CHAPTER 360
BANK OF ZAMBIA ACT

Arrangement of Sections

   Section

PART I
PRELIMINARY

   1.   Short title

   2.   Interpretation

PART II
THE BANK OF ZAMBIA

   3.   Establishment of the Bank

   4.   Functions of the Bank

   5.   Powers of the Minister

   6.   Capital

   7.   Profit and loss

   8.   General reserve fund and other funds

   9.   Policy statement

PART III
ADMINISTRATION

   10.   Governor

   11.   Deputy Governors

   12.   Board of Directors

   13.   Composition of Board

   14.   Tenure of office

   15.   Disqualifications

   16.   Proceedings of the Board

   17.   Seal of the Bank

   18.   Committees of Board

   19.   Immunity of Directors

   20.   Conflict of interest and disclosure of interest

   21.   Staff of the Bank

   22.   Oath or declaration of secrecy

   23.   Prohibition of publication of or disclosure of information to unauthorised persons

   24.   Financial year

   25.   Books of account

   26.   Audit of accounts

   27.   Annual report

   28.   Reports on monthly assets and liabilities

PART IV
MONETARY UNITS, NOTES AND COINS

   29.   Currency of the Republic

   30.   Right to issue currency

   31.   Denominations of notes and coins

   32.   Minting and issue

   33.   Legal tender

   34.   Powers of recall

   35.   Exchange of notes and coins

   36.   Lost and mutilated notes and coins

   37.   Counterfeit of notes and coins

   38.   Penalty for mutilation of currency

PART V
INTERNATIONAL RESERVE AND FOREIGN EXCHANGE OPERATIONS

   39.   International reserves

   40.   Operations in gold and foreign exchange

   40A.   Monitoring of balance of payments

PART VI
RELATIONS WITH BANKS AND FINANCIAL INSTITUTIONS

   41.   Minimum liquidity ratios and reserve requirements

   42.   Accounts for banks and other financial institutions

   43.   Bank rates of interest for discounts, rediscounts and advances

   44.   Clearing facilities

   44A.   Interest rates and other charges by financial service providers

PART VII
RELATIONS WITH GOVERNMENT

   45.   Banker, fiscal agent and adviser to Government

   46.   Government funds

   47.   Management of Government loans

   48.   Agency functions

   49.   Advances to Government

   50.   Limitation on lending to Government

   51.   Depository and fiscal agency for international financial organisations

   52.   Transactions in Government securities

PART VIII
GENERAL

   53.   Prohibited business

   54.   Right to call for information

   55.   Inspection

   56.   Exemptions from taxes

   56A.   General penalty

   57.   Regulations

   58.   Property

   59.   Restriction on execution against property and assets of the Bank

   60.   Fees and recovery of expenses

   61.   Exemption from Banking and Financial Services Act

   62.   Savings

   63.   Repeal

AN ACT

to revise and consolidate the provisions of the Bank of Zambia Act; to revise the law relating to the composition, duties and powers of the Bank of Zambia and its Board; to revise and consolidate the law relating to the issuance of the currency of the Republic and the formulation and implementation of a monetary policy that will ensure the maintenance of price stability; and to provide for matters connected with or incidental to the foregoing.

[13th December, 1996]

Act 43 of 1996,

Act 4 of 1998,

Act 1 of 2013,

SI 191 of 1996.

PART I
PRELIMINARY

1.   Short title

This Act may be cited as the Bank of Zambia Act.

2.   Interpretation

In this Act, unless the context otherwise requires—

“bank” means the Bank of Zambia established under section 3;

“bank” shall have the meaning assigned to it in the Banking and Financial Services Act;

“banking business” shall have the meaning assigned to it in the Banking and Financial Services Act;

“Board” means the Board of Directors of the Bank established under section 12;

“Deputy Governor” means the Deputy Governor of the Bank appointed under section 11;

“financial institution” shall have the meaning assigned to it in the Banking and Financial Services Act;

“financial service” shall have the meaning assigned to it in the Banking and Financial Services Act;

“fine units” shall have the meaning assigned to it in the Fees and Fines Act;

“Governor” means the Governor of the Bank appointed under section 10;

“Ordinary revenue of the Government” means revenue from taxes, levies, royalties, fees, duties, rents, profits and income from any investment or any undertaking by the Government, its institutions and agencies, statutory bodies and local authorities, but does not include any funds raised by way of borrowing, grants in cash or in kind, or any other form of economic assistance.

PART II
THE BANK OF ZAMBIA

3.   Establishment of the Bank

   (1) The Bank of Zambia established under section 3 of the Bank of Zambia Act, 1985, is hereby continued as if established under this Act and shall be a body corporate with perpetual succession and a common seal, capable of suing and being sued in its corporate name, and with power, subject to the provisions of this Act, to do all such acts and things as a body corporate may by law do or perform.

   (2) The headquarters of the Bank shall be in Lusaka.

   (3) The Board may establish branches of the Bank within the Republic, and with the approval of the Minister, in any place outside the Republic.

   (4) The Board may appoint in Zambia or elsewhere agents and correspondents of the Bank, on such terms and conditions, as it may determine:

Provided that, no fees, remuneration, commission or allowances paid to any agent or correspondent shall be computed by reference to the profits of the Bank.

4.   Functions of the Bank

   (1) The Bank shall formulate and implement monetary and supervisory policies that will ensure the maintenance of the price and financial systems stability so as to promote balanced macro-economic development.

   (2) Without prejudice to the generality of sub-section (1) and subject to the other provisions of this Act the Bank shall—

      (a)   licence, supervise and regulate the activities of the banks and financial institutions so as to promote the safe, sound and efficient operations and development of the financial system;

      (b)   promote efficient payment mechanisms;

      (c)   issue notes and coins to be legal tender in the Republic and regulate all matters relating to the currency of the Republic;

      (d)   act as banker and fiscal agent to the Republic;

      (e)   support the efficient operation of the exchange system; and

      (f)   act as an adviser to the Government on matters relating to economic and monetary management.

5.   Powers of the Minister

The Minister may convey to the Governor such general or particular Government policies as may affect the conduct of the affairs of the Bank, and the Bank shall implement or give effect to such policies.

6.   Capital

   (1) The authorised capital of the Bank shall be ten million kwacha.

   (2) The Bank may increase the authorised capital by such amounts and in such a manner as the Board may determine, and may in similar manner with the consent of the Minister reduce the authorised capital:

Provided that no reduction shall be so effected as to reduce the amount of the authorised capital below ten million kwacha.

   (3) The Government shall be the sole subscriber to the paid-up capital of the Bank, and its holdings of the paid-up capital shall not be transferable in whole or in part or be subject to any encumbrance whatsoever.

   (4) The amount of any increase in paid-up capital effected in accordance with sub-section (2) shall be paid up in full by the Government.

   (5) Whenever the Board certifies that the assets of the Bank are less than the sum of its capital and other liabilities, the Minister notwithstanding the provisions of any other written law shall, on behalf of the Government, cause to be transferred to the ownership of the Bank negotiable and interest bearing securities issued by the Government for such amount as is necessary for the purposes of preserving the capital of the Bank from any impairment.

7.   Profit and loss

   (1) The net profit of the Bank for each financial year shall be determined by the Bank after—

      (a)   allowing for the expenses of operations for that year;

      (b)   making provision—

      (i)   for bad and doubtful debts, depreciation of assets and contingencies;

      (ii)   for pensions, gratuities and other benefits for its officers and employees; and

      (iii)   for such other items which are consistent with the Bank’s mandate.

   (2) Where the Bank makes a profit any amount leftover after making transfers in accordance with section 6 shall be paid to the Government within sixty days following the auditor’s certification of the Bank’s financial statements.

   (3) Where in any year, the Bank makes a loss on its profit and loss statement as certified by the auditors, the Minister, notwithstanding the provisions of any other written law, shall on behalf of the Government cause to be transferred to the ownership of the Bank cash or negotiable securities bearing market interest rates, and such securities shall be delivered to the bank within sixty days from the date of certification of the accounts by the auditors.

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