CHAPTER 360 - BANK OF ZAMBIA ACT: SUBSIDIARY LEGISLATION

INDEX TO SUBSIDIARY LEGISLATION

Determination of Standard Weight, Composition and Remedy of Coins

Standard Weight, Composition and Remedy of Coins

Bank of Zambia (Minimum Liquidity Ratios and Reserve Requirements) (No. 2) Notice

Bank of Zambia (Credit Guarantee Scheme) Regulations

Bank of Zambia (Call in and Surrender of Currency) Regulations

Bank of Zambia Act (Commencement) Order

DETERMINATION OF STANDARD WEIGHT, COMPOSITION AND REMEDY OF COINS

[Section 9(2)]

SI 133 of 1982.

[Determination by the Minister on the recommendation of the Bank of Zambia]

It is hereby determined* that the standard weight and composition and the amount of remedy of coins issued by the Bank shall be as specified in the Schedule hereto.

SCHEDULE

STANDARD WEIGHT, COMPOSITION AND REMEDY OF COINS

[Section 29 (2)]

SI 115 of 1968.

[Determination by the Minister on the recommendation of the Bank of Zambia]

It is hereby determined* that the standard weight and composition and the amount of remedy of coins issued by the Bank shall be as specified in the Schedule.

SCHEDULE

BANK OF ZAMBIA (MINIMUM LIQUIDITY RATIOS AND RESERVE REQUIREMENTS) (No. 2) NOTICE

[Section 29]

Arrangement of Paragraphs

   Paragraph

   1.   Title

   2.   Reserve requirements

   3.   Liquidity ratio

[Notice by the Bank]

SI 77 of 1978.

1.   Title

This Notice may be cited as the Bank of Zambia (Minimum Liquidity Ratios and Reserve Requirements) (No 2) Notice*.

2.   Reserve requirements

Every commercial bank shall maintain with the Bank of Zambia—

      (a)   a minimum reserve balance to the extent of—

      (i)   fifteen per centum of its demand deposit liabilities; and

      (ii)   eight per centum of its time deposit liabilities; and

      (b)   special reserves equal to one hundred per centum of its liabilities to customers relating to arrears of external payment, and such reserves shall not qualify as liquid assets for purposes of the Act.

3.   Liquidity ratio

Every commercial bank shall hold the minimum amount of liquid assets to the extent of thirty per centum of its liabilities to the public, excluding liabilities relating to arrears of external payment.

BANK OF ZAMBIA (CREDIT GUARANTEE SCHEME) REGULATIONS

[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

   1.   Title

   2.   Interpretation

PART II
THE SCHEME

   3.   Qualifying enterprises

   4.   Exemptions

   5.   Qualification of period of repayment of advance

   6.   Enhancement of guarantee

   7.   Extension of guarantee

   8.   Advance less than guaranteed amount

   9.   Guarantee fee

   10.   Eligibility

   11.   Disqualification

   12.   Extent of guarantee

PART III
APPLICATION AND CLAIMING PROCEDURE

   13.   Application procedure

   14.   Supporting confirmations

   15.   Approval of Bank

   16.   Recall to advance

   17.   Invocation of guarantee

   18.   Discharge of guarantee

PART IV
ACCOUNTS AND RETURNS

   19.   Accounts of scheme

   20.   Returns by approved institution

PART V
MISCELLANEOUS

   21.   Inspection

   22.   Instructions to approved institutions

   23.   Right to reject application

      FIRST SCHEDULE

      SECOND SCHEDULE

[Regulations by the President]

SI 52 of 1987,

SI 86 of 1989.

PART I
PRELIMINARY

1.   Title

These Regulations may be cited as the Bank of Zambia (Credit Guarantee Scheme) Regulations.*

2.   Interpretation

In these Regulations, unless the context otherwise requires—

“advance” means a loan repayable on demand during or on expiry of a fixed or determinable period and includes an overdraft or a purchase or discount of bills and any other credit facility;

“amount in default” means an amount in respect of a guaranteed advance remaining unpaid on the date on which a guarantee is invoked including overdue interest and other charges recoverable in accordance with normal banking practice;

“approved institution” means an institution listed in the First Schedule;

“enterprise” means an undertaking engaged in manufacture, agriculture or in the provision of services;

“guarantee” means a guarantee issued pursuant to these Regulations;

“guaranteed amount” or “guaranteed advance” means the amount of advance covered by guarantee;

“manufacture” means the process of commercial transformation of raw materials or semi-processed materials into finished or semi-finished products and includes the assembly of inputs into finished or semi-finished products, repairing and packing, but does not include mining or recovery of minerals;

“scheme” means the credit guarantee scheme provided for under these Regulations;

“service” means any service for the supply of provision of goods, commodities, facilities or amenities for reward or otherwise, which is performed by physical or mechanical means;

“SIDO” means the Small Industries Development Organisation established under the Small Industries Development Act, 1981;

“small scale enterprise” means an enterprise having capital assets not exceeding one and half million kwacha or such higher amount as may be prescribed from time to time;

“VIS” means the Village Industry Service, a service registered under the Societies Act;

[Am by SI 86 of 1989.]

PART II
THE SCHEME

3.   Qualifying enterprises

The Bank may provide a guarantee to an enterprise if the enterprise—

      (i)   is a “small scale enterprise”;

      (ii)   is engaged in manufacturing or in the provision of a service; and

      (iii)   is engaged in a sector approved by the Bank.

[Am by SI 86 of 1989.]

4.   Exemptions

Notwithstanding regulation 3, the Minister may direct that the Bank guarantee an advance by an approved institution to a small enterprise.

5.   Qualification of period of repayment of advance

No guarantee will be issued unless the Bank is satisfied that—

      (i)   in case of an advance in the form of a loan repayable over a fixed period, such period of repayment does not exceed ten years; and

      (ii)   in case of any other form of advance, the repayment period does not exceed two years.

6.   Enhancement of guarantee

   (1) Where an approved institution intends to increase an advance which is guaranteed by the Bank, application for such proposed increase should be made to the Bank in Form CGS 1 of the Second Schedule.

   (2) If the Bank approves the increase referred to in sub-regulation (1), the approval shall be communicated to the approved institution in Form CGS 2 of the Second Schedule.

7.   Extension of guarantee

   (1) Unless prior notice is given to the Bank for the approval of the extension of the guarantee, the Bank’s liability shall not apply to such an extended period of repayment.

   (2) Application for the extension of a guarantee by an approved institution shall be made in Form 3 of the Second Schedule at least 30 days before the due date of expiry of the guarantee.

   (3) The Bank’s approval referred to in sub-regulation (1) shall be communicated to the approved institution in Form CGS 2 of the Second Schedule.

8.   Advance less than guaranteed amount

If the total advance eventually utilised by the small enterprise is lower than the guaranteed amount, the approved institution may communicate that fact in writing to the Bank for a refund, on a pro rata basis, of the guarantee fee specified under regulation 9.

9.   Guarantee fee

   (1) An approved institution shall pay to the Bank at the time of lodging an application for a guarantee under this scheme, a fee equal to one per centum of the amount of the advance intended to be guaranteed.

   (2) Every subsequent year during which a guarantee is in force, a fee at the rate of one per centum of the guaranteed amount shall be paid to the Bank by the approved institution on the anniversary date of the approval of the guarantee.

   (3) If the approved institution does not pay to the Bank the fee as provided for in sub-regulations (1) and (2), the guarantee issued by the Bank shall be void ab initio.

10.   Eligibility

Any advance by an approved institution to a small scale enterprise whether that advance is for purposes of financing acquisition of fixed assets or capital equipment, or for providing working capital, may be covered under the scheme.

11.   Disqualification

The following advances shall not be eligible for cover under the scheme—

      (i)   an advance that has been, or is intended to be, guaranteed by the Government;

      (ii)   an advance that has already been guaranteed by some other person;

      (iii)   an advance to an existing defaulter appearing in the books of an approved institution; and

      (iv)   an advance intended for onward lending.

12.   Extent of guarantee

   (1) An approved institution shall be entitled to recover from the Bank seventy per centum of the amount on which default has occurred or the amount guaranteed, whichever is the lesser.

   (2) Where a small scale enterprise has borrowed from various approved institutions severally, the amount recovered by the approved institution from the Bank under sub-regulation (1) shall be distributed to the approved institutions on a pro rata basis.

   (3) Where an advance was approved to a small enterprise by approved institutions acting jointly, the amount recovered from the Bank under sub-regulation (1) shall be paid to the approved institution involved in arranging the advice.

[Am by SI 86 of 1989.]

PART III
APPLICATION AND CLAIMING PROCEDURE

13.   Application procedure

Application for guarantee under the scheme shall be made by completing Form CGS 4 of the Second Schedule in triplicate and submitting that application to the Bank through an approved institution’s head office.

14.   Supporting confirmations

The approved institution shall attach to Form CGS 3 of the Second Schedule confirmation—

      (a)   that it is satisfied with the viability of the proposed project from a technical point of view and that a reasonable return may be realised from the investment.

[Am by SI 86 of 1989.]