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 Regulations

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 (Classification and Provisioning of Loans) 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 (DESIGNATION OF URBAN AND RURAL AREAS) ORDER

Arrangement of Paragraphs

   Paragraph

   1.   Title

   2.   Designation of rural and urban areas

      FIRST SCHEDULE

      SECOND SCHEDULE

SI 92 of 1989.

1.   Title

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.

FIRST SCHEDULE

[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

SECOND SCHEDULE

[Paragraph 2(2)]

RURAL AREAS

Those areas not specified in the First Schedule.

BANKING REGULATIONS

Arrangement of Regulations

   Regulation

   1.   Title

   2.   Interpretation

   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

      SCHEDULE

[Regulations by the Minister]

SI 226 of 1973.

1.   Title

These Regulations may be cited as the Banking Regulations*.

2.   Interpretation

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.

SCHEDULE

[Regulation 2]

PRESCRIBED FORMS

Form ZBK No. 1 (Revised)

Application for registration as a commercial bank or financial institution

Form ZBK No. 2 (Revised)

Monthly Statement of—

   (a)   Liabilities to the Public; and
(b)   Liquid Assets;

of a Commercial Bank in Zambia.

Form ZBK No. 3 (Revised)

Monthly statement of assets and liabilities and supplementary statement of a commercial bank in Zambia.

Form ZBK No. 4 (Revised)

Monthly statements of—

   (a)   Liabilities to the Public;

   (b)   Capital; and

   (c)   Liquid Assets;

of a Financial Institution in Zambia

Form ZBK No. 5 (Revised)

Quarterly statement of assets and liabilities and supplementary statement of a financial institution in Zambia.

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 ......................................................................................................................................................................................................

5. In case of a Commercial Bank—

      (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 ...........................................................................................................................

Date to which this return refers ......................................................................................, 20…....

ASSETS

Supplementary statement in terms of section 28(1)(c) of the Act

Statement in terms of section 28(1)(b) of the Act. (For publication where applicable in the Government Gazette)

1. Notes and coins

K

K

(a) Zambian notes

……………………

(b) Zambian coins

……………………

(c) Other notes and coins

……………………

2. Balances held with the bank of Zambia

(a) Statutory reserves

……………………

(b) Other balances

……………………

3. Balances held with registered commercial banks in Zambia

(a) Assets in transit

……………………

(b) Other items

……………………

4. Balances held with banks abroad

(a) head office and/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

……………………

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

(a) discounted and purchased

……………………

(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

TOTAL ASSETS

LIABILITIES

K

K

1. Demand 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

………………….

2. Savings 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

………………….

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............................................................................................................

Date to which this return refers ..................................................................................., 20 …..........

ASSETS

Supplementary statement in terms of section 29(1)(c) of the Act

Statement in terms of section 29(1)(b) of the Act. (For publication where applicable in the Government Gazette)

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

Supplementary statement in terms of section 29 (1)(c) of the Act

Statement in terms of section 29 (1)(b) of the Act. (For publication where applicable in the Government Gazette)

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

BANKING 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

   1.   Title

   2.   Interpretation

   3.   Application

   4.   Determination of annual rate of interest

   5.   Cost of borrowing for loans repayable in equal instalments

   6.   Disclosure requirements

   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

   11.   Disclosure of estimates

      SCHEDULE

[Regulations by the Minister]

SI 179 of 1995.

1.   Title

These regulations may be cited as the Banking and Financial Services (Cost of Borrowing) Regulations.

2.   Interpretation

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.

3.   Application

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.

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, andr = 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.

6.   Disclosure requirements

   (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.

11.   Disclosure of estimates

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.

SCHEDULE

[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

   1.   Title

   2.   Fees

   3.   Method of payment of fees

   4.   Fees non-refundable

   5.   Annual licence fee

   6.   Penalty for failure to pay a fee

   7.   Fees and penalties to accrue to bank of Zambia

      SCHEDULE

[Regulations by the Minister]

SI 180 of 1995.

1.   Title

These regulations may be cited as the Banking and Financial Services (Payment of Fees) Regulations.

2.   Fees

The fees set out in the schedule, shall be paid in respect of the services set out in that schedule.

3.   Method of payment of fees

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.

4.   Fees non-refundable

The fees paid under these regulations shall not be refundable.

5.   Annual licence fee

   (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.

SCHEDULE

[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

   1.   Title

   2.   Annual returns of unclaimed funds

   3.   Computation of the period

   4.   Content of return

   5.   Amounts under ten thousand kwacha

      FIRST SCHEDULE

      SECOND SCHEDULE

[Regulations by the Minister]

SI 181 of 1995.

1.   Title

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.

3.   Computation of the period

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.

4.   Content of return

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.

FIRST SCHEDULE

[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.....

SECOND SCHEDULE

[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

   1.   Title

   2.   Interpretation

   3.   Transfers to a reserve fund

[Regulations by the Minister]

SI 182 of 1995.

1.   Title

These regulations may be cited as the Banking and Financial Services (Reserve Account) Regulations.

2.   Interpretation

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

   1.   Title

   2.   Disclosure of charges

   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.

1.   Title

These regulations may be cited as the Banking and Financial Services (Disclosure of Deposit Charges and Interest) Regulations.

2.   Disclosure of charges

   (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

   1.   Title

   2.   Interpretation

   3.   Minimum capital of a bank

   4.   Minimum capital of a financial institution

   5.   Application of regulation 4 to subsidiary

   6.   Minimum capital ratio

   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

   21.   Risk weighted assets

   22.   Guarantees made by bank

   23.   Implements of capital adequacy standards

   24.   Calculation of risk weighted assets

   25.   Capital deficiency

   26.   Suspension of banks or financial institutions, branch networks, etc.

   27.   Suspension of director

   28.   Maintenance of records

   29.   Consolidated reports

   30.   Submission of reports

      FIRST SCHEDULE

      SECOND SCHEDULE

[Regulations by the Minister]

SI 184 of 1995.

1.   Title

These regulations may be cited as the Banking and Financial Services (Capital Adequacy) Regulations.

2.   Interpretation

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.

3.   Minimum capital of a bank

   (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.

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