest
Where a bank or financial institution renews a fixed term deposit account, it shall disclose the rate of interest and the manner of calculating the amount of interest on the deposit account in accordance with sub-regulation (1) of regulation 5 and clauses (1) and (ii) of paragraph (b) of sub-regulation (2) of regulation 5.
8. Disclosure of advertisement
Where a bank or financial institution makes an advertisement in respect of interest bearing deposits or debt obligations, a bank or financial institution shall disclose how the amount of interest applicable to each deposit and debt obligation shall be calculated by clearly indicating in the advertisement—
(a) in respect of interest-bearing deposits, the manner, if any, by which the balance of the account shall affect the rate of interest;. and
(b) any other circumstances that may affect the rate of interest.
BANKING AND FINANCIAL SERVICES (CAPITAL ADEQUACY) REGULATIONS
[Sections 83 and 84]
[Currency mentioned in this regulation should be re-denominated as stipulated under S 4 of Re-denomination Act, 2012, read with S 29 of Bank of Zambia Act, 1996.]
Arrangement of Regulations
Regulation
4. Minimum capital of a financial institution
5. Application of regulation 4 to subsidiary
7. Determination of regulatory capital
8. Primary or tier-one capital
9. Conditions for securities of subsidiaries to qualify as primary or tier-one capital
10. Secondary or tier-two capital
11. Failure to meet preferred dividend payment not to constitute grounds for bankruptcy
12. Conditions for securities of subsidiaries to qualify as secondary or tier-two capital
13. Qualifications for inclusion in secondary or tier-two capital
14. Bank’s opinion to be sought
15. Submission of state of affairs and results of operations to bank
16. Components of primary or tier-one capital
17. Components of secondary or tier-two capital
18. Deductions from primary or tier-one capital
19. Limitations and restrictions
20. Amortization of outstanding balances
23. Implements of capital adequacy standards
24. Calculation of risk weighted assets
26. Suspension of banks or financial institutions, branch networks, etc.
[Regulations by the Minister]
SI 184 of 1995.
These regulations may be cited as the Banking and Financial Services (Capital Adequacy) Regulations.
In these regulations, unless the context otherwise requires—
“associate” means a company in which more than twenty per cent but not more than fifty per cent of the outstanding voting shares (except any qualifying directors’ shares) are owned directly or indirectly by the reporting bank or financial institution and the business activities and financial affairs of which the reporting bank or financial institution or its subsidiaries are able to materially influence;
“capital deficiency” means a shortfall in the minimum capital required by these regulations;
“common shareholders equity” includes common shares and related contributed surplus, retained earnings, general reserves and the statutory reserve fund;
“goodwill” means the difference between cost and the acquired company’s interest in the identifiable net assets;
“off-balance sheet risks” means all items not shown on the balance sheet where the bank’s or financial institution’s capital is potentially at risk, and includes letters of credit, guarantees, commitments to re-purchase loans or securities, acceptances, performance bonds and other items deemed to constitute credit risk by the bank of Zambia;
“regulatory capital” means instruments comprising the capital resources of a bank or financial institution, and the total of which is used by the bank of Zambia for compliance by a bank or financial institution with the minimum capital standard and for assessing capital adequacy;
“general reserves” means an appropriation of retained earnings to reflect additional potential losses based on an assessment of the bank’s overall situation by management;
“revaluation reserves” means the increment in the recorded or book value of a bank or financial institution’s own premises, fixed assets or long term equity investments arising from a formal revaluation to reflect their current value or an amount closer to their current value than historical cost;
“subordinated debt” means a security which is, by its terms, subordinated in right of payment to all deposit liabilities and all other liabilities of the entity that issued the security other than liabilities that, by their terms, rank equally with, or are subordinated to, that security;
“subsidiary” means a company in which more than fifty per cent of the issued voting shares of the company (except any qualifying director’s shares) are owned directly or indirectly by the reporting bank or artificial institution.
(1) Every bank shall commence operations with primary paid-up capital of not less than two thousand million kwacha, or such other higher amount as may be prescribed by the bank of Zambia from time to time and shall maintain this minimum amount at all times.
(2) A bank which does not meet the minimum capital requirement at the coming into force of these regulations shall enter into negotiations with the bank of Zambia to progressively build up its primary capital to at least one billion, two-hundred and fifty million kwacha by not later than 30th June, 1996, and to two billion by 31st December, 1996.
4. Minimum capital of a financial institution
(1) Every financial institution shall, subject to such other higher amounts as may be prescribed by the bank of Zambia commence operations with primary paid-up capital of not less than, for—
(a) deposit-taking institutions, two thousand million kwacha;
(b) leasing companies, two-hundred and fifty million kwacha; and
(c) other types of financial institutions, an amount prescribed by the supervisory authority, to be not less than twenty-five million kwacha;
and shall maintain that minimum amount at all times.
(2) A financial institution which is operational at the coming into force of these regulations which does not meet the applicable minimum capital requirement at the coming into force of these regulations shall enter into negotiations with the bank of Zambia to progressively build up its primary capital to at least the level prescribed by the bank of Zambia by not later than twelve months after these regulations come into force.
5. Application of regulation 4 to subsidiary
Regulation 4 applies to a bank or financial institution which is a subsidiary of an adequately capitalised bank or other financial institution, irrespective of the amount of control exercised by the holding bank.
(1) Every bank and financial institution shall at all times maintain a minimum total capital equivalent of not less than ten per cent of its total risk-weighted assets and off-balance sheet exposures.
(2) Primary or tier-one capital shall be a minimum of five per cent of the bank’s or financial institution’s total risk-weighted assets.
(3) A bank or financial institution operating at or near the level referred to in sub-regulation (2) but which has serious weaknesses in the quality of its assets, diversification of risk, liquidity or earnings, shall maintain capital levels well in excess of those prescribed in sub-regulation (1).
7. Determination of regulatory capital
(1) In determining which funds should be included in the capital base of a bank or financial institution for purposes of the required minimum capital and for measuring capital adequacy, three criteria shall be considered, namely—
(a) permanence;
(b) being free of mandatory fixed charges against earnings; and
(c) the subordinated legal position to the rights of depositors and other creditors of the bank or financial institution.
(2) Regulatory capital shall be determined in accordance with the Second Schedule.
8. Primary or tier-one capital
For purposes of assessing capital adequacy for regulatory purposes, a bank’s or financial institution’s primary or tier-one capital includes—
(a) common shareholders’ equity; and
(b) the following categories of preferred shares—
(i) perpetual preferrers;
(ii) compulsory convertible preferrers, where conversion to securities which would qualify as primary capital represents the only redemption option; and
(iii) preferrers which have an original term to maturity of twenty years or more, where no redemption occurs within the first ten years, and where the maximum redemption obligation in any one year is restricted to five per cent or less of the original amount.
9. Conditions for securities of subsidiaries to qualify as primary or tier-one capital
Minority interests or common shareholders’ equity attributable to consolidated subsidiaries shall qualify as primary or tier-one capital if they possess the three essential criteria for capital and shall be designated as a legitimate add-on component of the consolidated primary or tier-one capital.
10. Secondary or tier-two capital
For purposes of assessing capital adequacy for regulatory purposes, a bank’s or financial institution’s secondary or tier-two capital includes preferred shares issued by a bank or financial institution which meet the requirements under regulation 13.
11. Failure to meet preferred dividend payment not to constitute grounds for bankruptcy
Failure by a bank or financial institution to meet a preferred dividend payment shall not constitute grounds for bankruptcy, but an omission or an interest payment on any form of debt shall constitute grounds for bankruptcy.
12. Conditions for securities of subsidiaries to qualify as secondary or tier-two capital
Notwithstanding the separate legal status of secondary or tier-two capital, securities of subsidiaries shall qualify for inclusion in consolidated secondary or tier-two capital for measuring capital adequacy for regulatory purposes, provided that—
(a) there are no parent guarantees or other contractual features governing the issue that could in effect rank the investors’ claims equal to or ahead of the claims of depositors; and
(b) they are fully subordinated to the other liabilities of the subsidiary;
(c) they meet the minimum criteria referred to in paragraph (b) of sub-regulations (1) and (3) of regulation (13) for qualifying debentures.
13. Qualifications for inclusion in secondary or tier-two capital
(1) A preferred share shall qualify as secondary or tier-two capital if—
(a) there is subordination to all of the deposit obligations of the bank; and
(b) it has an initial term greater than five years, with no redemptions permitted in the first five years.
(2) A share referred to in sub-regulation (1) may be redeemed before maturity only with the prior written approval of the bank of Zambia.
(3) A loan stock or capital and other subordinated debentures issue shall not be included in secondary capital unless it meets the standards set in sub-regulation (1) and is free of restrictive covenants which could potentially interfere with a bank’s or financial institution’s ability to conduct normal banking operations, such as covenants mandating accelerated redemption in the event of failure to meet particular earnings coverage tests or in the event of missing dividend.
14. Bank’s opinion to be sought
Any bank or financial institution intending to issue capital instruments shall seek the opinion of the bank of Zambia as to whether or not these instruments qualify as capital.
15. Submission of state of affairs and results of operations to bank
(1) For purposes of determining adequacy under these regulations, a bank or financial institution shall submit to the bank of Zambia its state of affairs, and the results of its operations and those of all of its subsidiaries and associates which conduct banking or financial services business.
(2) A bank or financial institution shall provide the bank of Zambia with details of the activities of each subsidiary and associate to enable the bank of Zambia to verify which enterprises, if any, should not be considered.
16. Components of primary or tier-one capital
Primary or tier-one capital includes—
(a) paid-up common shares;
(b) qualifying preferred shares referred to in regulation (8);
(c) contributed surplus (including premium on issues of shares, less any payments of premium on redemption; and capital contribution by shareholders without the issuance of shares);
(d) retained earnings;
(e) general reserves;
(f) statutory reserves; and
(g) minority interests (in the equity of subsidiaries which are less than wholly owned).
17. Components of secondary or tier-two capital
Secondary or tier-two capital is composed of residual financial instruments which possess some of the features of capital and which meet the standards set out in regulation (13) and any other form of capital as may be determined and announced by the bank of Zambia, and includes—
(a) forty per cent of the reserves arising from the revaluation of tangible fixed assets;
(b) subordinated term debt, or loan stock or capital with a minimum original term of maturity of over five years, subject to a straight-line amortization during the last five years leaving no more than twenty per cent of the original amount outstanding in the final year before redemption; and
(c) other instruments or forms of capital which the bank of Zambia may allow:
Provided that no part of accumulated goodwill shall be considered as capital.
18. Deductions from primary or tier-one capital
In determining the amount of available capital for purposes of computing the minimum capital and the capital ratio required under these regulations, the following items shall be deducted from the amount of capital derived under regulations 16 and 17—
(a) goodwill and other intangible assets;
(b) investments in unconsolidated subsidiaries and associates where the bank or financial institution has a direct and indirect ownership of twenty per cent or more;
(c) lending of a capital nature to subsidiaries and associates;
(d) holdings of other banks’ or financial institutions’ capital instrument; and
(e) the value of assets pledged to secure liabilities if such assets are not available to meet the liabilities of the bank or financial institution.
19. Limitations and restrictions
In computing the minimum total capital required under regulation 6—
(a) part of revaluation reserves shall not be considered as primary capital;
(b) the total of secondary or tier-two capital shall be limited to a maximum of one hundred per cent of primary or tier-one capital;
(c) revaluation reserves shall only qualify as secondary capital if—
(i) they relate to the revaluation of long-term investments and immovable fixed assets which have been formally identified as strategic long-term investments by the board of directors of the bank of financial institutions;
(ii) the revaluation is made by an independent appraiser or another appropriate independent party, whose qualifications are considered appropriate by the respective bank’s auditors, at intervals in accordance with the accounting policy of the reporting institution and generally accepted accounting practice;
(iii) the assets being revalued are of a similar nature, e.g., investments in premises, and the revaluation of all such assets is undertaken at the same time;
(iv) a reduction in the value of any such assets is taken into account where current market values are no longer supportive of balance sheet values; and
(v) details of all such revaluations are disclosed in the annual financial statements of the reporting institution.
20. Amortization of outstanding balances
(1) Eligible supplementary capital described in sub-regulation (b) of regulation 17 components shall be subject to straight-line amortization in the final five years prior to maturity or the effective dates governing shareholders’ retraction rights.
(2) When subordinated debentures and qualifying subsidiary debt instruments approach maturity, redemption or retraction, outstanding balances shall be amortized on the basis of the following criteria:
YEARS TO MATURITY
AMOUNT IN CAPITAL INCLUDED
five years or more
100%
four years but less than five years
80%
three years but less than four years
60%
two years but less than three years
40%
one year but less than two years
20%
Less than one year
0%
(1) For the purposes of this regulation, risk assets in relation to a bank or financial institution mean assets that are normally recorded on the balance sheet and obligations which are assumed by the bank or financial institution and which are recorded off-balance sheet.
(2) For the purposes of calculating the risk-weighted capital ratio, risk assets are classified into the following categories—
(a) cash and equivalent items, generally considered riskless, carrying a risk weight of zero per cent;
(b) assets with little risk and a high degree of liquidity, carrying a risk weight of twenty per cent;
(c) assets with a moderate degree of risk and having more credit and liquidity risk than those in paragraphs (a) and (b), carrying a risk weight of fifty per cent;
(d) the remaining assets typically found in the portfolio of a bank or financial institution, carrying a risk weight of one hundred per cent.
(3) Assets and their associated risk weights are as set out in Parts I and II of the First Schedule.
(1) Any guarantees made by a bank or financial institution applicable to the liabilities of a subsidiary and which are already incorporated into the consolidated balance sheet shall be excluded to avoid double counting.
(2) The inclusion for off-balance sheet items shall apply to arms’ length contingent liabilities of the bank or financial institution and its subsidiaries, and shall exclude corresponding inter-company commitments.
23. Implements of capital adequacy standards
The bank of Zambia shall, in implementing capital adequacy standards, do so on an individual institution basis and shall rely on the criteria set out below—
(a) the size of the institution;
(b) the diversification of its assets and liabilities;
(c) degree of risk exposures;
(d) level of profitability; and
(e) management strength including liquidity management.
24. Calculation of risk weighted assets
The total risk-weighted assets of each bank or financial institution shall be determined by multiplying the outstanding book value of its assets, net of allowance for losses and depreciation, by the prescribed risk weight factors of such assets, and aggregating the risk adjusted values of those assets following the format shown in Parts I and II of the First Schedule.
If the bank of Zambia, after conducting a review of both on and off-balance sheet risks, finds that a bank or financial institution has insufficient capital to meet the requirements under regulation 6, the bank of Zambia, in accordance with its powers to correct unsafe and unsound practices under section 77 of the Act, shall direct that such bank or financial institution effect an increase of its capital or a reduction of its assets and off-balance sheet exposures, within a period of three months.
26. Suspension of banks or financial institutions, branch networks, etc.
(1) Any bank or financial institution which, for a continuous period of fourteen days, incurs capital deficiencies shall automatically stop to grant new loans and other credit facilities, including the issuance of letters of credit and guarantees, without the prior approval of the bank of Zambia.
(2) A bank or financial institution to which sub-regulation (1) applies shall have its branch network and all capital expenditures suspended.
(3) The suspension of a bank’s or financial institution’s lending privilege, branch expansion and capital expenditures shall remain in force for as long as the bank or financial institution is unable to increase its capital or reduce its assets or off-balance sheet exposures as directed by the bank of Zambia, or to restructure its balance sheet risks to the satisfaction of the bank of Zambia.
(1) Any director, officer or employee of a bank or financial institution who sanctions or votes for the approval of any loan or credit facility, branch expansion or capital expenditure while the bank remains under suspension as provided under regulations 25 and 26 shall be considered automatically suspended from office.
(2) The suspension referred to in sub-regulation (1) shall be without prejudice to any other punitive measures which may be applied against the director, officer or employee and which have been provided for in the Act.
Every bank and financial institution shall maintain suitable records to facilitate verification of its capital position.
For the purpose of computing its capital position, the principal office of each bank or financial institution in Zambia, all of its branches, agencies, subsidiaries, and associated companies regardless of country of domicile, shall be considered as a single unit.
Every bank and financial institution shall—
(a) submit to the bank of Zambia a monthly report on its capital position within twenty-one days following the reference month, in the form set out in the First and Second Schedules; and
(b) require its external auditors—
(i) to compute its capital position at the end of each financial year taking into account the requirements of the Act and all relevant prudential guidelines and regulations issued by the bank of Zambia; and
(ii) to render a statement to the bank or financial institution on the adequacy or inadequacy of its capital and send a copy to the bank of Zambia.
[Regulations 21 and 24]
PART I
CALCULATION OF RISK-WEIGHTED ASSETS
(1) Risk weight %
(2) Balance (Net
of allowance
for losses)
(K millions)
(3) Risk-
Weighted
assets (1 ´ 2)
(K million)s
ASSETS
Notes and Coins
-Zambian notes and coins
0
-other notes and coins
0
Balances held with the bank of Zambia
-statutory reserves
0
-other balances
0
Balances held with commercial banks in Zambia
-with residential maturity of up to twelve months
20
-with residential maturity of more than twelve months
100
Abroad
-with residential maturity of up to twelve months
20
-with residential maturity of more than twelve months
100
Assets in transit
-from other commercial banks
50
-from branches of reporting bank
20
Investment in debt securities
-treasury bills
0
-other government securities
20
-issued by local Government units
100
-Private securities
100
Bills of exchange
-portion secured by cash or treasury bills
0
-others
100
Loans and advances
-portion secured by cash or treasury bills
0
-loans to or guaranteed by the Government of Zambia
50
-loans repayable in instalments and secured by a mortgage on owner-occupied residential property
50
-loans to or guaranteed by local Government units
100
-loans to parastatals
100
Inter-bank advances and loans/advances guaranteed by other banks
-with a residual maturity of twelve months
20
-with a residual maturity of more than twelve months
100
Bank premises
100
Acceptances
100
Other assets
100
Investment in equity of other companies
100
Total risk-weighted assets
....................
....................
(on-balance sheet)
....................
....................
PART II
OFF-BALANCE SHEET OBLIGATIONS
(1)
Risk weight %
(2)
Balance (Net of allowance for losses)
(K millions)
(3)
Risk-
Weighted assets (1 ´ 2)
(K million)s
Letters of Credit
-sight import Letters of credit
20
-portion secured by cash/treasury bills
0
-standby letters of credit
100
-portion secured by cash/treasury bills
0
-export Letters of credit confirmed
20
Guarantees and indemnities
-guarantees for loans, trade and securities
100
-portion secured by cash/treasury bills
0
-performance bonds
50
-portion secured by cash/treasury bills
0
-securities purchased under resale agreement
100
-other contingent liabilities
100
-net open position in foreign currencies
100
Total risk-weighted assets
....................
....................
(off-balance sheet)
Total risk-weighted assets
....................
....................
(on- and off-balance sheets)
....................
....................
[Regulation 7]
COMPUTATION OF CAPITAL POSITION
As at..............................................................
Name of bank/financial institution
..............................................................
I. Primary (tier-one) capital
(K millions)
(a) paid-up common shares
................................................
(b) eligible preferred shares
................................................
(c) contributed surplus
................................................
(d) retained earnings
................................................
(e) general reserves
................................................
(f) statutory reserves
................................................
(g) minority interests (common shareholders’ equity
................................................
(h) sub-total
................................................
Less
(i) goodwill and other intangible assets
(j) investments in unconsolidated subsidiaries and associates
(k) lending of a capital nature to subsidiaries and associates
(l) holding of other bank’s or financial institution’s capital instruments
(m) assets pledged to secure liabilities
(n) Sub-total
(o) total primary capital (h-n)
II. Secondary (teir-2) capital
(a) eligible preferred shares (regulations 13 and 17)
(b) eligible subordinated term debt (regulation 23 (b))
(c) eligible loan stock\capital (regulation 23 (b))
(d) revaluation reserves (regulation 23 (a))
(e) other (regulation 23 (c)) specify
(f) total secondary capital
III. Eligible secondary capital
(the maximum amount of secondary capital is limited to one hundred per cent of primary capital)
IV. Eligible total capital (I (o) + III)
(Regulatory capital)
V. Minimum capital requirement:
(ten per cent of total on- and off-balance sheet risk-weighted assets as established in the First Schedule, or K two thousand million, whichever is the higher)
VI. Excess (deficiency) (IV minus V)
BANKING AND FINANCIAL SERVICES (FIXED ASSETS INVESTMENT) REGULATIONS
[Section 124]
Arrangement of Regulations
Regulation
3. Prohibition of investments without bank of Zambia approval
4. Approval before investment in fixed assets
6. Fixed assets to be booked at cost
7. Method of depreciation of assets
9. Penalty for contravening regulations
[Regulations by the Minister]
SI 185 of 1995.
These regulations may be cited as the Banking and Financial Services (Fixed Assets Investment) Regulations.
In these regulations, unless the context otherwise requires—
“fixed assets of a bank or financial institution” include bank premises (including land), furniture, fixtures, equipment and vehicles, whether such assets are owned or leased, and any leasehold improvements;
“primary capital” includes—
(a) paid up common shares;
(b) the following qualifying preferred shares;
(i) perpetual preferreds;
(ii) compulsory convertible preferreds, where conversion to securities which would qualify as primary capital represents the only redemption option; and
(iii) preferreds which have an original term to maturity of twenty years or more, where no redemption occurs within the first ten years, and where the maximum redemption obligation in any one year is restricted to five per cent or less or the original issued amount;
(c) contributed surplus (including premium on issues of shares, less any payments of premium on redemption; and capital contribution by shareholders without the issuance of shares);
(d) retained earnings;
(e) general reserves;
(f) statutory reserves; and
(g) minority interests (in the equity of subsidiaries which are less than wholly owned).
“secondary capital” means residential financial instruments that possess some of the features of capital and which meet the standards set out in regulation 13 of the Banking and Financial Services (Capital Adequacy) Regulations, and any other form of capital as may be determined and announced from time to time by the bank of Zambia, and, subject to a limit which shall not exceed one hundred per cent of primary capital and includes the following—
(a) forty per cent of the reserves arising from the revaluation of tangible fixed assets;
(b) subordinated term debt, or loan stock or capital with a minimum original term of maturity of over five years, subject to a straight-line amortization during the last five years leaving no more than twenty per cent of the original amount outstanding in the final year before redemption;
(c) other instruments or forms of capital which the bank of Zambia may allow, provided that no part of accumulated goodwill shall be considered as capital;
“regulatory capital” means those instruments which comprise the capital resources of a bank or financial institution, and the total of which is used by the bank of Zambia for compliance by a bank or financial institution with the minimum capital standard and for assessing capital adequacy, and is calculated in accordance with the Second Schedule of the Banking and Financial Services (Capital Adequacy) Regulations.
3. Prohibition of investments without bank of Zambia approval
A bank or financial institution shall not, without the approval of the bank of Zambia—
(a) invest directly in fixed assets;
(b) invest in the stock, bonds, debentures or obligations of any corporation holding the fixed assets of such bank or financial institution; or
(c) make loans to or on the security of the stock of any such corporation;
if the aggregate of all such investments and loans exceed the amount of the regulatory capital of such bank or financial institution.
4. Approval before investment in fixed assets
A bank or financial institution shall obtain the approval of the bank of Zambia before making any investment in fixed assets which will result in all such investments exceeding the amount of its regulatory capital.
Where a bank or financial institution whose fixed assets exceed regulatory capital at the coming into force of these regulations, such excess shall be covered, within a reasonable period of time to be determined by the bank of Zambia, either by a reduction of such assets or an increase in the capital which will result in its fixed assets being in compliance with these regulations.
6. Fixed assets to be booked at cost
All fixed assets acquired by a bank or financial institution shall be booked at cost, and shall be stated in the balance sheet of the bank or financial institution at cost less accumulated depreciation or amortization.
7. Method of depreciation of assets
For book purposes, a bank or financial institution shall depreciate assets over their useful life, using a straight line method.
(1) A bank or financial institution shall capitalise all leases relating to fixed assets in its report to the bank of Zambia.
(2) In reports to the bank of Zambia, the Bank shall require that the amount of all leases pertaining to fixed assets obligations be capitalised.
(3) The amount capitalised under sub-regulation (2) shall be the present value of the minimum required payments over the non-cancellable term of the lease and the rate of interest shall be not more than the bank or financial institution’s prime lending rate.
9. Penalty for contravening regulations
A bank or financial institution which contravenes these regulations shall be liable to a penalty of one thousand penalty units per day for the period during which the contravention continues.
(1) A bank or financial institution shall report, twice a year to the bank of Zambia, as at the end of June and December, the amount of its fixed assets and how these relate to regulatory capital.
(2) The report referred to in sub-regulation (1) shall be made in the form set out in the Schedule.
[Regulation 2]
STATEMENT OF INVESTMENTS IN FIXED ASSETS OF A BANK OR FINANCIAL INSTITUTION INCORPORATED IN ZAMBIA
Name of Bank/Financial Institution
(K’000)
.............................................................................................
At close of business .......................................... on 20......
1. Total regulatory capital
(As calculated by using the Second Schedule of the Banking and Financial Services (Capital Adequacy) Regulations. Attach calculation.
..................
..................
2. Fixed assets—
(a) bank premises (including land)
..................
(b) furniture and fixtures
..................
(c) Equipment
..................
(d) Vehicles
..................
(e) leasehold improvements
..................
(f) other
..................
Total
..................
3. Investments in corporation holding fixed assets of the reporting bank or financial institution—
(a) Stock
..................
(b) Bonds
..................
(c) Debentures
..................
(d) Obligations
..................
Total
..................
4. Advanced/loans made to or on the security of the stock of the reporting bank or financial institution—
(a) Advances
..................
(b) Loans
..................
Total
..................
5. Total investment in fixed assets (Items 2 + 3 + 4)
..................
6. Total regulatory capital (line 1) a percentage of fixed assets (line 5)
..................
Authorised Signature........………….. Authorised Signature .......................
BANKING AND FINANCIAL SERVICES (INSIDER LENDING) REGULATIONS
[Sections 73 and 124]
[Currency mentioned in this regulation should be re-denominated as stipulated under S 4 of Re-denomination Act, 2012, read with S 29 of Bank of Zambia Act, 1996.]
Arrangement of Regulations
Regulation
11. Renewal of loan, advance or extension of credit
12. Penalty for non-compliance
[Regulations by the Minister]
SI 97 of 1996.
These regulations may be cited as the Banking and Financial Services (Insider Lending) Regulations.
In these regulations, unless the context otherwise requires—
“control” in relation to a company, bank or financial institution means a situation where one or more persons, acting in concert, directly or indirectly—
(a) own, control, or have the power to vote twenty-five per centum or more of any class of voting shares of another person;
(b) control in any manner the election of a majority of the directors of a company, bank or financial institution; or
(c) have the power to exercise controlling influence over the management policies of a company, bank or financial institution;
but does not include a person who has control or ability to exercise a controlling influence over the management policies of a company, bank or financial institution solely by virtue of his position as an officer or director of the company, bank or financial institution;
“director” means—
(a) any person who occupies the position of a director in accordance with the Companies Act;
(b) any director of a bank or financial institution, whether or not receiving compensation;
(c) any director of a holding company of which the bank or financial institution is a subsidiary;
(d) any director of any other subsidiary of a holding company of a bank or financial institution; or
(e) any person who participates, or who has the authority to participate, other than in that person’s capacity as a director, in major policy making functions of a company, bank, or financial institution, whether or not—
(i) that person is an employee of the company, bank or financial institution; or
(ii) that person is serving without a salary or compensation.
“holding company” in relation to a bank or financial institution means any company which has control over a bank or financial institution;
“immediate family” means the spouse and children of a person;
“insider” means—
(a) any officer, director or principal shareholder of a company, bank or financial institution;
(b) any person who participates or has the authority to participate in major policy-making functions of a company, bank or financial institution whether employed or not by that institution;
(c) a company where an insider of a bank or financial institution owns, directly or indirectly, alone or together with one or more other insiders, more than twenty per centum of the shares of the company or exercises control over the management of the company; or
(d) a company where the bank or financial institution owns more than ten per centum of the outstanding shares of the company or, in the opinion of the bank of Zambia, is likely to exercise influence over the management of the company;
“large loan” means an exposure of a bank or financial institution to any person in an amount equal to, or exceeding, ten per centum of the bank’s or financial institution’s regulatory capital;
“loans and extensions of credit” means—
(a) any direct or indirect advance of funds to an insider—
(i) made on the basis of any obligation of that insider to repay the funds; or
(ii) repayable from specific property pledged by that insider or by any other person on behalf of that insider;
(b) all credit risk arising from actual claims, potential claims of all kinds and credit substitutes; or
(c) commitments to extend credit and any commitment to acquire a debt security or other right to payment of a sum of money;
“principal shareholder” means a person that directly or indirectly, or acting through or in concert with one or more persons, owns, controls or has the power to vote more than ten per centum of any class of voting shares of a company, bank or financial institution;
“regulatory capital” means those instruments which comprise the capital resources of a bank or financial institution, and the total of which is used by the bank of Zambia for compliance by a bank or financial institution with the minimum capital standard and for assessing capital adequacy, and is calculated in accordance with the Second Schedule to the Banking and Financial Services (Capital Adequacy) Regulations;
“related interest” means a company that is controlled by a person, the funds or services of which will benefit that person;
“subsidiary” means any company which is controlled by another company, bank or financial institution.
These regulations shall apply to—
(a) all banks and financial institutions licenced under the Act, and all directors and principal shareholders of these banks and financial institutions;
(b) the holding company of which a bank or financial institution is a subsidiary, and to any other subsidiary of that holding company;
(c) any company included within the meaning of an insider as defined in these regulations; and
(d) a political or campaign committee that benefits or is controlled by an insider.
A bank or financial institution shall not make a loan or extend credit to any of its directors, principal shareholders or any related interest of that person or to any persons included within the meaning of an insider as defined in these regulations, unless the loan, advance or extension of credit—
(a) is made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions by the bank or financial institution with other persons that are not covered by these regulations and who are not employed by the bank or financial institution; and
(b) does not involve more that the normal risk of repayment.
A bank or financial institution shall not extend credit to any insider or the insider’s related interest, when—
(a) the aggregate of any new and outstanding loans, advances or extensions of credit to that person and his related interests exceeds ten per centum of the bank’s or financial institution’s regulatory capital; or
(b) the aggregate of all loans, advances or extensions of credit, including any proposed new extension of credit, to all insiders and their related interests, exceeds one hundred per centum of the bank’s or financial institution’s regulatory capital.
(1) A bank or financial institution shall not make any loans, advances or extensions of credit to any of its directors, or principal shareholders or to any related interest of that person if the aggregate of any new extension of credit and all outstanding loans and extensions of credit to that person and his related interests exceeds five per centum of that bank’s or financial institution’s regulatory capital unless—
(a) all outstanding amounts of loans or extensions of credit have first been acknowledged, in writing, by the board of directors of the bank or financial institution;
(b) the new loans or extensions of credit have been approved in advance by a majority of the members of the board of directors of the bank or financial institution; and
(c) the interested party has abstained from participating directly or indirectly in the voting.
(2) Any participation in the discussion, or any attempt to influence the voting by the board of directors of a bank or financial institution regarding a loan, advance or extension of credit to any director, principal shareholder, or to any related interest of that person shall constitute indirect participation in the voting by the board of directors and shall nullify the authorization by the board of directors of the loan, advance or extension of credit.
The total amount of credit extended by a bank or financial institution to a partnership shall be deemed to be extended to any member of the partnership.
Any director of a bank or financial institution who becomes indebted to any bank or financial institution other that the bank or financial institution of which he is a director, in an aggregate amount greater than five per centum of the regulatory capital of the bank or financial institution of which he is a director shall, within ten days from the date the indebtedness reached that level, make a written report to the board of directors of the bank or financial institution of which he is a director, which report shall state—
(a) the lender’s name;
(b) the date of the loan;
(c) the amount of the loan, advance or extension of credit;
(d) the intended use of the proceeds;
(e) the source of repayment; and
(f) security pledged as collateral.
Any loan, advance or extension of credit by a bank or financial institution to an insider shall be approved in advance, and in writing, by a majority of the members of the board of directors of the bank or financial institution or by a special committee consisting of a majority of the members of the board of directors specially constituted for that purpose.
(1) Every bank or financial institution shall—
(a) submit to the bank of Zambia within ten working days following its month-end, in the Form prescribed in the Schedule, a monthly report of its insider loans;
(b) if requested by the bank of Zambia submit further detailed information on all or any outstanding exposure to an insider; and
(c) report to the bank of Zambia any loan, advance or extension of credit which is outstanding to an insider—
(i) where that loan, advance or extension of credit is outstanding on the date of coming into force of the regulations and that loan, advance or extension of credit has a balance owing that would have contravened these regulations if the loan had been made on or after the date of the coming into force of these regulations;
(ii) if the aggregate of the loans or extensions of credit to insiders exceeds the maximum amount authorised under regulation 5.
(2) The report referred to in sub-regulation (1) shall be made not later than twenty-one days from the date these regulations come into force and shall set out details of the exposure and a period, not exceeding one year, within which the exposures shall be brought within the limits set by regulation 5.
11. Renewal of loan, advance or extension of credit
Any renewal of a loan, advance or extension of credit on or after the date of coming into force of these regulations shall be made only on such terms as shall bring the facility into compliance with the limits prescribed by regulation 5.
12. Penalty for non-compliance
(1) A bank or financial institution which contravenes these regulations shall be guilty of an offence and liable, for every day that the contravention continues, to a fine assessed by the bank of Zambia not exceeding six-hundred penalty units or, on conviction, to a fine not exceeding the fine prescribed in the Act, and all its insiders, including directors and shareholders, and any person concerned in the management of the bank or financial institution shall be personally liable to the same fine and, upon conviction, to imprisonment for a term not exceeding two years, or both.
(2) Any director or any person referred to in sub-regulation (1) shall, in addition to the penalties prescribed in that sub-regulation, be liable for removal from office and barred from holding office in the banking and financial sector.
[Regulation 10]
BANK OF ZAMBIA INSIDER LENDINGEXPOSURE REGULATIONS
Name of Borrower
Relationship to Institution
Loans, Advances and Extensions of Credit Authorised K’Millions
As a % of Regulatory Capital
Amount Outstanding K’Millions
As a %of Regulatory Capital
Rate of Interest %
Interest Capitalised Included in Amounts Outstanding K’Millions
Expiry Date of Facility
Security
Total
BANKING AND FINANCIAL SERVICES (LARGE LOAN EXPOSURES) REGULATIONS
[Sections 73 and 124]
[Currency mentioned in this regulation should be re-denominated as stipulated under S 4 of Re-denomination Act, 2012, read with S 29 of Bank of Zambia Act, 1996.]
Arrangement of Regulations
Regulation
5. Limit on exposures to a common enterprise
6. Limit on the aggregate of large loans exposures
7. Exceptions, exemptions and other limits
9. Interest or discount on loans
10. Combining of loans to separate borrowers
13. Compliance with limits of these regulations
14. Penalty for non-compliance
[Regulations by the Minister]
SI 96 of 1996.
These Regulations may be cited as the Banking and Financial Services (Large Loan Exposures) Regulations.
In these regulations, unless the context otherwise requires—
“common enterprise” means—
(a) two or more persons constituting a single risk arising from the direct or indirect control of one of those persons over the others; or
(b) two or more persons having no relationship of control over one another, but who constitute a single risk as a result of being interconnected to the extent that if one of them experienced financial problems, the other or all of them would, in the opinion of the bank of Zambia encounter repayment difficulties;
“control” in relation to a common enterprise, means a situation where—
(a) one or more persons acting in concert, directly or indirectly, own, control or have the power to vote twenty-five per centum or more of any class of voting shares of another person;
(b) one or more persons, acting in concert, control in any manner, the election of a majority of the directors, trustees, or other persons exercising similar functions, of another person; or
(c) any circumstances exist which indicate that one or more persons acting in concert, directly or indirectly, exercise a controlling influence over the management, policies or affairs of another person;
“corporate group” means—
(a) a corporation and all its subsidiaries; or
(b) a subsidiary of any person which directly or indirectly owns or controls more than fifty per centum of the voting shares of a corporation;
“large loan” means an exposure of a bank or financial institution to any person or common enterprise which equals or exceeds ten per centum of the bank’s or financial institution’s regulatory capital;
“loans and extension of credit” means—
(a) any direct or indirect advance of funds to a person or common enterprise—
(i) made on the basis of an obligation of that person or common enterprise to repay the funds; or
(ii) repayable from specific property pledged by, or on behalf of, a person or common enterprise;
(b) all credit risk arising from actual claims, potential claims of all kinds and credit substitutes; or
(c) commitments to extend credit and any commitment to acquire a debt security or other right to payment of a sum of money;
“regulatory capital” means those instruments which comprise the capital resources of a bank or financial institution, and the total of which is used by the bank of Zambia for compliance by a bank or financial institution with the minimum capital standard and for assessing capital adequacy, and is calculated in accordance with the Second Schedule to the Banking and Financial Services (Capital Adequacy) Regulations.
These regulations shall apply to all banks and financial institutions licensed under the Act, and which accept deposits, money market instruments or the equivalent of deposits or money market instruments.
A bank or financial institution shall not incur an exposure to any single person in an amount which, in the aggregate, exceeds twenty-five per centum of the bank’s or financial institution’s regulatory capital.
5. Limit on exposures to a common enterprise
Where a loan or an extension of credit has been made to a common enterprise, the total exposure of the bank or financial institution to that group shall be aggregated and considered as a single exposure and shall not exceed, in the aggregate, twenty-five per centum of the bank’s or financial institution’s regulatory capital.
6. Limit on the aggregate of large loans exposures
Notwithstanding the limits prescribed in regulations 4 and 5, a bank’s or financial institution’s large loans exposures to persons and common enterprises shall not exceed, in the aggregate, six-hundred per centum of the bank’s or financial institution’s regulatory capital.
7. Exceptions, exemptions and other limits
(1) There shall be no limits on loans and extensions of credit to the Government.
(2) There shall be a limit of fifty per centum of the bank’s or financial institution’s regulatory capital on loans and extensions of credit to the following organisations—
(a) a foreign government, its agencies and instrumentalities; and
(b) the International Monetary Fund and the World Bank.
(3) The limit referred to in sub-regulation (2) shall apply to the aggregate of the loans and extensions of credit to each of the organisations referred to in that sub-regulation.
(4) In the case of loans, advances and extensions of credit in the inter-bank market—
(a) there shall be no limit where the inter-bank exposure is fully secured by the Government, including treasury bills and Government bonds with a residual maturity of less than one year.
(b) a bank or financial institution may grant another bank or financial institution a loan and an extension of credit on the security of a Government bond with a residual maturity of one year, but not more than five years, for any amount not exceeding seventy-five per centum of the face value of the pledged securities; and
(c) there shall be an exposure limit of fifty per centum of a bank’s or financial institution’s regulatory capital in respect of unsecured exposures.
(5) The loans, advances or extensions of credit referred to in sub-regulation (4) shall comprise repayment terms which shall not exceed five working days.
(6) Any treasury bills and Government bonds pledged as security against loans, advances or extensions of credit shall be deducted from the bank’s or financial institution’s holdings reported to the bank of Zambia and shall not be counted towards the calculation of the minimum liquidity requirements of the bank.
Where a bank or financial institution agrees with one or more other banks or financial institutions to collectively make a loan or extend credit to a person, only that portion of the loan or credit which is actually advanced by the bank or financial institution and representing its pro rata share of the syndicated loan shall be subject to the loan limits prescribed by regulations 4, 5, 6 and 7.
9. Interest or discount on loans
The lending limits prescribed by regulations 4, 5, 6 and 7 shall not apply to any portion of a loan, advance or extension of credit that represents accrued or discounted interest, unless such interest has been capitalised or is, in any other manner, converted to principal.
10. Combining of loans to separate borrowers
The bank of Zambia shall have the authority—
(a) to determine whether or not, and if so determined, when a loan, advance or extension of credit made to one person shall be attributed to, or combined with, those of another person;
(b) to combine the loans, advances or extensions of credit of one or more persons with those of another person when—
(i) the proceeds of the loans or extensions of credit are used for the direct benefit of the other person;
(ii) a common enterprise is deemed to exist between the persons.
All large loans, advances and extensions of credit together with any other loans, advances or extensions of credit which, added to an already existing facility equals or exceeds ten per centum of a bank’s or financial institution’s regulatory capital shall be approved in advance, and in writing, by a majority of the members of the board of directors of the bank or financial institution or a special committee consisting of a majority of the members of that board specially constituted for that purpose.
Every bank or financial institution shall—
(a) within ten days following its month-end and in the Form prescribed in the Schedule, submit to the bank of Zambia a monthly report of its large loans; and
(b) if requested by the bank of Zambia, submit further detailed information on all or any other credits.
13. Compliance with limits of these regulations
(1) Every loan, advance or extension of credit which is outstanding on the coming into force of these regulations and which would violate these regulations if the loan, advance or extension of credit was made after that date shall be reported to the bank of Zambia not later than twenty-one days following the coming into force of these regulations.
(2) Subject to sub-regulation (3), the report referred to in sub-regulation (1) shall set out the details of the loan, advance or extension of credit and a period, not exceeding one year or such other period as may be provided for in the original loan agreement, within which to progressively bring the loan, advance or extension of credit within the limits of these regulations.
(3) Notwithstanding sub-regulation (2), any renewal of a loan, advance or extension of credit done on or after the effective date of these regulations shall be made only on such terms as shall bring the renewal of a loan, advance or extension of credit into compliance with the limits of these regulations.
14. Penalty for non-compliance
(1) A bank or financial institution which contravenes these regulations shall be guilty of an offence and liable, for every day during the contravention continues, to a fine assessed by the bank of Zambia not exceeding six-hundred penalty units or, on conviction, to a fine not exceeding the fine prescribed in the Act, and every director, and any person concerned in the management of the bank or financial institution shall be personally liable to the same fine, or upon conviction, to imprisonment for a term not exceeding two years, or both.
(2) Any director or any person referred to in sub-regulation (1) shall, in addition to the penalties prescribed in that sub-regulation, be liable for removal from office and barred from holding office in the banking and financial sector.
[Regulation 12]
BANK OF ZAMBIA LARGE LOAN EXPOSURES REGULATIONS
Reporting bank:
Month ending:
Regulatory capital (item IV of regulatory capital calculation): K
Name of borrower
Relationship to institution
Loans, advances and extensions of credit authorised K’ millions
As a % of regulatory capital
Amount outstanding K’ millions
As a % of regulatory capital
Rate of interest %
Interest capitalised included in amounts outstanding K’millions
Expiry Date of facility
Security
Status current\non-current
Total
BANKING AND FINANCIAL SERVICES (FOREIGN EXCHANGE RISK MANAGEMENT AND EXPOSURE) REGULATIONS
[Section 124]
Arrangement of Regulations
Regulation
4. Foreign exchange risk management plan
5. Foreign exchange risk management policies
6. Foreign exchange risk management and control procedures
7. Foreign exchange exposure limits
[Regulations by the Minister]
SI 57 of 1996.
These regulations may be cited as the Banking and Financial Services (Foreign Exchange Risk Management and Exposure) Regulations.
In these regulations, unless the context otherwise requires—
“currency” means the legal tender of any country and includes precious metals and other similar tradable commodities;
“fixed forward contract” means a foreign exchange bought or sold forward in advance for delivery on a fixed value date longer than spot, at a pre-determined specified rate of exchange;
“option forward contract” means a forward exchange contract which gives the counterparty the right to exercise the contract over a defined period instead of solely on one value date;
“foreign exchange option contract” means a contract which gives the holder the right, but not the obligation, to sell or buy an agreed sum of money on an agreed date, or at any time between agreed dates at an agreed price or rate, on payment of a non-refundable fee or premium to the writer of the option;
“long position” means the excess of assets over liabilities in a particular currency;
“net forward position” means all amounts to be received less all amounts to be paid in the future as a result of foreign exchange transactions which have already taken place;
“open position” means a situation where assets in a particular currency do not equal liabilities in that currency, including unhedged forward commitments to purchase or sell the currency;
“overnight position” means the holdings of any open positions in foreign currencies of a bank or financial institution at the close of each business day;
“regulatory capital” means those instruments which comprise the capital resources of a bank or financial institution, and the total of which is used by the bank of Zambia for compliance by a bank or financial institution with the minimum capital standard and for assessing capital adequacy, and is calculated in accordance with the Second Schedule to the Banking and Financial Services (Capital Adequacy) Regulations;
“short position” means the excess of liabilities over assets in a particular currency;
“sport exchange rate” means the latest market price for a currency;
“spot foreign exchange contract” means an agreement with a counterparty to buy or sell a given amount of one currency against the agreed counter value of another, usually for settlement in two working days’ time.
These regulations shall apply to all banks and financial institutions licensed under the Act.
4. Foreign exchange risk management plan
(1) Every bank or financial institution shall manage its foreign exchange risk exposures within the framework of a comprehensive risk management plan, setting out its policies, procedures and other safeguards necessary to prudently manage and control exposure to foreign exchange risk.
(2) The risk management plan referred to in sub-regulation (1) shall be drawn in the context of other risks and considerations and shall—
(a) take into account the ability of the bank or financial institution to absorb a potential loss;
(b) at a minimum, include—
(i) the establishment and implementation of sound and prudent foreign exchange risk management policies; and
(ii) the development and implementation of appropriate and effective foreign exchange risk management and control procedures.
(3) The policies and control procedures referred to in sub-regulation (2) shall be reviewed and reassessed at least once in a year and shall be submitted to the board of directors of the bank or financial institution for review and approval.
(4) The bank or financial institution shall, after the policies and control procedures referred to in sub-regulation (3) have been dealt with by its board of directors in accordance with that sub-regulation, refer them to the bank of Zambia.
5. Foreign exchange risk management policies
(1) Every bank or financial institution engaged or proposing to engage in foreign exchange activities shall set forth in its risk management plan a well-articulated policy of the objectives of its foreign exchange risk management strategy, and shall include, at a minimum—
(a) a statement of risk principles and objectives governing the extent to which the bank or financial institution is willing to assume foreign exchange risk;
(b) subject to the limits specified in regulation 7, explicit and prudent limits on the bank’s or financial institution’s exposure to foreign exchange risk;
(c) the currency or currencies in which the institution is prepared to incur exposure; and
(d) clearly defined levels of delegation of trading authorities.
6. Foreign exchange risk management and control procedures
(1) Every bank or financial institution engaged or proposing to engage in foreign exchange activities shall—
(a) as part of its risk management plan, develop, implement and oversee procedures to manage and control foreign exchange risk in accordance with its foreign exchange risk management policies; and
(b) be of a level of sophistication commensurate with the size, frequency and complexity of the institution’s foreign exchange activities.
(2) The foreign exchange risk management and control procedures referred to in sub-regulation (1) shall include, at a minimum—
(a) the use of accounting and management information systems to measure, monitor and reconcile, on a daily basis, foreign exchange positions, foreign exchange risk and foreign exchange gains or losses;
(b) regular monitoring and reporting techniques to senior management;
(c) controls governing the management of foreign currency activities; and
(d) regular independent inspections or audits to assess compliance with, and the integrity of, the foreign exchange policies and procedures.
7. Foreign exchange exposure limits
A Bank or financial institution’s foreign exchange positions and exposures shall be calculated in accordance with the First, Second and Third Schedules.
(1) The bank of Zambia may, where it considers that the financial institution of a bank or financial institution warrants a lower limit, prescribe such lower limit as it may consider appropriate.
(2) Notwithstanding sub-regulation (1), every bank or financial institution shall—
(a) maintain its overall foreign exchange risk exposure as at the close of each business day to a maximum of twenty-five per centum of its regulatory capital; and
(b) ensure that its intra-day overall foreign exchange risk exposure is maintained within the objectives set out in its risk management policies and managed prudently and responsibly;
Provided that at no time shall the total of the foreign exchange risk exposure exceed forty per centum of the bank’s or financial institution’s regulatory capital.
(1) The bank of Zambia may, where it considers that the financial situation of a bank or financial institution warrants a lower limit, prescribe such lower limit as it may consider appropriate.
(2) Notwithstanding sub-regulation (1), every bank or financial institution shall—
(a) maintain its foreign exchange risk position as at the close of each business day in any single currency to a maximum of twenty per centum of its regulatory capital; and
(b) ensure that its intra-day foreign exchange risk position in any single currency is maintained within the objectives set out in its risk management policies and managed prudently and responsibly:
Provided that at no time shall the total in any single currency exceed thirty per centum of the bank’s or financial institution’s regulatory capital;
(3) In this regulation—
“overall foreign exchange risk exposure” means the sum of the domestic currency equivalent amount, currency by currency, of all foreign currency denominated assets and liabilities, including the net forward or off-balance sheet currency, of all net short and net long positions in currencies in which the bank or financial institution has positions, at the currently prevailing spot foreign exchange rates in connection with which the bank or financial institution shall be subject to gain or loss if there is a variation in the exchange rate of these currencies.
“foreign exchange risk” in any given single currency is the domestic currency equivalent amount, including the net forward position in that currency, at the currently prevailing spot foreign exchange rate of the foreign currency amount in connection with which the bank or financial institution will be subject to gain or loss if there is a variation in the exchange rate of that currency.
Every bank and financial institution which engages in foreign exchange operations shall submit to the bank of Zambia, within ten working days following the reference month, a report of its foreign exchange positions and exposures, in the forms set out in the First, Second and Third Schedules.
[Regulations 7 and 8]
1. Total regulatory capital
(as calculated by using the Second Schedule of the Banking and Financial Services (capital adequacy) Regulations). Attach calculation
K ....................................
2. Overall foreign currency exposure item 3 of the Second Schedule
K ....................................
As a percentage of regulatory capital (item 1 above)
% ....................................
3. Foreign currency exposure on per currency basis
Currency
Long (short)
As a percentage of
Regulatory Capital
DEM
FFR
ZAR
GBP
USD
OTHERS (specify)
[Regulations 7 and 8]
Positions in domestic currency equivalent of the spot and forward positions of foreign currencies (1) (using prevailing rates quoted in the Third schedule)
Currency
Balance sheet
Forward
Overall
Long
Short
Long
Short
Long
Short
DEM
FFR
ZAR
GBP
USD
OTHERS (SPECIFY)
NET POSITION
OVERALL EXPOSURE
(1) Report all un-hedged positions, including interest rate hedges, forward contracts, derivatives, etc.
(2) The net position is the difference between the “total long” and “total short” positions.
(3) The overall foreign currency exposure is the sum total of all long and short positions.
[Regulations 7 and 8]
Positions in foreign currencies and net domestic currency equivalent positions
(- sign indicates a short position)
Currency
Net balance
Off-balance sheet *Report all unhedged positions, including options, interest rate hedges forward contracts, derivatives, etc.*(forward)
Total
Prevailing spot forex rate (at date of this return)
Net domestic currency equivalent position
DEM
FFR
ZAR
GBP
USD
OTHERS (SPECIFY)
BANKING AND FINANCIAL SERVICES (EXEMPTION) REGULATIONS
[Section 130]
Arrangements of Regulations
Regulation
2. Exemption from limitation on voting control
SI 130 of 2003.
These Regulations may be cited as the Banking and Financial Services (Exemption) Regulations, 2003.
2. Exemption from limitation on voting control
The Bank set out in the Schedule to these Regulations is exempted from complying with the limitation on voting control as provided by subsection (2) of section 23.
[Regulation 2]
Indo Zambia Bank Limited
BANKING AND FINANCIAL SERVICES (MONEY CIRCULATION PYRAMID SCHEMES) REGULATIONS
[Section 124]
Arrangements of Regulations
Regulation
SI 44 of 1998.
These Regulation may be cited as the Banking and Financial Services (Money Circulation Pyramid Schemes) Regulations, 1998.
In these Regulations, unless the context otherwise requires–
“money circulation pyramid scheme” includes:
(a) any scheme, plan, arrangement, agreement or understanding whether legally enforcement or not, between two or more persons which involve the pooling and distribution of funds by recruitment of subscribers; or
(b) the issue of any notice, circular prospectus, proposal or other document inviting the public for subscription in any scheme referred to in paragraph (a)
“money circulation pyramid schemes activities" includes the acceptance or obtaining of money, directly or indirectly, from member of the public as a regular feature of a business practice, with the prospect of such members (hereinafter referred to as the “participating members”) receiving payments or other money, related benefits, directly or indirectly–
(i) on or after the introduction of the public to the business practice (hereinafter referred to as the “new participating members”), from which new participating members, in their turn, money is accepted or obtained, directly or indirectly, as a regular feature of the business practice, whether or not:
(A) the information of the new participating members is limited to their introduction by participating members or extends to the introduction by the new participating members of other persons; or
(B) new participating members are required to acquire movable or immovable property, rights or services;
(ii) on or after the promotion, transfer or change or status of the participating members or new participating members within the business practice;
(iii) from the funds accepted or obtained from participating members or new participating members in terms of the business practice; or
(iv) from the soliciting of, or advertising for, directly or indirectly, money or persons for introduction into or participating in a business practice as described in paragraph (i);
“subscriber” includes a person to whom the money circulation pyramid scheme is offered to and accepted; and
“pyramid sales person" includes a person who has subscribed to such a scheme and who recruits or attempts to recruit others to join or participate in the scheme
3. No person shall conduct or carry out a money circulation pyramid scheme.
4. Any person acting in contravention of these Regulations shall be guilty of an offence and liable upon conviction to a fine not exceeding 50 thousand penalty units or to a term of imprisonment not exceeding two years or to both.
BANKING AND FINANCIAL SERVICES (BUREAU DE CHANGE) REGULATIONS
[Section 124]
[Currency mentioned in this regulation should be re-denominated as stipulated under S 4 of Re-denomination Act, 2012, read with S 29 of Bank of Zambia Act, 1996.]
Arrangement of Regulations
PART I
PRELIMINARY
Regulation
PART II
AUTHORITY OF BANK OF ZAMBIA
3. Authority of Bank of Zambia
4. Delegation of powers by Registrar
5. Power of the Bank of Zambia to call for information
6. Bank of Zambia may prescribe maximum or minimum amounts for transactions
7. Sale of excess foreign exchange
PART III
LICENSING
8. Prohibition of unlicenced foreign exchange business
10. Determination of application
11. Scope of and duration of licence
14. Revocation of licence and right of appeal
15. Honouring of obligations on revocation of licence
16. Surrender of a licence by a bureau
17. Registrar may make enquiry
PART IV
MODE OF OPERATION
19. Nature of Bureaux de Change business
20. Prohibition of forward purchase and sales
21. Receipting of purchases and sales
22. Bureau to display rates and commissions
23. Conduct of bureau business
24. Duty to sell foreign exchange
26. Notice of changes in management
PART V
MISCELLANEOUS
29. Submission of audited accounts
30. Submission of returns by bureau
31. Duty to maintain adequate accounting control systems and records
33. Seizure of counterfeit foreign exchange
34. Disqualification of certain persons from management of Bureau
35. Suspension and removal of managers
36. Immunity of Bank of Zambia officials, etc.
38. Transactions to be in confidence
40. Offence by bodies corporate
41. Power of Bank of Zambia to amend fees
42. Savings and transitional provisions
SI 38 of 2003.
PART I
PRELIMINARY
These Regulations may be cited as the Banking and Financial Services (Bureau de Change) Regulations, 2003.
In these Regulations, unless the context otherwise require–
“bureau” means a bureau de change licensed under these Regulations to conduct the business of buying and selling foreign exchange;
“company” means a company registered under the Companies Act;
“Foreign Exchange” includes–
(a) bank notes and coins other than the currency of Zambia which are legal tender outside Zambia;
(b) a unit of account of an international body to which Zambia is a member;
(c) any financial instrument denominated in a currency other than that of Zambia;
(d) any right to receive foreign bank notes or coins in respect of any balance at a financial institution located within or outside Zambia;
(e) travellers cheques, credit card and other modes of payment; and
(f) any other instrument or modes of payment that the Bank of Zambia may prescribe.
“licence” means a licence issued under Part III of these regulations;
“person” includes an individual, a company, a partnership, an association and any group of persons acting in concert, whether or not incorporated; and
“Registrar” means the person appointed as Registrar of banks and financial institutions under the Act.
PART II
AUTHORITY OF BANK OF ZAMBIA
3. Authority of Bank of Zambia
The Bank of Zambia shall be the regulatory authority for the purposes of giving effects to these Regulations.
4. Delegation of powers by Registrar
The Registrar may, to such extent and subject to such conditions as the Registrar may consider proper, delegate to any person or class of persons the performance of any of the powers conferred upon the Registrar in these Regulations.
5. Power of Bank of Zambia to call for information
The Bank of Zambia may require a bureau to furnish details of any of its foreign exchange transactions or provide returns in a format prescribed by the Bank of Zambia giving details of its foreign of its foreign exchange transactions.
6. Bank of Zambia may prescribe maximum or minimum amount for transactions
The Bank of Zambia may prescribe the maximum or minimum amount of any over the counter cash transactions a bureau may engage in.
7. Sale of excess foreign exchange
(1) The maximum open foreign exchange position, consisting of foreign exchange available at a bureau and the balances in its foreign exchange accounts with any bank or banks, that a bureau may maintain at the close of business on any day shall be no more than a per centum of regulatory capital prescribed by the Bank of Zambia.
(2) A bureau shall sell any foreign exchange above the open foreign position prescribed by these Regulations.
PART III
LICENSING
8. Prohibition of unlicenced foreign exchange business
(1) Any person other than a bank or a company licensed under these Regulations shall not deal in or conduct any business of buying or selling any foreign exchange
(2) Any person who contravenes sub regulation (1) commits an offence and is liable on conviction to a fine not exceeding 50,000 penalty units or to imprisonment for a term not exceeding two years, or to both.
(1) A company shall apply to the Registrar for a licence in form I set out in the Schedule to these Regulations.
(2) A company applying for a licence shall have in its name the words “Bureau de Change”.
(3) An application for a licence shall be accompanied by a nonrefundable application fee of 30 thousand fee units and the following documents:
(a) memorandum and articles of association of the application company
(b) certified copies of directors’ passports;
(c) lease agreement, where the premises to be used are rented;
(d) a copy of the business plan;
(e) a copy of the audited accounts;
(f) a copy of the certificate of incorporation;
(g) a director’s questionnaire in Form III set out in the Schedule to these Regulations; and
(h) vital statistics form in For II set out in the Schedule to these Regulations.
10. Determination of application
(1) The Registrar shall, within one hundred and 20 day from the date of receipt of a complete application for a licence, consider the application.
(2) Where the Registrar is satisfied that the applicant is a fit and proper person to be licensed as a bureau and has complied with the requirements of these Regulations, the Registrar shall approve the application and may refuse to grant a licence where the Registrar is not so satisfied.
(3) For the purpose of this regulation, a complete application is one that is verified by the Bank of Zambia as fully meeting all the requirements of these regulations.
(4) The Registrar shall, before granting a licence under this Part, cause an inspection to be conducted of the proposed place of business.
(5) The Registrar shall, within seven days after the expiration of the expiration of the period prescribed under sub-regulation (1) inform the applicant of the decision.
(6) Where the Registrar refuses to grant a licence, the Registrar shall inform the applicant accordingly giving reasons for the refusal.
(7) The Registrar shall, where an application is approved by the Registrar, and upon the payment of a fee of 60 thousand fee units by the applicant, issue the applicant with a licence in Form IV set out in the Schedule to these Regulations.
(8) A fee of 30 thousand fee units shall be payable for every additional branch of a bureau.
11. Scope of and duration of licence
(1) A licence authorises its holder to conduct the business of a bureau de change at the place or places of business specified in the licence.
(2) A licence shall remain valid unless it is revoked or surrendered to the Registrar.
(3) A fee of 60 thousand fee units shall be payable on the renewal of a licence.
(4) A licence shall lapse if not renewed in accordance with the provisions of these Regulations.
(5) A licence may be issued subject to such terms and conditions as the Bank of Zambia may determine.
(1) A bureau shall display or exhibit its licence or a certified true copy thereof in a conspicuous place on the premises where it conducts its business.
(2) The Bank of Zambia shall fine any bureau which contravenes this Regulation an amount of 1,000 penalty units and, in the case of a continuing breach, a further fine of five hundred penalty units for every day during which the contravention continues:
Provided that the further fine referred to in this sub regulation shall not exceed 50,000 penalty units.
(1) A licence shall not be transferred, assigned or encumbered in any bureau.
(2) A person shall not operate or manage a bureau on behalf of another bureau.
(3) Any person who contravenes this regulation commits an offence and is liable upon conviction to a fine not exceeding 1,000 penalty units or to imprisonment for a term not exceeding two years, or to both.
14. Revocation of licence and right of appeal
(1) The Registrar shall revoke a licence where–
(a) after the issuance of the licence, the Registrar finds that the information in the application for the licence was false or misleading in a material particular;
(b) the licensee has not commenced the operations permitted under the licence three months after the date of issuance of the licence;
(c) the licensee has contravened any provision of these Regulations or any other law applying to the licence;
(d) the licensee has persistently failed to comply with any condition of the licence or instructions issued by the Bank of Zambia.
(e) The licensee is placed under receivership or liquidation or is adjudged bankrupt;
(f) The licence has since the issuance of its licence ceased to qualify for the licence;
(g) The licence has engaged in unsafe or unsound practices or in malpractice or irregularities in the management of its affairs;
(h) The licence’s primary and regulatory capital falls below the minimum required by the Bank of Zambia;
(i) The licensee has in the course of the renewal of the licence failed to disclose to the Registrar material information of which the licensee was aware, or should, with the exercise of such diligence as could have reasonably been expected in the circumstances, have been aware; or
(j) The Registrar considers it appropriate.
(2) The Registrar may, by notice in writing, require a bureau to show cause, which seven working days, why the bureau's should not be revoked.
(3) Where a bureau fails to respond to the notice issued under sub-regulation (2), or if the Registrar is not satisfied with the cause shown, the Registrar may revoke the licence, and shall so inform the bureau in writing.
15. Honouring of obligations on revocation of licence
The suspension, revocation or expiry of a licence shall not relieve the licensee of any obligation incurred or assumed during the period of validity of the licence.
16. Surrender of licence by bureau
(1) A bureau may, with the prior written approval of the Registrar surrender its licence by delivery it by hand to the Registrar.
(2) A bureau may, before surrendering its licence, give the Registrar three months notice of its intention to surrender the licence.
17. Registrar may make inquiry
The Registrar may, before exercising any power under this Part, make such inquiry or, give such directions as the Registrar considers fit, for the purpose of ensuring that the interests of the public are safeguarded.
PART IV
MODE OF OPERATION
(1) The Bank of Zambia shall prescribe the minimum primary and regulatory capital of a bureau by Gazette notice.
(2) A bureau that is operating at the date of the coming into force of these regulations and that does not meet the minimum capital requirement shall build up its capital to the prescribed level by no later than 90 days from the coming into force of these Regulations.
(3) Any bureau which, or person who, contravenes sub-regulation (2) commits an offence and is liable upon conviction to a fine not exceeding ten thousand penalty units and in the case of a continued contravention, a further fine not exceeding five thousand penalty units for every day that the contravention continues:
Provided that the further fine referred to in this sub-regulation shall not exceed 50 thousand penalty units.
19. Nature of Bureaux de Change business
(1) A bureau shall only engage in–
(a) over the counter buying and selling of foreign exchange cash.
(b) buying and selling travellers cheques; and
(c) buying and selling such other instrument as may be prescribed by the Bank of Zambia.
(2) A bureau shall open and maintain a foreign exchange account with a bank shall ensure that the account is solely used for the day to day operations of bureau.
(3) A bureau shall not in the operation of its accounts remit, receive or make any transfer on behalf of its customer.
20. Prohibition of forward purchases by bureau
A bureau shall not, nor shall any of its officers or members of staff–
(a) deposit or accept kwacha from a customer with intent to obtain or supply the foreign exchange equivalent either wholly or in part at a future date; or
(b) deposit or accept foreign exchange from a customer with the intent of obtaining or supplying the kwacha equivalent either wholly or in part at a future date.
21. Receipting of purchase and sales
(1) A bureau shall, for every sale and purchase of foreign exchange, issue an accurate official receipt in form V set out in the Schedule to these Regulations.
(2) A bureau shall not issue the receipt referred to under sub regulation (1) for a purpose other than to cover an actual purchase or sale of foreign exchange.
22. Bureau to display rates, commissions, etc
(1) A bureau shall display exchange rates in a conspicuous place at any premises at which it conducts its business in accordance with guidelines issued by the Bank of Zambia.
(2) A bureau shall buy and sell foreign currencies at or within the rates displayed.
(3) A bureau shall display the commission to be charged on any transaction or other charges applicable in a clear and prominent manner at all places where it conducts its business.
(4) Any bureau which, or person who, contravenes the provisions of this Regulation commits an offence and is liable, on conviction, to a fine not exceeding 50 thousand penalty units or to imprisonment for a term not exceeding two years, or to both.
23. Conduct of bureau business
A bureau shall–
(a) conduct its business with integrity, produce and professional skill;
(b) engage only in bona fide transactions;
(c) exercise care and caution and avoid entering into transactions, that may involve or facilitate money laundering.
24. Duty to buy or sell foreign exchange
Subject to Regulation 23, a bureau shall not refuse to buy or sell any foreign exchange to any customer at or within the indicated rated where the foreign exchange required by the customer is available at the bureau.
(1) A bureau shall not without the prior written approval of the Bank of Zambia–
(a) open a new place of business; or
(b) change its business location.
(2) The Bank of Zambia may, in granting its approval under sub-regulation (1) impose such conditions as it considers fit.
26. Notice of changes in shareholding, directors and senior management
A bureau shall not, without the Bank of Zambia’s prior approval make any changes in its shareholding, directors senior management or the name of the bureau.
A person who has de-jure control or de facto control of a bureau shall not own any share in the capitals of, or acquire or maintain de-jure or de facto of any other bureau.
PART V
MISCELLANEOUS
(1) The Registrar, the Bank of Zambia or any person authorised by the Registrar or the Bank of Zambia, may at any time cause an inspection to be made of any bureau and its books of accounts at any place where the bureau conducts its business.
(2) The bureau shall cause its books and accounts to be produced to an inspector appointed in sub-regulation (1) and shall ensure that its staff furnishes such information as the inspector may reasonably require for the purpose of the inspection.
(3) A person who obstructs, hinders or endeavours to obstruct or hinder any inspection of a bureau or its books and accounts commits an offence.
29. Submission of audited accounts
(1) A bureau shall, not later than three months after the end of its financial year, submit its audited accounts to the Bank of Zambia.
(2) Any bureau that contravenes this Regulation commits an offence and shall be liable upon conviction to a fine not exceeding 1000 penalty units, and a further fine of five hundred penalty units for every day during which the contravention continues:
Provided that the further fine referred to in this sub regulation shall not exceed 50 thousand penalty units.
30. Submission of return by bureau
(1) A bureau shall submit a monthly return of all purchases and sales of foreign exchange in Form VII set out in the Schedule to these Regulations.
(2) A bureau shall submit to the Bank of Zambia–
(a) a weekly return of the sales and purchases and open foreign exchange position, which shall be submitted not later than the close of business on every first working day of the week after which the return is being made;
(b) its quarterly balance sheet, profit and loss account and a cash flow statement within ten working days after the end of every quarter in a form prescribed by the Bank of Zambia; and
(c) any other returns as may be required by the Bank of Zambia.
(3) Any bureau that contravenes this Regulation commits an offence and shall be liable upon conviction to a fine not exceeding 1000 penalty units, and a further fine of five hundred penalty units for every day during which the breach continues:
Provided that the further fine referred to in this sub regulation shall not exceed 50 thousand penalty units.
31. Duty to maintain adequate accounting control systems and records
(1) A bureau shall maintain adequate accounting and control systems and keep complete records and registers relating to its foreign exchange business.
(2) A bureau shall keep its books, accounts, record and registers for a period of at least six years from the date on which a transaction to which they relate takes place.
Any person who issues or takes part in the issuance of a document referred to or required to be furnished under the provisions of these Regulations, which is false in any material particular, or any other person who signed it commits an offence and is liable on conviction to a fine not exceeding 50 thousand penalty units or to imprisonment for a term not exceeding two years or both.
33. Seizure of counterfeit foreign exchange
(1) A bureau shall record any case involving counterfeit foreign exchange and shall immediately the case occurs report the matter to the Bank of Zambia and to the police.
(2) A bureau shall confiscate any counterfeit foreign exchange coming into the possession of the bureau and shall immediately hand it over to the police.
34. Disqualification of certain persons from management of bureau
A person shall not be appointed as a Director, officer or manager of a bureau if that person–
(a) is not a fit and proper person to hold the relevant office in relation to integrity or professional expertise;
(b) is not a natural person or above the age of 21 years;
(c) is an un-discharged bankrupt;
(d) has been convicted of a felony or any offence involving dishonesty;
(e) has been declared or otherwise adjudged in any official proceedings to be mentally incompetent to manage that person’s affairs;
(f) is under suspect or has been removed by order of the bank of Zambia under these Regulations; or
(g) has been a Director, chief executive officer, chief financial officer or manager of a bureau whose licence has been revoked or a company which has been adjudged insolvent, entered into composition, with creditors, gone into liquidation, declared bankrupt or has entered into any other arrangement with creditors or taken any other action with similar effect in Zambia or elsewhere and unless that person shows that the person was not responsible for the insolvency, liquidation, composition with creditors or other action with similar effect in Zambia or elsewhere and unless approval of the Bank of Zambia has been given for that person to act or continue to act as a Director or be directly concerned in the management of the bureau.
35. Suspension and removal of managers
(1) The Bank of Zambia may suspend a Director or other officer of a bureau from office for any period for non-compliance with these Regulations by notice in writing addressed to the concerned person.
(2) The Bank of Zambia may by notice request a Director or officer concerned in the management of a bureau show cause why the Director or officer should not be removed from office for breach of these Regulations or any other law affecting the operation of the business or for conducing the business in an unsafe and unsound manner.
(3) Where a Director or officer fails to comply with a notice given under sub regulation (1), or the Bank of Zambia is not satisfied with the cause shown under sub regulation (2), the Bank of Zambia may remove the Director or officer from office.
36. Immunity of Bank of Zambia officials, etc.
The bank of Zambia, the Registrar or any person authorised by the Bank or Zambia or the Registrar under these Regulations shall not be subject to any action, claim or demand by a liability to any person in respect of anything done or omitted to be done in pursuance or in the execution or intended execution or in connection with the execution or intended execution of any power or duty conferred upon the Bank of Zambia or the Registrar by these Regulations.
A bureau shall in legible letters written in the English language, display on its premises a notice informing customers that any complaints about any foreign exchange transaction may be lodged with the Bank of Zambia.
38. Transactions to be in confidence
A bureau and its members of staff shall conduct and ensure that all transactions conducted by the bureau or any member of staff are done and maintained in the strictest confidence.
Any person who–
(a) engages in the business of a bureau without a licence issued under these Regulations or buys and sells Foreign exchange contrary to the provisions of these Regulations;
(b) obstructs any person in the exercise of any powers conferred upon that person under these Regulations;
(c) purchases or sells foreign exchange outside the limits set by the Bank of Zambia;
(d) engages in forward purchases or sales of foreign exchange;
(e) fails to provide information required under these Regulations;
(f) with intent to evade any provision of these Regulations, destroys , mutilate, secretes or removes any document; or
(g) contravenes a restriction or duty imposed by these Regulations or fails to comply with any directive issued by the Registrar, authorised person o the Bank of Zambia;
commits an offence and is liable on conviction to a fine not exceeding 50,000 penalty units or imprisonment for a term not exceeding two years, or to both.
40. Offence by bodies corporate
Where a body corporate is convicted of an offence, or is fined under these Regulations, any person who is a Director of, or who is concerned in the management of, that body corporate shall be deemed to have committed the same offence and is liable to be fined as if the person authorised or permitted the act or omission constituting the offence.
41. Power of Bank of Zambia to amend fees
The Bank of Zambia may amend any fees payable under these Regulations.
42. Savings and transitional provisions
(1) Any bureau operating or in existence before the coming into force of these Regulations shall within 30 days of coming into force of these Regulations, take necessary steps required to make it comply with the requirements of these Regulations.
(2) Notwithstanding the repeal of the Bank of Zambia (Foreign Currency) Regulations, 1994.
(a) a bureau to which sub-regulation (1) applies shall be deemed to hold a licence under these Regulations until the date when the licence last issued to it would, under the former Regulations, have expired.
(b) any application pending under the repealed regulations shall be deemed to have been made under the corresponding provisions of these Regulations;
(c) any right or benefit accruing, or liability incurred, under the repealed Regulations shall continue in accordance with and subject to these Regulations;
(d) any regulations, order, notice or direction made or given and in force, immediately before the commencement of these Regulations, continue in force until revoked, as if made or given under these Regulations.
(3) A bureau to which this Regulation applies may surrender its licence by delivering the licence to the Registrar together with a notice in writing stating that it does not intend to continue trading as a bureau before expiry of its licence.
FORM I
[Regulations 9, 10, 21]
BANK OF ZAMBIA
THE BANKING AND FINANCIAL SERVICES (BUREAU DE CHANGE) REGULATIONS 2003
APPLICATION FOR A BUREAU DE CHANGE LICENCE
1. Full name of applicant (block letters)....................................................
2. Postal address of applicant (block letters).............................................
Registered Address ..........................................................................
3. Telephone number ................................................................................
Cell Phone number .......................... Email address ..................................
4. Location of proposed Bureau de change ....................................................
(a) District ................................................................................................
(b) City/Town ............................................................................................
(c) Physical address ..................................................................................
(d) Other information on location (if any)......................................................
(e) Location of branches ...............................................……………………………..................................................................................................................
5. (i) Applicant's bankers .............................................................................
(ii) ..........................................................................................................
6. (i) Number of Certificate of incorporation ..................................................
(ii) Date of certificate of incorporation .......................................................
7. Full names and physical addresses of directors and shareholders of the applicant company and their bankers:
Name
Address
Name of bank
........................................................................................................................
........................................................................................................................................................
......................................................................................................................................
FORM II
BANK OF ZAMBIA
THE BANKING AND FINANCIAL SERVICES (BUREAU DE CHANGE) REGULATIONS, 2003
VITAL STATISTICS FORM FOR SHAREHOLDERS AND DIRECTOR
Part A
(This Part applies to Zambia citizens only)
Name:.............................................................................................................
Date of Birth ............................................ Place of Birth ...................................
Passport No./NRC No. ........................................... Expiry date (if passport No. indicated).......................................................
Residential Address ....................................... Telephone No .............................
Business Address ............................................ Telephone No ............................
Marital Status .......................................... No. of Children .................................
Names of Spouse ................................... Identity card number ...........................
Next of kin ................................ Name of Parents .............................................
PART B
(This part applies to Non-Zambians only)
Name ....................................... Residential Address .........................................
......................................................................................................................
Immigration Permit No ................................. Passport No .................................
Work Permit No ..................................... Valid from .........................................
Passport Expiry Date ......................... Expiry Date into Zambia ...........................
PART C
(Applies to both Zambian and Non-Zambians)
Educational background .......................................................................……………....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
Employment Record
................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
Last employer where applicable .......................................................................
Employer’s reference
................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
Signature .........................................................
Date ................................................................
FORM III
BANK OF ZAMBIA
THE BANKING AND FINANCIAL SERVICES (BUREAU DE CHANGE) REGULATIONS 2003
DIRECTORS QUESTIONNAIRE
STATEMENT BY INDIVIDUALS WHO ARE HOLDING, OR PROPOSING TO HOLD THE OFFICE OF A DIRECTOR OR AN EXECUTIVE OFFICER OF A BUREAU DE CHANGE
(If insufficient space provided, please attach a separate sheet)
(Confidential and not available for inspection by the public)
1. Name of institution in connection with which this questionnaire is being completed (“the institution")
.......................................................................................................................................................................................................
2. Your Surname: ........................................................................................................................................................................
3. Your full forenames: ...............................................................................................................................................................
4. Former surname(s) and or forename(s) by which you may have been known:
5. Please state in what capacity you are completing this questionnaire, i.e. as a current or prospective Director, executive officer or combination of these. Please state your full title and describe the particular duties and responsibilities attaching to the position(s) that you hold or will hold. If you are completing this form in the capacity of Director, indicate whether, in your position as Director, you have or will have executive responsibility for the management of the institution’s business. In addition, please provide a copy of your curriculum vitae, unless it has already been provided:
6. Residential address:..................................................................................................................................................................
7. Any previous residential address(es) during the past 10 years:................................................................................................
8. Date and place of your birth (including town or city)..................................................................................................................
9. Your nationality and how it was acquired (birth, naturalisation or marriage):...........................................................................
10. Name(s) and address(s) of your bankers during the past 10 years: ......................................................................................
11. Your professional qualifications and year in which they were obtained: ..........................................................................................................................................................................................................
12. Your occupational and employment now and during the past 10 years including the name of your employer in each case, the nature of the business, the position held and relevant dates: .........................................................................................................................................................................................................
13. Of what bodies corporate (other than the institution) are you a Director or an executive officer and since when?
14. Do you have any direct or indirect interest representing 15 per cent or more of the issued capital of any body corporate (other than the institution) that is now registered, or has applied for authorisation, under the Act? If so give particulars:
.......................................................................................................................................................................................................
15. Of what bodies corporate other than the institution and those listed in reply to Question 13 have you been a Director or an executive officer at any time during the past 10 years? Give relevant date:
.......................................................................................................................................................................................................
16. Do any of the bodies corporate listed in reply to question 12, 13, 14 and 15 maintain a business relationship with the institution? If so, give particulars:
.......................................................................................................................................................................................................
17. Do you hold or have you ever held or applied for a licence or equivalent authorisation to carry on any business activity in the Republic of Zambia (“the Republic”) or elsewhere? If so, give particulars, if any such application was refused or withdrawn after it was made or any authorisation was revoked, give particulars:
......................................................................................................................................................................................................
18. Does any institution with which you are, or have been associated as Director or executive office hold, or has it ever held or applied for, a licence or equivalent authorisation to carry on any business activity ? If so, give particulars. If any such application was refused, or was withdrawn after it was made or an authorisation revoked, give particulars:
......................................................................................................................................................................................................
19. Have you at any time been convicted of any offence, excluding–
(i) any offence committed when you were under 18 years, unless the same was committed within the last 10 years :.........................................................................................................................................................................................................
(ii) any road traffic offence ....................................................................... or
(iii) any political offence:............................................................................
20. Have you, in Zambia or elsewhere, been censured, disciplined, warned against some conduct, or made the subject of a court order at the instigation of a regulatory authority or any professional body to which you belong, have you ever held a practising certificate subject to conditions? If so give particulars: ..........................................................................................................................................................................................................
21. Have you, or has any body corporate, partnership or unincorporated institution which you are, or have been, associated with a Director or executive officer, been the subject of an investigation, in Zambia or elsewhere, by or at the instigation of a government department or agency, professional association or other regulatory body if so give particulars: ..........................................................................................................................................................................................................
22. Have you, in Zambia or elsewhere, been dismissed from any office or employment, or subject to disciplinary proceedings by your employer or barred from entry to any profession or occupation? If so, give particulars: .........................................................................................................................................................................................................
23. Have you ever been declared insolvent (either provisionally or finally) by a court in Zambia or elsewhere, liable for any fraud, misfeasance or other misconduct towards any person ? if so, give particulars: ........................................................................................................................................................................................................
24. Have you, in connection with the formation or management of any body corporate, partnership or unincorporated institution, been adjudged by a court in Zambia or elsewhere, civilly liable for any fraud, misfeasance or other misconduct towards any members thereof? If so give particulars: .......................................................................................................................................................................................................
25. Have you, in connection with the formation or management of any body corporate, partnership or unincorporated institution, been adjudged by a court in Zambia or elsewhere, civilly liable for any fraud, misfeasance or other misconduct towards any members thereof? If so give particulars: .....................................................................................................................................................................................................
26. Has any body corporate, partnership or unincorporated institution with which you were associated as a Director or executive officer, in Zambia or elsewhere, been would up, made subject to an administration order, otherwise made any compromise or arrangement with its creditors or ceased trading, either while you were associated with it or within one year after you ceased to be associated with it , or has anything analogues to any of these events occurred under the laws of any other jurisdiction? If so, give particulars:....................................................................................................................................
27. Have you been concerned with the management or conduct of the affairs of an institution that, by reason of any matter relating to a time when you were so concerned, has been censured, warned as to future conduct, discipline or made the subject of a court order at the instigation of any regulatory authority in Zambia or elsewhere? If so give particulars: .......................................................................................................................................................................................
28. In carrying out your duties, will you be acting on the directors or instructions of any other individual or institution? If so give particulars:................................................................................................................................................................................
29. Do you, or does any related party of whom you are aware, undertake business with this institution? If so give particulars:......................................................................................................................................................................................
30. How many shares in the institution are registered in your name or the name of a related party) if applicable, give name(s) in which registered and class of shares: ........................................................................................................................................................................................
31. How many shares in the institution registered in your name or that of a related party are related parties beneficially interested? ...........................................................................................................................................................................
32. Do you, or does any related party, hold any shares in the institution as trustee or nominee? If so, give particulars: .....................................................................................................................................................................................
33. Are any of the shares in the institution mentioned in reply to questions 30, 31 and 32? ........................................................................................................................................................................................
34. Equitably or legally charged or pledged to any party? If so give particulars: ..........................................................................................................................................................................................
35. What proportion of the voting power at any general meeting of the institution (or of another body corporate of which it is a subsidiary) are you or any related party entitled to exercise or control the exercise of ? ......................................................................................................................................................................................
36. I the exercise of the voting power at any general meeting of the institution, or of another body corporate of which it is a subsidiary, is or may be controlled by one or more of your associates, or any related party, give the proportion of the voting power so controlled in each case and the identity of each associate. ...............................................................................................................................................................................................
37. Are you currently, or do you, other than in a professional capacity, expect to be engaged in any litigation in Zambia or elsewhere in the next 12 month? If so give particulars: .................................................................................................................................................................................................
38. Do you have a basic knowledge and understanding of the risks to which financial institution are exposed? ..................................................................................................................................................................................................
39. Have you acquainted yourself with, and do you understand, the extent of the rights and powers, as well as your responsibilities and duties as a Director of the institution, as contained in the applicable law? (to be completed only by directors or prospective directors). ..................................................................................................................................................................................................
DECLARATION
I ........................................................................................................... hereby declare the following: This statement consists of ...................................... pages, each signed by me. The content of this declaration is true to the best of my knowledge and belief. I am aware that should it be submitted as evidence and I know that something appears therein that I know to be false or believe not to be true, I may be liable to prosecution.
I undertake that for as long as I continue to be a Director or executive officer or the institution, I will notify the Registrar of any material changes to, or affecting the completeness or accuracy of, the information supplied by me in item 1-38 as soon as possible, but in any event not later than 21 days from the day that the changes come to my attention.
I will ensure that at all times while acting in my capacity as a Director or executive officer or the institution, undertake to:
– act in good faith towards the financial institution(s) in the group;
– avoid conflict between other interests and the interest of the financial institution(s) in the group; and
– place the interest of the financial institution(s) in the group above all other interests?
I know and understand the content of this declaration. I have */do not have * objections to taking the prescribed oath.
I consider the prescribed oath to be binding */not binding *on my conscience.
...................................................................
Signature of Deponent
.................................
Date
I certify that the above statement was taken by me and that the deponent has acknowledged that he */she knows and understands the content of the statement. This statement was sworn to */affirmed before and the deponent’s signature was place thereon in my presence at ...................................................... on this ................................... day of ................................... 20 ........................................................
Commissioner of Oaths
Full Names ...................................................................................................
Ex officio .....................................................................................................
Area:.............................................................................................................
Address:.........................................................................................................
*Delete whichever is not applicable
FORM IV
Serial Number ..................
Licence No. .....................
BANK OF ZAMBIA
THE BANKING AND FINANCIAL SERVICES (BUREAU DE CHANGE) REGULATIONS 2003
LICENCE FOR OPERATION OF A BUREAU DE CHANGE
This is to certify
That .......................................................................................................................................................................................................... is licensed to carry on the business of buying and selling foreign exchange as a Bureau de change at ........................................................................................................................................................................................................ This licence has been issued under the Banking and Financial Services (Bureau de change Regulations) 2003 and shall be valid from until revoked or surrendered to the Registrar ............................................................................................................................................ to ................................................... subject to the provisions of the said Regulations ................................................................... and to the following terms and conditions ........................................................................................................................................................................................................................................................................................................................................................................
Registrar ...................................
Date
FORM V
Serial No. .................................................
BANK OF ZAMBIA
THE BANKING AND FINANCIAL SERVICES (BUREAU DE CHANGE) REGULATIONS 2003
PURCHASE OF FOREIGN CURRENCY RECEIPT (CASH)
Name and Stamp of Bureau:
Date:.................................
Currency
Amount
Rate
Zambian Kwacha Equivalent
Use of foreign currency (tick as appropriate)
[ ] Tourism [ ] Export proceeds [ ] Education [ ] Bank/Bureau
[ ] other (specify)...........................................................................................
Name of seller .................................................................................................
Nationality ......................................................................................................
ID/Passport No. ...............................................................................................
Permanent Residential Address .........................................................................
....................................................................................................................
Signature .....................................................................................................
Signature of bureau official .............................................................................
FORM VI
BANK OF ZAMBIA
THE BANKING AND FINANCIAL SERVICES (BUREAU DE CHANGE) REGULATIONS 2003
SALE OF FOREIGN CURRENCY (CASH)
Name and Stamp of Bureau:
Date:.......................................
Currency
Amount
Serial No.
Rate
Zambian Kwacha Equivalent
US$/ZAR
Name of buyer ................................................................................................
Nationality .....................................................................................................
ID/Passport No ...............................................................................................
Permanent Residential Address ............................…................................................................................................................................................................
......................................................................................................................Signature ..................................................................
Signature of Bureau official .....................................
FORM VII
BANK OF ZAMBIA
THE BANK AND FINANCIAL SERVICES (BUREAU DE CHANGE) REGULATIONS 2003
SALE OF FOREIGN CURRENCY RECEIPT
Name and Stamp of Bureau:
Date:.................................
Currency
Amount
TC/draft No.
Issuer Thomas Cook, Barclays etc
Rate
Zambian Kwacha Equivalent
Name of buyer ................................................................................................
Nationality .....................................................................................................
ID/Passport No ..............................................................................................
Signature .......................................................................................................
Residential Address ..........................................................................................................................................................................................................
Signature of bureau official ...............................……...........................................
FORM VIII
BANK OF ZAMBIA
THE BANKING AND FINANCIAL SERVICES (BUREAU DE CHANGE) REGULATION 2003
PURCHASE OF FOREIGN CURRENCY RECEIPT
(Travellers Cheques and Bank Drafts)
Name and Stamp of Bureau
Date:.............................
Currency
Amount
TC/draft number
Issuer Thomas Cook, Barclays etc
Rate
Zambian Kwacha Equivalent
Source (tick as appropriate) [ ]
[ ] Tourism [ ] Export proceeds [ ] Bank/Bureau
[ ] Other specify
Name of buyer .............................................................................................
Nationality ....................................................................................................
ID/Passport No ...........................................................................................
Signature ......................................................................................................
Residential Address .......................................................................................
DECLARATION BY CHAIRMAN OF A FINANCIAL INSTITUTION OR AUDITOR IN CASE OF A NEW FINANCIAL INSTITUTION
I, the undersigned .......................................................................................... being Chairman of the board of creditor /auditor* of ......................................... confirm that I have carefully studied all information supplied in this statement and, after discussion with the deponent ................................................. and all other members of the board, and after having taken into account any other information at my disposal or that has come to my attention, I am of the opinion that the deponent ............................................................. is fit and proper to take up office in this institution. In the case of appointment of a Director I confirm that the appropriate conditions of the articles of association of the company have been complied with. Similarly, in the case of the appointment of an executive officer, I confirm that company policy has been complied with.
Name:......................................................
Signed ....................................................
Date .......................................................
*Delete whichever is not applicable
FORM IX
BUREAU DE CHANGE CAPITAL COMPUTATION FORM
Bureau de Change
1. CAPITAL COMPUTATION SCHEDULE
K million
(a)
Paid –up-Capital
0
(b)
Share Premium
0
(c)
Retained earnings
0
(d)
Other Reserves
0
(e)
Total Reserve (b + c + d)
0
(f)
Sub-total (a + e)
0
(g)
Deduct:
0
(h)
Adjustments
0
(i)
Sub total (h)
0
(j)
TOTAL PRIMARY CAPITALS (f-i)
0
(k)
MINIMUM REQUIRED
(l)
(Minimum capital requirement)
0
(m)
EXCESS (DEFICIENCY) (J + I)
0
II SECONDARY (TIER 2) CAPITAL
(a)
Eligible loan stock/capital
(b)
Other (ie computers fax machines, notes detecting and counting machines etc)
0
(c)
TOTAL SECONDARY CAPITALS (II(a) + II(b)
0
(d)
ELIGIBLE SECONDARY CAPITAL (up to 100% of Primary Capital
0
(e)
ELIGIBLE TOTAL CAPITAL (Regulatory Capital (Ij + Iid)
0
(f)
MINIMUM CAPITAL REQUIREMENT
0
Source: Bank of Zambia, Non- Bank financial System supervision
BANKING AND FINANCIAL SERVICES (MICRO-FINANCE) REGULATIONS
[Section 124]
[Currency mentioned in this regulation should be re-denominated as stipulated under S 4 of Re-denomination Act, 2012, read with S 29 of Bank of Zambia Act, 1996.]
Arrangement of Regulations
PART I
PRELIMINARY
PART II
AUTHORITY OF THE BANK OF ZAMBIA
4. Authority of Bank of Zambia
5. Power of Bank of Zambia to call for information
PART III
LICENSING
6. Prohibition of unlicensed micro-finance services
8. Determination of application
9. Scope and duration of licence
13. Licensee to honour obligations in spite of revocation of licence
PART IV
CATEGORIES OF MICRO-FINANCE INSTITUTIONS
14. Categories of Micro-finance Institutions
15. Services to be provided by deposit taking micro-finance institution
16. Services to be provided by non-deposited micro-finance institution
17. Applicants to designate persons to cover losses etc.
18. Prohibition of change of category without approval of registrar
19. Change of category of licence
PART V
GOVERNANCE OF MICRO-FINANCE INSTITUTIONS
20. Structure of micro-finance institution
21. Management of micro-finance institution
22. Systems of internal control
23. Qualifications of Director or person in management of micro-finance institution
24. Suspension or removal of officer
25. Immunity of Registrar etc.
PART VI
OPERATIONS OF MICRO-FINANCE INSTITUTIONS
26. Minimum primary and regulatory capital
28. Prudence in business conduct
30. Disclosure of cost of borrowing
31. Micro-finance institution to display customer rights, responsibilities, etc.
32. Branches of existing of micro-finance institution
33. Closure of micro-finance institution
34. Notice of change in shareholding, directors and senior managers
36. Control of micro-finance institution
PART VII
SUPERVISION OF MICRO-FINANCE INSTITUTION
37. Inspection of micro-finance institution
38. Submission of returns by micro-finance institution
PART VIII
GENERAL PROVISIONS
44. Confidentiality of transactions
48. Offences by body corporate
50. Compliance by existing micro-finance institutions
SI 3 of 2006.
PART I
PRELIMINARY
These Regulations may be cited as the Banking and Financial Services (Micro-finance) Regulations, 2006.
In these Regulations, unless the context otherwise requires–
“borrower” means a person who has concluded a loan agreement with a micro-finance institution;
“common bond institution” means a micro-finance service provider whose members are natural persons drawn exclusively from a pre-existing social, economic or professional organisation or group linked to any other financial institution by common ownership or control by management, dejure or defacto, and where each member has an equal number of voting rights;
“credit facility” means–
(a) the granting by a micro-finance institution of an advance, loan or other facility which enables a customer of the micro-finance institution to access funds or financial guarantees; or
(b) the incurring of liabilities by a micro-finance institution on behalf of a customer with prior written consent as a mechanism for loan disbursement;
“de facto” control of a micro-finance institution by a person means direct or indirect influence of any kind that, results in a person controlling the micro-finance institution and includes any powers exercisable over another micro-finance institution by virtue of such influence;
“de jure” control of a micro-finance institution means beneficial ownership of more than 50 per centum of any class of the issued voting shares of a micro-finance institution;
“deposit” means an amount of money paid to a bank or micro-finance institution in respect of which–
(a) an equal amount or any part thereof is conditionally or unconditionally repayable with or without a premium, on demand or at specified or unspecified dates or on other terms agreed by or on behalf of the person making the payment and the micro-finance institution receiving it; or
(b) no interest is payable or interest is payable at specified or unspecified intervals, notwithstanding that the payment is limited to a fixed amount or that a transferable or non-transferable certificate or other instrument providing for the repayment of the amount referred to in paragraph (a) or the interest referred to in this paragraph is issued in respect of that amount or interest;
“group guarantee” means an agreement by a group of micro-finance borrowers to be held jointly or severally liable for loan repayments in order to secure credit facility;
“lender” means a person, who, as part of business, advances micro credit facilities;
“licence” means a licence issued under Part III of these Regulations;
“loan agreement” means an agreement, acknowledgment of a debt, or any other lending instrument concluded between a lender and a borrower;
“low income customer” means a person who is economically active, receives low income and does not have access to formal financial institutions;
“micro credit” means a credit facility that does not exceed five per centum of the primary capital of a licensed micro-finance institution, as prescribed by the Bank of Zambia;
“micro-finance institution” means a person who, as part of their business, advances micro credit facilities;
“micro-finance service” means the provision of services primarily to small or micro enterprises or low income customers and includes the following–
(a) the provision of credit facilities usually characterised by frequent repayments; and
(b) the acceptance of remittances and any other services that the Bank of Zambia may designate;
“non current account deposits” includes–
(a) savings
(b) money market instruments;
(c) term deposits; and
(d) non-current account savings;
“non-current account savings” means deposits in retail savings accounts and includes passbook savings;
“person” includes an individual, a company, a partnership, an association, and any other group of persons acting in concert, whether incorporated or not; and
“primary regulator” means–
(a) the Registrar of Companies appointed under the Companies Act;
(b) the Registrar of Societies appointed under the Societies Act; or
(c) the Registrar of Co-operatives appointed under the Co-operative Societies Act;
“Registrar” means the person appointed as Registrar of Banks, Financial Institutions and Financial Businesses under section 20 of the Act;
“savings” means a sum of money provided by a borrower as a partial guarantee or a precondition of a loan, and the immediate placement of such money in a bank or deposit taking financial institution licensed under section 10 of the Act, for the period of the loan; and
“term deposit” means a savings instrument payable upon maturity or which may be discounted upon notice within 360 days.
(1) These Regulations shall apply to–
(a) deposit taking micro-finance institution; and
(b) non deposit taking micro-finance institutions that meet the minimum capital requirements as prescribed by the Bank of Zambia under Regulation 26.
(2) A non-deposit-taking micro-finance institution that does not meet the minimum capital requirements as prescribed by the Bank of Zambia under Regulation 26 shall–
(a) be regulated by its regulator; and
(b) be required to register a micro-finance institution with such body as may be designated by the Bank of Zambia.
PART II
AUTHORITY OF THE BANK OF ZAMBIA
4. Authority of Bank of Zambia
(1) The Bank of Zambia shall, for the purposes of these Regulations, be regulatory authority.
(2) The Bank of Zambia may, subject to such conditions as the Bank of Zambia may consider necessary, delegate to any person the performance of any of the powers conferred upon the Bank of Zambia, in these Regulations.
5. Power of Bank of Zambia to call for information
The Bank of Zambia may require a micro-finance institution to furnish details of any of its operations.
PART III
LICENSING
6. Prohibition of unlicensed micro-finance services
(1) Subject to sub-regulation (2) of Regulation 3, a person, other than a micro-finance institution licensed under these Regulations shall not conduct any micro-finance business.
(2) Any person who contravenes sub-regulation (1) commits an offence and shall be liable, upon conviction, to a fine not exceeding 50,00 penalty units or to imprisonment for a term not exceeding two years, or to both.
(1) A person who intends to establish a micro-finance institution shall apply to the Registrar for a licence in Form MF1, as set out in the First Schedule.
(2) An application for a licence shall be accompanied by a non-refundable application fee and the following documentation or information:
(a) evidence of incorporation, where applicable;
(b) designation of voting rights;
(c) physical and postal address of its head office;
(d) a director’s questionnaire in Form MF2, as set out in the First Schedule;
(e) a copy of the business plan;
(f) the name and address of the person’s bankers; and
(g) any other information that the Bank of Zambia may require.
8. Determination of application
(1) The Registrar shall, within 180 days from the date of receipt of a complete application for a licence, consider the application.
(2) Where the Registrar is satisfied that the applicant has satisfied the requirements for the licensing as a micro-finance institution under these Regulations, the Registrar shall approve the application.
(3) The Registrar shall, where an application is approved and upon payment of a fee by the applicant, issue the applicant with a licence in Form MF3, as set out in the First Schedule.
(4) A micro-finance institution shall pay an addition fee for each additional branch.
(5) Where the Registrar is not satisfied that the applicant has complied with the requirements for licensing as a micro-finance institution under these Regulations the Registrar may refuse to grant a licence.
(6) Any person aggrieved by the decision of the Registrar not to grant a licence under these Regulations, may appeal against the decision in accordance with Chapter VIII of the Act.
9. Scope and duration of licence
(1) A licensee shall conduct the business of a micro-finance institution at the place of business specified in the licence.
(2) A licence shall remain valid unless it is revoked or surrendered to the Registrar or it expires.
(3) A licence may be issued subject to such terms and conditions as the Registrar, may impose in accordance with the Act where it conducts its business.
(1) A micro-finance institution shall display or exhibit its licence in a conspicuous place on the approved premises where it conducts its business.
(2) A micro-finance institution shall display a certified copy of its licence in a conspicuous place on the premises of every branch where it conducts its business.
(3) A person who contravenes sub-regulation (1) or (2) commits an offence and shall be liable, upon conviction, to a fine not exceeding 50,000 penalty units or to imprisonment for a term not exceeding one year, or to both.
(1) A licence shall not be transferred, assigned or encumbered in any way:
Provided that a licence may be transferred in the event of an amalgamation or similar corporate restructuring transaction, on such terms and conditions as the Bank may approve.
(2) A person shall not operate or manage a micro-finance institution on behalf of another person, without the prior written approval of the Bank of Zambia.
(3) Any person who contravenes sub-regulation (1) or (2) commits an offence.
(1) The Registrar may revoke a licence if–
(a) it appears to the Registrar that the information provided in the application for the licence is fraudulent or contains a materially false statement;
(b) the licensee has failed, within a period of 12 months from the date of issuance of the licence, to commence to conduct business under the licence;
(c) the licensee is seriously or persistently in breach of any provision of these Regulations;
(d) the licensee has failed to comply with any conditions of its licence or with any directive of the Bank of Zambia;
(e) the licensee has ceased to conduct the business authorised by its licence;
(2) Where a licence is revoked, the licensee shall surrender to the Registrar each copy of the licence on display in every place of business of the licensee and the Registrar shall as soon as practicable publish a notice of the revocation in the Gazette in a newspaper of general circulation in Zambia.
(3) The Bank of Zambia may take such additional steps as it considers necessary to inform the public of the revocation.
(4) Any person aggrieved by the decision of the Registrar to revoke a licence may appeal to the Tribunal constituted under section 113 of the Act.
(5) A decision of the Registrar shall remain in force unless reversed by the Registrar or set aside by the Tribunal or the High Court.
(6) A person whose licence is revoked shall not continue to operate as a micro-finance institution or conduct any micro-finance business.
(7) Any person who contravenes sub-regulation (6) commits an offence and shall be liable, upon conviction, to a fine not exceeding 50,000 penalty units or imprisonment for a term not exceeding two years, or to both.
13. Licensee to honour obligations in spite of revocation of licence
The revocation of a licence shall not relieve the licensee of any obligation incurred or assumed by the licensee during the period of validity of the licence.
PART IV
CATEGORIES OF MICRO-FINANCE INSTITUTIONS
14. Categories of micro-finance institutions
Subject to the other provisions of these Regulations, the Registrar may grant a licence for the following categories of micro-finance institutions–
(a) deposit taking micro-finance institutions; and
(b) non-deposit-taking micro-finance institutions.
15. Services to be provided by deposit taking micro-finance institution
A deposit taking micro-finance institution may provide any of the following services–
(a) credit facilities;
(b) linkage banking;
(c) in-country transfers;
(d) savings; and
(e) such other services as the Bank of Zambia may prescribe.
16. Services to be provided by non-deposit taking micro-finance institution
A non-deposit taking micro-finance institution shall not provide services other than credit facilities.
17. Applicant to designate persons to cover losses etc.
An applicant for a deposit taking micro-finance institution or a non-deposit taking micro-finance institution that is not a company, shall be required to–
(a) designate the persons legally bound to cover losses and capital calls; and
(b) fulfil the requirements of section 37 A of the Act, as prescribed by the Bank of Zambia.
18. Prohibition of change of category without approval of Registrar
Subject to the provisions of these Regulations a micro-finance institution shall not change the category for which it is licensed without the approval of the Registrar.
19. Change of category of licence
(1) A micro-finance institution which intends to change the category of its licence shall apply to the Registrar for the change 90 days prior to the intended change.
(2) An application under sub-regulation (1) shall be in Form MF4 as set out in the First Schedule.
PART V
GOVERNANCE OF A MICRO-FINANCE INSTITUTION
20. Structure of micro-finance institution
(1) A micro-finance institution shall have a board of directors constituting of not less than five members, the majority of whom shall be permanent residents in Zambia.
(2) Members of a board of directors should be capable of demonstrating an understanding of the financial institution’s financial standing and reporting requirement.
(3) A board of directors of the institution shall meet at least once quarterly for the transaction of its business.
21. Management of micro-finance institution
(1) The management of a micro-finance institution shall include–
(a) a chief executive officer; and
(b) a chief financial officer.
(2) The positions referred to in sub-regulation (1) shall not be held by one person.
22. Systems of internal control
A micro-finance institution shall, at all times maintain systems of internal control.
23. Qualification of Director or person in management of micro-finance institution
A person shall not be appointed as a Director, chief executive officer, chief financial officer or manager of a micro-finance institution if that person–
(a) is not a fit and proper person to hold the office in relation to that person’s integrity and relevant knowledge;
(b) is not a natural person;
(c) is below the age of 21 years;
(d) is an undischarged bankrupt;
(e) has been convicted of a felony or any offence involving dishonesty;
(f) has been declared or otherwise adjudged in any official proceedings to be mentally unsound;
(g) is under suspension or has been removed from office by order of the Bank of Zambia;
(h) has been a Director, chief executive officer, chief financial officer or manager of a bank or financial institution whose licence has been revoked or a company which has been adjudged insolvent or has entered into any other arrangement with creditors or taken any other action with similar effect in Zambia or elsewhere, unless that person was not responsible for the insolvency, liquidation, composition with creditors or other action with similar effect unless the Bank of Zambia has given approval for that person to act or continue to act as a Director or to be directly concerned in the management of a micro-finance institution.
24. Suspension or removal of officers
(1) The Bank of Zambia may, by notice in writing addressed to the person concerned, suspend for a period not exceeding six months, a Director, chief executive officer, chief financial officer or manager of a micro-finance institution for failure to take reasonable steps to secure the compliance by the micro-finance institution with the requirements of these Regulations.
(2) The Bank of Zambia may recommend to a micro-finance institution the removal from office of a Director, a chief executive officer, a chief financial officer or a manager referred to in sub-regulation (1) without first suspending the Director, chief executive officer, chief financial officer or manager.
25. Immunity of Registrar etc.
No act, matter or thing done by the Registrar or any officer or person employed by the Bank in exercise of performance or purported exercise or performance, in good faith, of any power or function under these Regulations shall give rise to any action, claim, liability, suit or demand against the Registrar or any officer or person concerned.
PART VI
OPERATION OF MICRO-FINANCE INSTITUTION
26. Minimum primary and regulatory capital
(1) The Bank of Zambia shall prescribe–
(a) the minimum primary and regulatory capital of a micro-finance institution; and
(b) the conditions under which funds may be recognised and measured as capital of a micro-finance institution:
Provided that for purposes of paragraph (a) the minimum capital of a micro-finance institution shall be as set out in Part I of the Second Schedule.
(2) The Bank of Zambia shall take appropriate supervisory action in accordance with sections 81 to 84 of the Act in the case of a micro-finance institution which contravenes the provisions of those sections.
(3) A deposit taking micro-finance institution that is operating at the date of the coming into force of these Regulations that does not meet the minimum capital requirements shall be required to build up its capital to the prescribed level not later than two years from the coming into force of these Regulations.
(4) Any Director or person concerned in the management of a micro-finance institution referred to in sub-regulation (3) who fails to take reasonable steps to secure the compliance by the micro-finance institution with sub-regulation (3) commits an offence.
A micro-finance institution which provides credit facilities to any of its directors or members of staff or related persons shall do so in accordance with the regulations of the Bank of Zambia on insider lending.
28. Prudence in business conduct
A micro-finance institution shall–
(a) conduct its business with integrity, prudence and professional skill;
(b) focus on the institutional sustainability of service to its target customers; and
(c) engage only in bona fide transactions.
A micro-finance institution shall not extend credit to one person in excess of such sum as may be prescribed by the Bank of Zambia from time to time.
30. Disclosure of cost of borrowing
(1) A deposit taking micro-finance institution that provides credit facilities to a customer shall at the time of providing the service, in a statement in writing, disclose to the customer concerned the cost of borrowing.
(2) The statement referred to in sub-regulation (1) shall be in Form MF5, set out in the First Schedule.
31. Micro-finance institution to display customer rights, responsibilities, etc.
A micro-finance institution shall display in a conspicuous place on the premises of every branch where it conducts business a notice containing–
(a) a clear and simple summary of the business conducted by the micro-finance institution;
(b) information on customer rights and responsibilities;
(c) details of the financial products offered; and
(d) the terms under which any financial product is offered.
32. Branches of existing micro-finance institution
Unless the conditions of a licence limit or restrict a financial institution to one or more specific sites or locations, a micro-finance institution may conduct business at any place or places in Zambia:
Provided that within 14 days of opening a new branch, a micro-finance institution shall notify the Bank of Zambia, in writing, of the fact and of its location.
33. Closure of micro-finance institution
A micro-finance institution intending to close a place of business shall at least 60 days before closing such place, notify the Bank of Zambia, in writing, of its intention to do so.
34. Notice of change in shareholding, directors or senior management
A micro-finance institution shall not without the prior written approval of the Bank of Zambia make any changes regarding its shareholders, directors, chief executive officer, chief financial officer or any manager.
(1) A deposit taking micro-finance institution shall be–
(a) a company incorporated under the Companies Act; or
(b) a body corporate, created under an Act of Parliament, that is recognised by the Bank of Zambia as an acceptable form of a financial institution and falls, within a defined category of financial institution, as determined by the Bank of Zambia;
(2) A person shall not, without the written approval from the Bank of Zambia–
(i) acquire any beneficial interest in the voting shares of a deposit taking micro-finance institution; or
(ii) enter into any voting trust or other agreement;
that would enable that person or another person to control more than 25 per centum of the total votes cast on any general resolution at a general or special meeting of a deposit taking micro-finance institution.
(3) A non-deposit taking micro-finance institution may be–
(a) a company incorporated under the Companies Act;
(b) a non-governmental organisation registered under the Societies Act; or
(c) a cooperative registered under the Co-operative Societies Act.
(4) Where a non-deposit taking micro-finance institution is incorporated under the Companies Act, a person shall not, without the prior written approval of the Bank of Zambia–
(a) acquire any beneficial interest in the voting shares of such a non-deposit taking micro-finance institution; or
(b) enter into any voting trust or other agreement;
that would enable that person or another person to control more than 50 per centum of the total votes cast on any general resolution at a general or special meeting of the non-deposit taking micro-finance institution.
36. Control of micro-finance institution
(1) A person who has de jure or de facto control of a micro-finance institution, shall not acquire or maintain dejure or defacto control of any other micro-finance institution.
(2) Any person who has de jure or de facto control of more than one micro-finance institution, shall within a period of two years of the date of the coming into force of these Regulations, comply with the provisions of sub-regulation (1).
(3) A person who contravenes sub-regulation (2) commits an offence.
PART VII
SUPERVISION OF MICRO-FINANCE INSTITUTIONS
37. Inspection of micro-finance institutions
(1) The Bank of Zambia or any person authorised by the Bank of Zambia, may at any time cause an inspection to be made of any micro-finance institution and of its books or accounts at any place where the micro-finance institution conducts its business.
(2) The micro-finance institution shall cause its books and accounts to be produced to an inspector and shall ensure that its staff furnishes such information as the inspector may reasonably require for the purposes of the inspection.
(3) Any person who obstructs, hinders or endeavours to obstruct an inspector or hinder any inspection of a micro-finance institution or its books and accounts commits an offence.
38. Submission of returns by micro-finance institution
(1) The Bank of Zambia shall prescribe reporting formats and the frequency of reporting for a micro-finance institution, including:
(a) balance sheets;
(b) income statements;
(c) computation of capital;
(d) computation of schedules;
(e) liquidity statements;
(f) loan repayments schedule; and
(g) such other information that the Bank of Zambia may consider necessary.
(2) A micro-finance institution which contravenes sub-regulation (1) commits an offence and shall be liable, upon conviction, to a fine not exceeding 1,000 penalty units and in the case of a continuing breach, to a fine of 500 penalty units for every day during which the breach continues.
(1) A micro-finance institution shall submit the following information to the Bank of Zambia, its shareholders and other interested persons:
(a) in the case of a micro-finance institution, which is a company, an audited financial statement or management accounts; and
(b) in the case of a micro-finance institution, which is not a company–
(i) management accounts; and
(ii) where available, audited accounts.
(2) A micro-finance institution intending to enter into any significant business arrangement, joint venture or financial arrangement with another micro-finance institution, bank or any other person, shall notify the Bank of Zambia 30 days prior to the proposed agreement.
A deposit-taking micro-finance institution shall display a balance sheet and income statement in a conspicuous place on its business premises.
Every micro-finance institution shall pay to the Bank of Zambia an annual on-refundable supervision fee as et out in Part II of the Second Schedule.
Every micro-finance institution shall maintain liquid assets as defined in the Act, in ratios and measures determined by the Bank of Zambia.
PART VIII
GENERAL PROVISIONS
(1) Subject to subsection (2) where a person issues or takes part in the issuance of a document which is false in any material particular, the person and every other person who signed such document commits an offence and shall be liable, upon conviction, to a fine not exceeding 50,000 penalty units or to imprisonment for a term not exceeding two years, or to both.
(2) A person does not commit an offence under this regulation if the person did not know and could not reasonably be expected to have known that the document was false when the person signed it, issued it or took part in its issue.
44. Confidentiality of transactions
A micro-finance institution and its staff shall ensure that all transactions are conducted in strict confidence and that the confidentiality of customers is maintained.
The Bank of Zambia may for purposes of these Regulations require a person to submit vital statistics in Form MF6 as set out in the First Schedule.
The fees set out in Part II of the Second Schedule shall be payable in respect of the matters specified therein.
Any person who–
(a) obstructs any person in the exercise of any power conferred upon the person under these Regulations;
(b) fails to provide information required under these Regulations;
(c) with intent to evade any provisions of these Regulations destroys, mutilates or hides any document;
(d) contravenes a duty imposed by these Regulations;
commits an offence and is liable, upon conviction, to a fine not exceeding 50,000 penalty units or to imprisonment for a term not exceeding two years, or to both.
48. Offences by body corporate
Where the offence is committed by a body of persons–
(a) in the case of a body corporate, every Director or officer of that body commits an offence;
(b) in the case of a micro-finance institution that is not incorporated, every manager, partner or member of the board of directors commits an offence;
unless the Director, officer, partner or manager proves to the satisfaction of the court that the act constituting an offence was done without the knowledge, consent or connivance of the Director, officer, partner or manager, or that, the person attempted to prevent the commission of the crime having regard to the circumstances of the case.
Any person who contravenes the provisions of these Regulations for which no penalty is provided shall be liable, upon conviction, to a fine not exceeding 50,000 penalty units or to a term of imprisonment not exceeding two years, or to both.
50. Compliance by existing micro-finance institution
(1) Subject to sub-regulation (2) a micro-finance institution which is in existence on the commencement of those Regulations shall apply for an appropriate licence within 30 days from the commencement of these Regulations.
(2) Except for the requirement on ownership and capital adequacy, an existing micro-finance institution shall comply with these Regulations within six months from commencement of these Regulations.
(3) An existing micro-finance institution within any legal person that is not a registered financial institution shall be registered separately as a legal person in accordance with these Regulations and shall pay such application fee as may be determined by the Bank of Zambia.
[Regulations 7, 8, 19, 30 and 45]
FORM MF 1
THE BANKING AND FINANCIAL SERVICES (MICRO-FINANCE) REGULATIONS, 2006
[Regulation 7]
BANK OF ZAMBIA
APPLICATION FOR REGISTRATION AND OPERATING AND AS A MICRO-FINANCE INSTITUTION IN ZAMBIA
(Please read the entire Form before completing in block capitals)
1. NAME OF APPLICANT (Organisation).................................................................................................................................
2. (a) PHYSICAL ADDRESS OF APPLICANT’S HEAD OFFICE..............................................................................................
(b) PHYSICAL ADDRESS (ES) OF APPLICANT’S BRANCH (ES).................................................................................
3. APPLICANT’S POSTAL ADDRESS ....................................................................................................................................
4. CONTACT TELEPHONE NUMBER............................................................................................................................... (Please state country and area codes if based outside the Republic of Zambia).
5. CONTACT FACSIMILE NUMBER...............................................................................................................................(Please state country and area codes if based outside the Republic of Zambia).
6. E-MAIL ADDRESS (Use small letters as per standard)
7. NATURE OF LICENCE SOUGHT (Tick the appropriate box)
deposit-taking micro-finance licence
Non-deposit taking micro-finance licence
8. PROPOSED BOARD OF DIRECTORS/GOVERNMENT BODY: STATE NAME, NATIONALITY AND WHETHER RESIDENT OR NON-RESIDENT
(Non-executive directors or non-executive members of the governing body must be in the majority and more than half the directors or members of the governing body must reside within the Republic of Zambia)
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Resident/Non-Resident |
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9. THE SHARE CAPITAL OF THE MICRO-FINANCE INSTITUTION
(a) Authorised capital ....................................................................................
(b) Issued capital ..........................................................................................
(c) Paid up capital .........................................................................................
(Documentary evidence of paid up capital must accompany the application. For example, bank statement and written assurance by external auditor: If part of the paid up capital is in form of fixed assets, the Registrar may appoint a valuer to assess the value of such assets at the applicant’s expense. Such assets must be essential to the operation of a micro-finance business. Documentary evidence of title to the assess must be made available to the Registrar on demand).
(d) State the source of capital ........................................................................
10. (a) SHAREHOLDERS OR SHAREHOLDING OF THE MICRO-FINANCE INSTITUTION
(Note: The Banking and Financial Services Act prohibits trusts from owning shares either directly or indirectly in a bank or financial institution)
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Number of Shares |
per cent of Total Shares |
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Nationality |
Place of Permanent Residence |
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(c) WHERE SOME SHAREHOLDERS MENTIONED IN 10 (a) ABOVE ARE UNNATURAL PERSONS/CORPORATE BODIES, STATE THEIR NAMES AND PLACE OF REGISTRATION/INCORPORATION
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Place of Registration/Incorporation |
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(d) STATE BELOW THE NAMES OF NATURAL PERSONS WHO ARE BENEFICIAL OWNERS OF SHARES IN THE UNNATURAL PERSONS/CORPORATE BODIES MENTIONED IN 10 (c) ABOVE:
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Shareholder |
per cent of Total Shares |
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Business Interests |
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(b) BUSINESS/COMPANIES ASSOCIATED/AFFILIATED WITH DIRECTORS/MEMBERS OF THE GOVERNING BODY/BUSINESS/COMPANIES IN WHICH DIRECTORS/GOVERNING BODY MEMBERS HOLD A SUPERIOR POSITION IN ZAMBIA.
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Business Interests |
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12. IN THE CASE OF A FOREIGN-OWNED/CONTROLLED MICRO-FINANCE INSTITUTION
(That is, if more than 50% of voting shares are held by non-Zambians residents/corporations registered outside Zambia and are part of an international banking/financial micro-finance group).
(a) Certificate of the regulatory authority governing bank/financial institutions/micro-finance institutions of the country or political subdivision of the country in which the head office of the bank/financial institution/micro-finance institution, is domiciled, certifying that the bank/financial institution/micro-finance institution has been duly incorporated or established and when it was established by, pursuant to, or in accordance with the laws of that country or political subdivision and the title or citation of these laws.
................................................................................................................
................................................................................................................
(b) A certified copy of the resolution of the directors of the bank/financial institution/micro-finance institution authorising the establishment of the subsidiary in Zambia.
(c) State who is going to perform the consolidated supervision of the group and whether the said supervisor is aware of the applicant’s plan to set up business in Zambia.
(d) Organisation (organization chart) showing how the applicant fits in the group.
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13. DETAILS OF THE PROPOSED SENIOR EXECUTIVES OF THE MICRO-FINANCE INSTITUTION TO BE REGISTERED.
(Please attach curriculum vitae of each one of them).
(a) CHIEF EXECUTIVE OFFICER/MANAGING DIRECTOR:
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Nationality |
Academic/Professional Qualification |
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14. NAME AND ADDRESS OF APPLICANT’S PROPOSED AUDITORS
(where applicable)
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15. PLEASE LODGE WITH THIS APPLICATION THE FOLLOWING DOCUMENTS RELATING TO THE MICRO-FINANCE INSTITUTION TO BE REGISTERED:
(a) Articles of Association/Member’s Rules/Designation of voting rights and subordination of claims to depositors and other creditors;
(b) Evidence of incorporation/registration;
(c) Duly completed directors/governing body members questionnaire;
(d) Documentation indicating the location of the micro-finance institution;
.............................................................................................................................
(e) business plan; and
(f) projected balance sheet and income statement with relevant assumptions for at least 3 years.
16. DOCUMENTS RELATING TO THE PROMOTERS/SHAREHOLDERS OF THE MICRO-FINANCE INSTITUTION TO BE REGISTERED IN CASE THEY ARE CORPORATE BODIES/UNNATURAL PERSONS:
(a) Articles of Association/Members’ Rules;
(b) Evidence of incorporation/registration; and
(c) Audited balance sheet and income statement for the last completed financial year immediately preceding the application.
17. *I/WE HEREBY CERTIFY THAT TO THE BEST OF MY/OUR KNOWLEDGE AND BELIEF THAT THE INFORMATION GIVEN ABOVE IS CORRECT AND TRUE.
18. CHAIRMAN .............................................................................................................................
(Signature)
.............................................................................................................................
(Full names)
19. CHIEF EXECUTIVE OFFICER .........................................................................
(Signature)
.........................................................................
(Full names)
20. DATE. ................................. PLACE ..................................................
(Date, month, year) (City/town, country)
*Delete where not applicable
Note: Where the space provided in this Form is insufficient to furnish required details, please use a separate sheet of paper indicating the relevant item of the application Form. The Chairman/chief executive officer or any duly authorised representative of the applicant should duly sign such attachment(s).
FORM MF 2
THE BANKING AND FINANCIAL SERVICES (MICRO-FINANCE) REGULATIONS, 2006
BANK OF ZAMBIA
DIRECTORS’ QUESTIONNAIRE
[Regulation 7]
STATEMENT BY INDIVIDUALS WHO ARE HOLDING, OR ARE PROPOSING HOLD, THE OFFICE OF A DIRECTOR OR EXECUTIVE OFFICER OF A MICRO-FINANCE INSTITUTION OR A CONTROLLING COMPANY
(If insufficient space is provided, please attach a separate sheet)
(Confidential and not available for inspection by the public)
1. Name of institution in connection with which this questionnaire is being completed (A the institution):
…………………………………………………………………………………………………………………………………
2. Your surname
…………………………………………………………………………………………………………………………………
3. Your full forename(s)
…………………………………………………………………………………………………………………………………
4. Former surname (s) and or forename (s) by which you may have been known:
…………………………………………………………………………………………………………………………………..
5. Please state in what capacity you are completing this questionnaire, i.e. as a current or prospective Director, executive officer or combination of these. Please state your full title and describe the particular duties and representatives attaching to the position (s) that you hold or will hold. If you are completing this Form in the capacity of Director, indicate whether, in your position as Director, you have or will have executive responsibility for the management of the institution’s business. In addition, please provide a copy of your curriculum vitae, unless it has already been provided.
…………………………………………………………………………………………………………………………………
6. Residential address
…………………………………………………………………………………………………………………………………
7. Any previous residential address (es) during the past 10 years;
…………………………………………………………………………………………………………………………………
8. Date and place of your birth (including town or city)
………………………………………………………………………………………………………………………………….
9. Your nationality and how it was acquired (birth, naturalisation or marriage):
…………………………………………………………………………………………………………………………………..
10. Name (s) and address (es) of your bankers during the past 10 years:
…………………………………………………………………………………………………………………………………..
11. Your professional qualifications and year in which they were obtained:
…………………………………………………………………………………………………………………………………..
12. Your occupation and employment now and during the past 10 years, including the name of your employer in each case, the nature of the business, the position held and relevant dates:
.…………………………………………………………………………………………………………………………………
13. Of what bodies corporate (other than the institution) are you a Director or an executive officer and since when?
…………………………………………………………………………………………………………………………………..
14. Do you have any direct or indirect interest representing 15 per centum or more of the issued capital of any corporate (other than the institution) that is now registered, or has applied for authorization, under the Act? If so give particulars:
………………………………………………………………………………………………………………………………..
15. Of what bodies corporate other than the institution and those listed in reply to Question 13 have you been a Director or an executive officer at any time during the past 10 years? Give relevant dates:
………………………………………………………………………………………………………………………………….
16. Do any of the bodies corporate listed in reply to Questions 12, 13, 14 and 15 maintain a business relationship with the institution? If so, give particulars:
…………………………………………………………………………………………………………………………………
17. Do you hold or have you ever held or applied for a licence or equivalent authorization to carry on any business activity in Zambia or elsewhere? If so, give particulars. If any such application was refused or withdrawn after it was made or any authorization was revoked, give particulars:
………………………………………………………………………………………………………………………………….
18. Does any institution with which you are, or have been associated as a Director or executive officer hold, or has it ever held or applied for a licence or equivalent authorization to carry on any business activity? If so, give particulars. If any such application was refused, or was withdrawn after it was made or an authorization revoked, give particulars:
………………………………………………………………………………………………………………………………….
19. Have you at any time been convicted of any offence, excluding:
(a) any offence committed when you were under 18 years, unless the same was committed within the last 10 years.
(b) any road traffic offence; or
(c) any political offence?
If so, give particulars of the court by which you were convicted, the offence, penalty imposed and the date of the conviction:
…………………………………………………………………………………………………………………………………
20. Have you, in Zambia or elsewhere, been censured, disciplined, warned against some conduct, or made the subject of a court order at the instigation of a regulatory authority or professional body to which you belong or belongs? Have you ever held a practising certificate subject to conditions? If so, give particulars:
…………………………………………………………………………………………………………………………………..
21. Have you, or has any body corporate, partnership or unincorporated institution which you are, or have been associated as a Director or executive officer, been subject of an investigation, in Zambia or elsewhere, by or at the instigation of a government department or agency, professional association or other regulatory body? If so, give particulars:
…………………………………………………………………………………………………………………………………..
22. Have you, in Zambia or elsewhere, been dismissed from any office employment, or subject to disciplinary proceedings by your employer or barred from entry to any profession or occupation? If so, give particulars:
…………………………………………………………………………………………………………………………………..
23. Have you ever been declared insolvent (either provisionally or finally) by a court in Zambia or elsewhere, or has a bankruptcy petition ever been served on you? If so, give particulars:
…………………………………………………………………………………………………………………………………
24. Have you, in connection with the formation or management of any body corporate, partnership or unincorporated institution, been adjudged by a court in Zambia or elsewhere, civilly liable for any fraud, misfeasance or other misconduct by you towards any members thereto? If so, give particulars:
…………………………………………………………………………………………………………………………………
25. Has any body corporate, partnership or unincorporated institution with which you were associated as a Director or executive officer, or executive officer, in Zambia or elsewhere, been wound up, made subject to an administration order, otherwise made any compromise or arrangement with its creditors or ceased trading, either while you were associated with it or within one year after you ceased to be associated with it, or has anything analogous to any of these sevens occurred under the laws of any other jurisdiction? If so, give particulars:
…………………………………………………………………………………………………………………………………
26. Have you been concerned with the management or conduct of the affairs of any institution that, by reason of any matter relating to a time when you were so concerned, has been censured, warned as to future conduct, disciplined or made the subject of a court order at the instigation of any regulatory authority in Zambia or elsewhere? If so, give particulars:
…………………………………………………………………………………………………………………………………
27. In carrying out your duties will you be acting on the directors or institutions of any other individual or institution? If so, give particulars:
………………………………………………………………………………………………………………………………….
28. Do you, or does any related party of whom you are aware, undertake business with this institution? If so, give particulars:
………………………………………………………………………………………………………………………………….
29. How many shares in the institution are registered in your name or the name of a related party? If applicable, give name (s) and class of shares:
…………………………………………………………………………………………………………………………………
30. In how many shares in the institution (not being registered in your name or that of a related party) are related parties beneficially interested?
……………………………………………………………………………………………………………………………………
31. Do you, or does any related part, hold any shares in the institution as trustee or nominee? If so, give particulars:
…………………………………………………………………………………………………………………………………
32. Are any of the shares in the institution mentioned in reply to Questions 29, 30 and 31 equitable or legally charged or pledged to any party? If so, give particulars:
………………………………………………………………………………………………………………………………..
33. What proportion of the voting power at any general meeting of the institution (or of another body corporate of which it is a subsidiary) are you to any related party entitled to exercise or control the exercise?
…………………………………………………………………………………………………………………………………
34. If the exercise of the voting power at any general meeting of the institution, or of another body corporate of which it is a subsidiary, is or may be controlled by one or more of your associates or any related party, give the proportion of the voting power so controlled in each case and identity of each associate.
…………………………………………………………………………………………………………………………………
35. Are you currently, or do you, other than in a professional capacity, expect to be, engaged in any litigation in Zambia or elsewhere? If so, give particulars.
…………………………………………………………………………………………………………………………………
36. Do you have a basic knowledge and understanding of the risks to which financial institutions are exposed?
…………………………………………………………………………………………………………………………………
37. Do you, at all times while acting in your capacity as a Director or executive officer of the institution, undertake to:
(a) act in good faith towards the financial institution (s) in the group;
(b) avoid conflicts between your other interests and the interest of the financial institution (s) in the group; and
(c) place the interest of the financial institution (s) in the group and the depositors above all other interests?
………………………………………………………………………………………………………………………………
38. Have you acquainted yourself with, and do you understand, the extent of the rights and powers, as well as your responsibilities and duties and duties as a Director of the institution, as contained in the applicable law? (To be completed only by directors or prospective directors.)
…………………………………………………………………………………………………………………………………
DECLARATION
I, …………………………………………………………………………………… hereby declare the following:
This statement consists of ………………………………. pages, each signed by me. The content of this declaration is true to the best of my knowledge and belief. I am aware that should it be submitted as evidence and I know the contents to be false or not to be true, whether in part or in full, I may be liable to prosecution.
I understand that for as long as I continue to be a Director or executive officer of the institution, I will notify the Registrar of any material changes to, or affecting the completeness or accuracy of, the information supplied by me in items 1 – 39 as soon as possible, but in any event not later than 21 days from the day the changes come to my attention.
I know and understand the content of this declaration. I have*/do not have* objections to taking the prescribed oath.
I consider the prescribed oath to be binding */not binding* on my conscience.
…………………………………………………………………………………… SIGNATURE OF DEPONENT
I certify that the above statement was taken by me and that the deponent has acknowledged that he
COMMISSIONERS OF OATHS
FULL NAMES: ………………………………………………………………………..
EX OFFICIO: ………………………………………………………………………….
AREA: ………………………………………………………………………….
ADDRESS: …………………………………………………………………………..
DECLARATION BY CHAIRMAN OF A FINANCIAL INSTITUTION OR AUDITOR IN CASE OF A NEW FINANCIAL INSTITUTION
I, the undersigned ………………………………………………………………………………………………………
being Chairman of the Board or Directors
NAME: ………………………………………………………………………………
SIGNED: …………………………………………………………………………..
DATE: …………………………………………………………………………….
FORM MF 3 (a)
THE BANKING AND FINANCIAL SERVICES (MICRO-FINANCE) REGULATIONS, 2006
BANK OF ZAMBIA
LICENCE TO OPERATE A NON-DEPOSIT TAKING MICRO-FINANCE INSTITUTION
[Regulation 8]
| Serial No.………………………….. Licence Number: …………………. |
| This is to certify that …………………………………………………………………………………………………………………………………… is licensed to carry on the business of micro finance services at ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….. This licence has been issued under the Banking and Financial Services Act and (Micro finance) Regulations, 2004 and shall remain valid until it expires, is revoked or surrendered to the Registrar, subject to the provisions of the Act or the said Regulations.……………………………………… ………………………………… Registrar ............................. Date |
FORM MF 3 (b)
THE BANKING AND FINANCIAL SERVICES (MICRO-FINANCE) REGULATIONS, 2006
BANK OF ZAMBIA
LICENCE TO OPERATE A DEPOSIT TAKING MICRO-FINANCE INSTITUTION
[Regulation 8]
| This is to certify that ………………………………………………………………………………………………… ………………………………… is licensed to carry on the business of micro finance services at ………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..This licence has been issued under the Banking and Financial Services Act and (Micro finance) Regulations, 2004 and shall remain valid until it expires, is revoked or surrendered to the Registrar, subject to the provisions of the Act or the said Regulations.……………………………………… ………………………………… Registrar ............................................. Date |
FORM MF 4
THE BANKING AND FINANCIAL SERVICES (MICRO-FINANCE) REGULATIONS, 2006
BANK OF ZAMBIA
APPLICATION FOR CHANGE OF CATEGORY OF MICRO-FINANCE
INSTITUTION’S LICENCE
[Regulation 19]
[Please read the Form before completing in block letters. A duly signed resolution of the board of directors authorising change of category of licence of category of licence must be attached to the application]
1. Name of applicant (the organization)........................................................
2. Category of Current Micro-finance Licence (Tick appropriate box):
[ ] Deposit-Taking Micro-finance Licence
[ ] Category of Current Micro-finance Licence
[ ] Non-Deposit-Taking Micro-finance Licence
3. Category of Current Micro-finance Licence (Tick appropriate box):
[ ] Deposit-Taking Micro-finance Licence
[ ] Non-Deposit-Taking Micro-finance Licence
4. Reason (s) for seeking change of category of licence
.................................................................................................................................
.................................................................................................................................
.................................................................................................................................
5. Total asset size (on date of application)...............................................................
(State fixed assets net of depreciation).
6. Loan size (net) (on date of application ...............................................................
7. Primary Capital (on date of application)...............................................................
8. Total saving (on date of application) .....................................................................
9. *I/WE HEREBY CERTIFY THAT THE ABOVE INFORMATION IS CORRECT AND TRUE.
10. Chairman of the board (Full names).............................................................................
...............................................................
(Signature)
11. Chief executive officer (Full names)...............................................................
...............................................................
(Signature)
12. Date ............................................................... place...............................................................
(Date, month, year) (City/town)
FORM MF 5
THE BANKING AND FINANCIAL SERVICES (MICRO-FINANCE) REGULATIONS, 2006
BANK OF ZAMBIA
CONTENTS OF DISCLOSURE STATEMENT
[Regulation 30]
1. The name and address of the Micro-finance Institution.
2. The name and address of the borrower.
3. A description of any property to be used as security and its location.
4. A description of any guarantee of other collateral.
5. The date when the first payment on the loan is due.
6. In the case of any Mortgage, whether it is first, second, etc.
7. The principle of the loan, including:
(a) the total amount of all charges to be financed; and
(b) the net amount of money to be paid to the borrower or to be disbursed at the borrower’s discretion.
8. The rate of interest expressed as a rate per annum, if that rate does not vary.
9. The initial rate of interest expressed as a rate per annum, if the rate varies from time to time.
10. A description of any factors that would cause the rate of interest to vary.
11. The length of the term of the loan.
12. The period during which an offer to a customer is valid before it expires.
13. A description of any factors that would cause the term of the loan to vary.
14. The total cost of borrowing over the term of the loan expresses as a rate varies from time to time.
15. A list of each charge to be financed
16. A description of any terms and conditions applicable to pre-payment of the principle
17. A description of any charge or penalty that would be imposed for failure to make any payment or to repay the loan when due.
18. The date of statement
19. The name and signature of the representative of the Micro-finance Institution.
FORM MF 6
THE BANKING AND FINANCIAL SERVICES (MICRO-FINANCE) REGULATIONS, 2006
[Regulation 45]
BANK OF ZAMBIA
VITAL STATISTICS FORM
Part A (This Part Applies to Zambian Citizens Only)
Name: …………………………………………………………………………………………………………
Date of birth: ………………………………………………………………………………………………….
Identity card number: …………………………………………………………………………………….….
Residential address: …………………………………………… Telephone No. ………………....……
Business address: …………………………………………………Telephone No. ……………….….…
Marital Status: ……………………………………….. No. of children …………………....……………
Passport No./NRC No. :…………………Expiry date (Passport No./NRC indicate: ………..………..
Name of Spouse: ……………………………………………….. Identity card No. :…………………….
Next of kin: ……………………………………………… Name of parents: ……………………....…….
PART B (This Part Applies to non-Zambian Citizens Only)
Name: ……………………………………......................................................................................……
Residential address: ……………………………………................................................................................................................................................................................................................................................................................
Immigration Permit No: ………………………………………… Passport No: ……………………………
Expiry date of passport: ……………………………… Date of entry into Zambia: ……………….....…..
Work permit No: ……………………………………. Valid from…………………….. to: ………………………
PART B (Applies to both Zambians and non-Zambians)
Education Background: …………………………………………………………………………………………………....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
Employment Record: ………………………………………………………………………………………………........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
Last Employer: …..…………………………………..................................................................................................................................................................................…………………………………………………………………………
Employer’s reference: ………………………………………………………………………………………………….....................................................................................................................................................................................................
Signature: ……………………………………………………..
[Regulations 26, 41 and 46]
PART I
CAPITAL REQUIREMENTS FOR MICRO-FINANCE INSTITUTIONS
[Regulation 26]
Minimum Capital Requirement
Deposit Taking MFI
Non Deposit-Taking MFI
K250 Million
K25 Million
PART II
PRESCRIBED FEES
[Regulations 41 and 46]
Deposit-Taking Micro-finance Micro-finance
Non Deposit-Taking Micro-finance Institution
Licence application fee
K5,400,000.00
K1,000,000.00
Annual Licence fee
K2,700,000.00
K600,000.00
Supervision fee
0.02% of monthly average deposit for preceding 12-month period
None
BANKING AND FINANCIAL SERVICES (RESTRICTION ON KWACHA LENDING TO NON-RESIDENT) REGULATIONS
[Section 124]
Arrangement of Regulations
Regulation
3. Restriction on lending to non-resident
SI 44 of 2009.
These Regulations may be cited as the Banking and Financial Services (Restriction on Kwacha Lending to Non-Residents) Regulations.
In these Regulations, unless the context otherwise requires–
"financial service provider" has the meaning assigned to it in the Act;
"kwacha" means the Zambian Kwacha;
"non-resident" means a financial or non-financial institution, or a natural person, that is not domiciled in Zambia; and
"foreign exchange derivative transaction" means a financial transaction, or a similar transaction in whatever form or name, whose value is derived from price changes in one or more underlying assets.
3. Restriction on lending to non-residents
(1) A financial service provider shall not extend a loan or any other form of credit, or provide any source of kwacha funding to a non-resident for, a period of less than one year.
(2) Notwithstanding the generality of sub-regulation (1), a financial service provider shall not–
(a) provide a loan in kwacha to a non-resident for a maturity period of less than one year;
(b) provide any intraday overdraft to a non-resident;
(c) place any kwacha in the form of deposits, or other similar means, in a non-resident institution, of a period of less than one year:
Provided that where options are embedded in the deposits, the options may be exercised within a period of not less than one year.
(d) invest in kwacha denominated assets issued by a non-resident, except for those assets with residue maturity of at least one year at the time of investment;
(e) unless proof of underlying economic activity is shown, engage in foreign exchange derivative transactions, including but not limited to swaps and forward transactions, in which one of the currencies is the kwacha; or
(f) transfer any kwacha to a non-resident without any underlying economic activities in Zambia, except for settlement of non-resident accounts with local financial institutions related to domestic economic activities such as equity participation, securities transactions, foreign debt repayment in kwacha, import letters of credit in kwacha, goods and services purchased in Zambia, and non-residents living costs in Zambia.
Regulation 3 does not apply to following transactions–
(a) any cross currency swap forward or other derivative transaction in which the kwacha is not of the currencies; and
(b) investing in Zambia kwacha denominated assets issued by a non-resident with a specific activity.
The bank of Zambia may, for purposes of these Regulations, request a financial service provider to furnish details of any of its operations concerning a non-resident borrowing and lending in the domestic kwacha market.
(1) A person who–
(a) contravenes these Regulations;
(b) without reasonable excuse, fails or refuses to provide information, or produce any document, record or report required under these Regulations; or
(c) makes or causes to be made, an unauthorised entry, alteration or erasure in any document, record or report of financial service provider, or destroys, mutilates or conceals any document, record or report relating to a financial service provider;
commits an offence and is liable, upon conviction, to a fine not exceeding 50 thousand penalty units or to imprisonment for a term not exceeding two years, or to both.
(2) Where an offence under these Regulations is committed by a body corporate, every Director or senior officer of the body corporate shall be liable, upon conviction, as if the Director or senior officer personally committed the offence, unless the Director or senior officer proves to the satisfaction of the court that the act constituting the offence was done without the knowledge, consent or connivance of the Director or senior officer or that the Director or senior officer took reasonable steps to prevent the commission of the offence.
(1) A financial service provider shall, within 30 days from the publication of these Regulations, inform the Bank of Zambia of the financial transactions entered into before the commencement of these Regulations.
(2) The Bank of Zambia shall, upon receipt of any report made under sub-regulation (1), determine, on a case by case basis, whether or not to exempt the financial transactions from the application of these Regulations for purposes of completion of the transactions.
BANKING AND FINANCIAL SERVICES (BANK HOLIDAY) (DECLARATION) ORDER
[Sections 46 and 124]
Arrangement of Paragraphs
Paragraph
3. Declaration of bank holiday
SI 74 of 2012.
In this Order, unless the context otherwise requires–
"legal tender" means the notes or coins made by or issued under the authority of the Bank of Zambia; and
"re-denominated currency" means the legal tender that is effective from Tuesday, 1st January, 2013.
3. Declaration of bank holiday
(1) It is hereby declared that Monday, 31st December, 2012 shall be a bank holiday throughout the Republic.
(2) A financial service provider shall, on the date referred to in paragraph (1), complete the preparations for the launch of the re-denominated currency, which shall take place on Tuesday, 1st January, 2013.
(3) Except as otherwise provided in this Order, on the bank holiday, a financial service provider–
(a) shall be closed for business with the public; and
(b) shall not provide any banking or financial service, or automated teller machine services.
(4) Paragraph (3) does not apply to a branch of a financial service provider which operates at the airport or a border post.
BANKING AND FINANCIAL SERVICES ACT (COMMENCEMENT) ORDER
[Section 1]
Arrangement of Paragraphs
Paragraph
2. Commencement of Act No. 7 of 2017
SI 38 of 2018.
This Order may be cited as the Banking and Financial Services Act (Commencement) Order, 2018.
2. Commencement of Act No. 7 of 2017
The Banking and Financial Services Act, 2017, shall come into operation on the date of publication of this Order.
BANKING AND FINANCIAL SERVICES (CLASSIFICATION AND PROVISIONING OF LOANS) (REVOCATION) ORDER
[Section 169]
Arrangement of Paragraphs
Paragraph
2. Revocation of S.I. No. 142 of 1996
SI 31 of 2020.
This Order may be cited as the Banking and Financial Services (Classification and Provisioning of Loans) (Revocation) Order, 2020.
2. Revocation of S.I. No. 142 of 1996
The Banking and Financial Services (Classification and Provisioning of Loans) Regulations, 1996 are revoked.
{/mprestriction}