PAYMENTS SYSTEM AND BANKING OPERATIONS DEPARTMENT

COUNTRY SPECIFIC PAYMENT SYSTEM PROJECT REPORT FROM APRIL 2009 TO MARCH 2010.

ANGOLA

1. INTRODUCTION

The Angola Payment System (SPA) comprises three subsystems, namely the Angolan Real Time Gross Settlement System (SPTR), Clearing House System (SCV) and the MULTICAIXA System.

To achieve the objectives outlined in the past year, the Payment System and Bank operations Department (DSP) sought to streamline management of all work processes to meet these same objectives, and secured, during the year, that the methods and procedures adopted in the activities are compatible with the specificity of each task and in line with the general approach agreed by the Board of the Angola Central Bank (BNA).

For the year 2010, are still to implement the following actions that will conform to SPA Core Principles for systemically important Payment System:

1.Streamline and monitor the actions of EMIS for the implementation of actions aimed at creating the Angola Automated Clearing House (CCAA\AACH);

2.To approve the Internal Procedures Manual for the Oversight Sector;

3Approve the Memorandum of Cooperation between DSP and DSI, with a view to defining the Oversight activity to SPA;

4.Approve the Memorandum of Understanding between BNA and Angola Security and Exchange Comission (CMC);

5.Resume actions to implement the Draft for Public Employees Payment of Salaries through the banking network;

6.Pursue actions to implement the new routine procedure for Tax payments;

7.Streamline and monitor actions relating to the implementation of EMIS Issue of cards Platform and the introduction of the MasterCard Network, as well as efforts to improve the availability and safety of the ATM network.

8.Establish the legal framework for introduction in Angola of MOBILE BANKING & PAYMENTS System, to support the retail payments and other automated services, using the resources of mobile telephony and BANK AGENTS, both framed in efforts to increase the level of banking and financial services that are available to persons who are outside the banking system.

2. OPERATIONAL ISSUES

On the operational side DSP brings together the activities primarily related to the reform strategy and payment systems modernization in Angola, implementation and Clearing House Services in the SCV, SPTR administration as well as financial settlement of all interbank payments in domestic currency .

Payments traded in SPTR include interbank payments from bank to bank, in its own name and by order of customers, payments to/from BNA and Treasury as well as transfers from the internal interfaces of the subsystems of the BNA, including SIGMA, Notes and currency (deposits and withdrawals by banks at BNA), and OPICS (payments for the purchase and sale of foreign currency between BNA and commercial banks or between BNA and MINFIN\Treasury).

2.1 Systematic Course About Payments System

This training was funded by the World Bank under the Technical Assistance macroeconomic management Project, it had the purpose of providing BNA employees with a series of tools to increase their capacity for criticism, review and evaluation of issues related to payment system, in order to increase the level and quality of services to be provided.

This training had its start on January 14, 2008, with the participation of 24 BNA employees from the DSP, DGR, DMA and the DSI, and was completed in May 2009.

2.2 Statistics

Volume In 2009, the Angolan Real Time Gross settlement system, SPTR, had an overall positive change of 36% in transaction quantities traded, compared with the year 2008.This represented a settlement of a total of 26,628,458 payments in 2008 against 19.629.910 in 2009.

The increase in the volume of transactions traded in the period under review was due to SPTR Subsystem which registered a volume of 134 781 transactions against 79,877 transactions in 2008 ie 69% increase, also the Multicaixa subsystem, in particular, credit cards with a volume of operations rising from 169,166 in 2008 to 291,674 in 2009, i.e. 72% increase, while debit cards grew by only 36%.In the SCV Subsystem , drawing orders registered a negative growth of 25% while cheques and credit documents grew 7% and 23% respectively.

The following is the annual change in volume of payment instruments in the SCV, EMIS and SPTR in the country:

VOLUME OF TRANSACTIONS (units)

SCV MULTICAIXA SPTR DRAWING CREDIT CREDIT MESSAGES 102 / QUARTER CHEQUES ORDERS Docum. DEBIT CARDS CARDS 103 / 202 TOTAL 2008 I º 83 625 9418 3938 3691468 34 974 15 305 3838728 II 93 110 9752 4988 4587079 39 750 18 729 4753408 III 97 308 7835 4828 4941352 41 560 21 447 5114330 IVth 98 069 8095 5380 5734622 52 882 24 396 5923444 TOTAL ANNUAL 372 112 35 100 19 134 18,954,521 169 166 79 877 19,629,910 2009 I º 83 801 5838 4417 5295041 58 653 19 713 5467463 II 98 792 7415 6358 5919999 70 227 24 488 6127279 III 104 320 6853 6633 6375991 75 394 28 787 6597978 IVth 112 112 6326 6193 8161914 87 400 31 871 8405816 TOTAL ANNUAL 399 025 26 432 23 601 25,752,945 291 674 134 781 26,628,458 VAR% 7 -25% 23% 36% 72% 69% 36%

Sum In 2009, SPTR Subsystem, had an overall positive change in amount transacted of 119% when compared with the year 2008. The value traded increased from Kz. 15,091,481,796,955 in 2008 to AKZ. 31,597,673,550,810 in 2009.

The Multicaixa Subsystem, registered a significant increment in credit cards transactions by increasing from Kz. 2,735 million in 2008 to Kz. 4.946 million in 2009, i.e. a percentage change of 81% while in debit cards the change was 46%. The SCV Subsystem only grew by 16% in Cheques, while drawing orders and credit documents showed a reduction of around 42% and 4% respectively.

The following is the annual change in the amount of the payment instrument in the SCV, EMIS and SPTR in the country

STATISTIC OF TRANSACTIONS IN SPTR DURING THE YEAR 2009 AMOUNT OF TRANSACTIONS

QUARTER SCV MULTICAIXA SPTR DRAWING CREDIT CREDIT MESSAGES 102 CHEQUES ORDERS Docum. DEBIT CARDS CARDS / 103 / 202 TOTAL 2008 I º 154 326 383 475 71,930,464,209 5147803022 24,909,950,304 513 605 707 1,462,806,676,907 1,719,634,883,624 II 201 875 019 878 88,386,037,700 6311650860 30,716,589,649 652 927 809 4,361,074,387,576 4,689,016,613,472 III 218 980 432 719 78,567,422,732 11,338,238,224 36,030,046,396 708 322 964 4,460,901,660,561 4,806,526,123,596 IVth 238 822 261 316 63,714,530,549 4966114338 48,780,101,242 860 689 425 3,519,160,479,393 3,876,304,176,263 TOTAL ANNUAL 814 004 097 388 302 598 455 190 27,763,806,444 140 436 687 591 2735545905 13,803,943,204,437 15,091,481,796,955 2009 I º 201 355 821 046 39,245,461,604 4773120011 39,517,248,194 976 389 850 4,771,256,315,090 5,057,124,355,795 II 203 302 905 892 45,217,274,008 4739467336 45,444,543,710 1171760300 7,806,186,556,574 8,106,062,507,820 III 254 060 761 268 47,354,665,771 8837582598 48,718,551,095 1217897154 6,128,304,099,233 6,488,493,557,119 IVth 285 736 927 298 42,953,351,069 8372424339 71,591,128,253 1580522273 11,535,758,776,844 11,945,993,130,076 TOTAL ANNUAL 944 456 415 504 174 770 752 452 26,722,594,284 205 271 471 252 4946569577 30,241,505,747,741 31,597,673,550,810 VAR% 16% -42% -4% 46% 81% 119% 109)

3. SETTLEMENT SYSTEM AND DEVELOPMENT PROJECTS

3.1 New Routine for Tax Payments

The planned introduction of new procedures for tax collection had its beginning in 2004. The process resumed in October 2008 with a number of consultation meetings between the officials and experts from BNA, MINFIN (DNI, DNA, GAI) and EMIS, with the aim of summarizing technical solutions and operational mechanisms that allow using SPTR for tax payments by companies for these are adequate infrastructures for gross amounts. Therefore, it is a modern, flexible and secure payment channel to contain the typical payment systems risks, some associated with cheques.

3.2 Projects for Settlement of Capital Market Transactions

The draft Memorandum of Understanding between BNA and the Capital Market Commission (CMC) is already prepared and it has been sent to CMC for their analysis.

4. RETAIL SYSTEM PROJECTS AND DEVELOPMENTS

4.1 Clearing House System(SCV)

Conducted an audit of the operating systems of Retail Payment systems (SCV and MULTICAIXA), by a company hired by BNA, through an international tender organized for the purpose.

4.2 Angola Automated Clearing House (CCAA\AACH)

Angola Automated Clearing House(CCAA\AACH) will be a modern and safe payment infrastructure in low-value payments (retail payments) made by the following payment instruments and it will be operated, managed and owned by the Interbank Services Company (EMIS):

· Electronic Remittance interbank credit • Electronic clearing of cheques • Electronic Interbank Debit Instruction

4.3 Multicaixa Internationalization Process and Implementation of VISA in Angola

This project landed the following advantages to Angola payment System:

• The planned introduction of new procedures for the collection of taxes from individuals through the MULTICAIXA system

· Completion of the ATM network certification according to international safety standards and PCI (Payment Card Industry Data Security Standard) processing

· Registration, Certification and Implementation of Bank members in Acquiring VISA ATM and POS. This process has allowed nine banks to join VISA , with five main members, 3 Associate members and one per representation.

· Issue Project.Completion of this project will allow EMIS to be the issuer of international Payment Systems cards as well as the migration of the MULTICAIXA card to EMV standard

· Completion of the Autorization Center project from the standpoint of EMIS systems, and conducting the training for EMIS allocated resources to serving Voice Autorization and processing of "vouchers" for manually accepting VISA ;

· Beginning actions relating to Mastercard Certification Project.However, this project has been stalled waiting for BNI to establish communication channels between MasterCard´s SPI and Angola processor to the necessary technical adjustment.

4.4 Other Developments and Projects

Resumed discussions with the various departments of MINFIN, to establish new routines for collecting taxes from individuals through the ATM network.

Establishment by BNA and CMC of operating routines for the financial settlement of transactions in the Stock Exchange in SPTR.

Conducting workshop on "Mobile Banking and Payments, which hailed the 33rd anniversary of the BNA.

5. E-MONEY AND MOBILE BANKING INITIATIVES

Angola's financial sector uses new technologies to provide fast and reliable banking products and services .For the Central Bank, it is an integral item to encourage the adoption of the initiatives related to electronic money and banking via cell phone.Notwithstanding being a new initiative in financial markets, the banking sector currently has available for its customers the following products and services:

· Homebanking service - which allows access to the Bank in a simple and safe manner, using a computer with Internet connection, 24 hours a day, 365 days a year.

· SMS Banking Service - access to the Bank by exchanging (send and receive) text messages (SMS) from your mobile phone and there is one message for each operation with pre-defined rules (syntax).

6. OVERSIGHT ISSUES

The function of control and monitoring (oversight) of payment systems by central banks is to ensure the smooth operation of payment systems, promoting safe and efficient systems, minimizing the risks to which they are subject and addressing market failures.

To demarcate the boundaries of this activity and make transparent its principles and procedures in this activity, it was prepared in February 2009 a draft of the manual on Angola oversight policy for Payment System.

This manual presents BNA oversight policy, its objectives, scope, standards, methodology and instruments, reflecting its disclosure, compliance with the principle of transparency that should shape BNA´s intervention in the Angola Payments System (SPA). Its objectives have an eminently informative character, particularly for the participants and operators of payment systems.

Also held the preparation and publication of the Notice and on the Instructive notice about the oversight activity of the Angola Payments Systems (SPA) as well as the elaboration of the draft of Instructions on the Handbook of Rules and Procedures Governing the oversight Activity Monitoring SPA.