Banky Foiben'i Madagasikara (BFM)

Overview

Confidence: 93

Official Website: https://www.banky-foibe.mg/

Banky Foiben'i Madagasikara (BFM), or the Central Bank of Madagascar, is a public institution endowed with legal personality and enjoying financial and operational autonomy in the exercise of its mission. The BFM serves as the primary monetary authority responsible for currency issuance, monetary policy formulation and implementation, banking sector regulation and supervision, and management of foreign exchange reserves.

The BFM's primary objective is to ensure the internal and external stability of the Malagasy currency (Ariary) while contributing to financial stability and the soundness of the financial system of the Republic of Madagascar. The Central Bank supports the general economic policy of the Government while maintaining institutional independence in monetary policy decisions.

Basic Identity

Classification

Inclusion Justification

What This Entity Oversees

The BFM's Banking Supervision Department regulates and supervises all banking institutions:

Supervisory Framework:

• Licensing and authorization of commercial banks

• Microfinance institution regulation

• Savings and loan institution supervision

• Ongoing prudential regulation and supervision

• Capital adequacy requirements

Regulatory Standards:

• Minimum capital adequacy ratios (Basel III/IV)

• Liquidity management standards

• Risk management framework

• Governance and internal controls

• Loan loss provisioning requirements

Licensing Authority:

• Authorization of new banking institutions

• Assessment of ownership and management competence

• Capital adequacy verification

• Fit and proper testing of directors and senior management

• Ongoing compliance monitoring

Supervisory Approach:

• Risk-based supervision methodology

• Bank-specific risk assessment

• On-site examinations and inspections

• Off-site monitoring through regulatory reports

• Compliance assessments

• Regular supervisory meetings

Supervisory Powers:

• Regulatory directive authority

• Corrective action orders

• Administrative penalties and fines

• License suspension or revocation

• Appointment of receivers or conservators

• Emergency intervention authority

The BFM enforces comprehensive anti-money laundering and counter-terrorism financing requirements:

Customer Due Diligence:

• Know Your Customer (KYC) procedures

• Customer identification and verification

• Beneficial ownership identification

• Enhanced due diligence for high-risk customers

• Ongoing customer monitoring

Transaction Monitoring:

• Suspicious transaction identification and reporting

• Threshold-based reporting for large transactions

• Cross-border payment screening

• Real-time anomaly detection

• Structured transaction monitoring

Sanctions Compliance:

• UN Security Council sanctions implementation

• International sanctions list screening

• Counter-terrorism financing program enforcement

• Sanctions evasion prevention

• Designated persons list monitoring

Institutional Compliance:

• Compliance officer designation and authority

• Staff training and awareness programs

• Compliance audits and testing

• Record-keeping and documentation

• Financial Intelligence Unit cooperation

Regulatory Powers

The Banky Foiben'i Madagasikara exercises enforcement authority over banking institutions:

Administrative Actions:

• Issuance of supervisory directives

• Corrective action orders and monitoring

• Conditional licensing or authorization

• Monetary penalties and fines

• Activity restrictions and prohibitions

License Actions:

• License suspension for serious violations

• License revocation for insolvency or fraud

• Conditions imposed on banking licenses

• Termination of banking authorization

• Prohibition on business activities

Escalated Enforcement:

• Criminal referrals to law enforcement

• Liquidation of insolvent banking institutions

• Appointment of receivers or administrators

• Receivership proceedings

• Winding-up procedures

Transparency and Accountability:

• Publication of enforcement actions

• Supervisory examination summaries

• Regulatory announcements

• Annual reporting to government

• Transparency in enforcement decisions

Regulatory Role and Function

Legal Foundation

The Banky Foiben'i Madagasikara operates under the following legal framework:

• Central Bank of Madagascar Act - Primary legislation establishing the BFM, its mandate, governance structure, and powers

• Banking Regulation Act of Madagascar - Framework for regulation and supervision of banks and financial institutions

• Banky Foiben'i Madagasikara (Banking Supervision) Regulations - Prudential standards and supervisory procedures

• Banky Foiben'i Madagasikara (Anti-Money Laundering and Combating the Financing of Terrorism) Regulations - AML/CFT compliance requirements

• Exchange Control Regulations - Foreign exchange management and capital control framework

• Monetary Policy Directives - Annual policy statements and operational guidance

• Payment Systems Regulations - Oversight of payment and settlement infrastructure

The BFM Board of Directors provides governance, with the Governor serving as chief executive officer. The headquarters are located in Antananarivo.

Licensing and Authorization Relevance

The Banky Foiben'i Madagasikara (BFM) - Central Bank of Madagascar is a key licensing authority in Madagascar's financial system:

The licensing process typically involves assessment of capital adequacy, fitness and propriety of management, business plan viability, AML/CFT compliance frameworks, and IT systems readiness.

Payments and Money Movement Relevance

The Banky Foiben'i Madagasikara formulates and implements monetary policy to achieve currency and financial stability:

Core Objectives:

• Primary objective: Ensure internal and external stability of the Ariary currency

• Secondary objectives: Support financial system soundness and stability

• Contribute to the stability and soundness of the financial system

• Support general economic policy of the Government

• Maintain price stability consistent with economic growth

Monetary Policy Framework:

• Policy Rate: Base interest rate for monetary transmission

• Inflation Targeting: Medium-term inflation target around 5% per annum

• Currency Stability: Maintenance of Ariary value against international currencies

• Reserve Adequacy: Foreign exchange reserve management

Monetary Instruments:

• Bank Rate (Discount Rate): Official policy rate setting

• Open Market Operations (OMO): Government securities trading

• Reserve Requirement Adjustments: Commercial bank requirement changes

• Standing Facilities: Emergency liquidity provision

• Direct credit operations

Liquidity Management:

• Daily liquidity forecasting and management

• Repo and reverse repo operations with banks

• Emergency liquidity assistance facilities

• Seasonal liquidity adjustment

Reserve Management:

• Foreign exchange reserve accumulation and optimization

• Official foreign exchange reserves management

• National monetary reserves administration

• Currency stability support

Policy Communication:

• Monetary Policy Statements and announcements

• Press releases on policy decisions

• Transparency in decision-making

• Stakeholder communication

The BFM manages the national payment and settlement infrastructure:

Currency Management:

• Issuance of Malagasy Ariary (MGA) banknotes and coins

• Currency circulation management

• Counterfeiting prevention and detection

• Currency quality assurance and maintenance

Payment Infrastructure:

• Inter-bank payment clearing and settlement systems

• Real-time gross settlement (RTGS) for large-value payments

• Automated clearing house (ACH) for retail payments

• Check clearing coordination

• Payment system oversight and regulation

Digital Payments:

• Electronic payment system regulation

• Mobile money and digital wallet oversight

• Payment card system participation

• Electronic fund transfer facilitation

• Cross-border payment system integration

Central Bank Operations:

• Government banking services

• Treasury account management

• Government securities issuance and management

• Central bank reserve operations

• Financial market operations

The Banky Foiben'i Madagasikara manages foreign exchange to support currency stability:

Exchange Rate Management:

• Official Malagasy Ariary exchange rate determination

• Forex market supervision and oversight

• Exchange rate transparency and publication

• Currency stability maintenance

• Exchange rate stability initiatives

Foreign Exchange Allocation:

• Allocation of foreign exchange for essential sectors

• Licensing of authorized forex dealers

• Restrictions on non-essential foreign spending

• Priority sector foreign currency provision

Reserve Management:

• Foreign exchange reserve accumulation

• Optimal reserve composition and allocation

• Reserve adequacy for external obligations

• International reserve positioning

• Reserve diversification

Capital Controls:

• Regulation of cross-border foreign currency movements

• Approval authority for foreign investment

• Restrictions on capital outflows

• Enforcement of exchange control regulations

• Monitoring of foreign currency flows

Market Regulation:

• Licensing and supervision of forex dealers

• Money exchange operator oversight

• Inter-bank forex trading regulation

• Prevention of unauthorized forex trading

• Enforcement of exchange control rules

Payment Systems Governed or Overseen

The BFM operates and/or oversees the national payment and settlement infrastructure of Madagascar. Specific systems include:

[Further detail on specific system names requires verification from official sources]

Relationship to Other Regulators

The BFM participates in regional and international monetary frameworks:

Regional Integration:

• Southern African Development Community (SADC) coordination

• Indian Ocean Commission (IOC) participation

• Regional central banking cooperation

• Monetary stability coordination

International Memberships:

• International Monetary Fund (IMF) member

• World Bank affiliate

• African Development Bank member

• International Organization for Standardization (ISO) compliance

Capacity Building:

• IMF technical assistance programs

• World Bank financial sector assessments

• Bilateral relationships with other central banks

• Training and professional development

• International exchange programs

International Standards:

• Basel Committee banking standards implementation

• FATF AML/CFT recommendations compliance

• Financial Action Task Force engagement

• International best practices adoption

Geography and Jurisdiction Notes

Important Departments and Divisions

Key Public Resources

Banky Foiben'i Madagasikara (Central Bank of Madagascar)

Antananarivo, Madagascar

Website: https://www.banky-foibe.mg/

General Inquiries: +261 (20) 222 3333

Banking Supervision Division: [email protected]

AML/CFT Department: [email protected]

Foreign Exchange Division: [email protected]

Monetary Policy Department: [email protected]

Governor (as of 2024): Monetary authority leadership

Notes on Naming and Language