BANK OF ZAMBIA ACT
Arrangement of Sections
1. Short title
THE BANK OF ZAMBIA
3. Establishment of the Bank
4. Functions of the Bank
5. Powers of the Minister
7. Profit and loss
8. General reserve fund and other funds
9. Policy statement
11. Deputy Governors
12. Board of Directors
13. Composition of Board
14. Tenure of office
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
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
INTERNATIONAL RESERVE AND FOREIGN EXCHANGE OPERATIONS
39. International reserves
40. Operations in gold and foreign exchange
40A. Monitoring of balance of payments
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
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
53. Prohibited business
54. Right to call for information
56. Exemptions from taxes
56A. General penalty
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
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.
This Act may be cited as the Bank of Zambia Act.
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.
THE BANK OF ZAMBIA
(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.
(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.
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.
(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.
(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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