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Banking Regulation in Angola: A Focus on Transparency and Risk Management

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The Angolan banking sector has been undergoing significant reforms to ensure greater transparency and risk management. The country’s central bank, Banco Nacional de Angola (BNA), has implemented new regulations to enhance the supervision of banks and promote a more stable financial system.

Non-Financial Indicators of Banking Activity

To facilitate effective decision-making, BNA requires banking entities to provide non-financial indicators of their activity, exposure, and risk-assessment results. This includes information on:

Products and services offered
Business departments and operating costs

Internal Control Functions

The monitoring of internal control functions is crucial in ensuring the integrity of banking operations. The hierarchy and status of each person responsible for various internal control functions must be clearly defined, with a focus on global strategy and general supervision at the administrative body or board of directors level. Additionally:

A third-party auditor must be appointed to verify compliance with regulations.

Bank Capital Requirements

BNA has implemented new capital requirements for banks, aligning them with international standards such as Basel II. The solvability ratio is set at:

8.5% or 7.0%, depending on the type of elements incorporating the own funds for each specific case.
Banks must also analyze:
- Credit risk
- Counterparty risk
- Market risk
- Operational risk

Rules Governing Bank-Customer Relationships

Law 12/2015 regulates banks’ relationships with customers and other third parties. Banking institutions are required to:

Ensure technical capacity
Act with due diligence
Provide proper information and assistance
Handle customer complaints
Set internal conduct policies
Preserve confidentiality
Cooperate with other authorities
Report credit risks
Comply with conflict-of-interest and antitrust rules

Conclusion

The Angolan banking sector is undergoing significant reforms to promote transparency and risk management. The implementation of new regulations and guidelines aims to enhance the supervision of banks, protect customers’ interests, and foster a more stable financial system.

As the country continues to develop its financial infrastructure, it is essential that regulatory bodies maintain a strong focus on promoting good governance practices and protecting investors.

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