Angolan banking sector has difficulties with its foreign relationships

11 November 2016

The Angolan banking system for the last two years has seen a reduction of its direct Correspondent Banking Relations (CBR), which reduces its ability to handle payments for imports and remittances, the governor of the National Bank of Angola (BNA) said in Luanda.

Valter Filipe, who was speaking at the opening of a round table meeting on “Correspondent Banking Relations,” attributed this to the increased demands of correspondent banks for compliance with the standards adopted by international regulators on supervision, risks of money laundering and terrorist financing and the costs incurred in customer due diligence procedures.

“The closure of bank correspondence, along with the reduction in oil prices, affect the ability of banks to make payments to import food, medicines, raw materials, remittances to students and medical assistance abroad, family support, diplomatic sector payments, as well as clients with international contracts concluded in dollars,” added the governor cited by state newspaper Jornal de Angola.

The governor used the occasion to publicise the ongoing initiatives to make the financial system more robust and reduce the impact of the closure of CBR, resume the old relationships and establish new correspondent relationships, a process involving domestic and foreign entities such as the Ministry of Finance, the Financial Intelligence Unit, commercial banks, the International Monetary Fund and the World Bank.

The head of mission of the International Monetary Fund who is in Angola to hold consultations under Article IV – to evaluate economic performance – said at the conclusion that the absence of correspondent banking relationships is a major challenge that must be faced, and it was necessary to improve the supervisory and regulatory system, particularly in the area of money laundering. (macauhub)