MINISTRY OF FINANCE OF THE REPUBLIC OF MOLDOVA State Treasury Relationships of the Ministry of Finance with the Central Bank and commercial banks   Chisinau, October 2017

I II III IV Outline of the presentation Agreement between the Ministry of Finance of the Republic of Moldova (MoF) and the National Bank of Moldova (NBM) NBM Regulations on Taking Deposits from the MoF Memorandum of Understanding on Cooperation between the MoF and the NBM Relationships with payment service providers

I. Agreement between the MoF and the NBM 01 02 03 04 05 06 Opening and maintaining the MoF Treasury Single Account and foreign currency accounts in the NBM accounting system Processing of payment documents in the Automated Interbank Payments System (AIPS) and provision of services offered by the AIPS Making foreign currency transfers in accordance with electronic payment documents Operations on converting Moldovan Leu into foreign currencies and vice versa Taking deposits in Moldovan Leu Operating on behalf of the MoF as a Government agent in the primary market for placement and registration of government securities (GS) Subject of agreement

I. Agreement between the MoF and the NBM т Fee rates and payments for services provided For services provided through the AIPS, the NBM charges MoF fees in accordance with the established rates, payable on the first working day of a month following the reporting month: A fee for processing payment documents and packages in the Real-time Gross Settlement (RTGS) system and accordingly in the clearing system; A fee for processing requests in the RTGS system and in the clearing system. For services related to converting Moldovan Leu into foreign currencies, the NBM charges MoF the fee at the established rate as from the commencement of such operations. For foreign currency transfers, the NBM charges MoF fees for each separate operation and additionally a fee charged by a correspondent bank performing the registration of operations in NBM accounts and/or a fee charged by an intermediary bank. For services related to servicing Government securities, the NBM charges a fee of 0.03 percent of the nominal value of Government securities issued in the primary market through auctions.

I. Agreement between the MoF and the NBM The NBM pays interest on balances in the MoF Treasury Single Account based on the estimated average interest rate for legal entities’ deposits for the banking system. On fixed-term deposits placed by the MoF, the NBM pays interest in accordance with the term of the deposit, applying an interest rate established for the market pursuant to the National Bank’s regulations. Law on Public Finances and Fiscal Responsibility # 181 dated July 25, 2014, Article 62 (4) Balances of temporarily free monies in accounts of component budgets of the national public budget, managed through the Treasury Single Account, can be lodged in deposit accounts with the NBM or invested in Government securities.

II NBM Regulations on Taking Deposits from the MoF Regulations, procedures and conditions for taking and repaying fixed-term deposits in the national currency Deposits are placed on the basis of standard agreements and deposit applications to be sent by the MoF to the NBM. The parties shall conclude two standard deposit agreements: On placement of deposits for purposes of efficient public finance management – for funds that are available in the Treasury Single Account. On placement of deposits for purposes of creating a liquidity buffer to reduce the risk of rolling over public debts or to facilitate the implementation of monetary policy – for funds earned by the MoF from issuing Government securities for such purposes. The NBM will take from the MoF fixed-term deposits for terms from 1 month to 24 months. The NBM shall pay interest depending on the term of the deposit, applying the average unit rate established for Government securities of respective maturity placed at the most recent auction.

III Memorandum of Understanding on Cooperation between the MoF and the NBM Main areas of common interest: Liquidity forecasts for the banking system and for the Treasury Single Account (TSA) 01 02 03 04 Issuance calendar (timetable) for Government securities (GS) Terms and conditions of placing Government deposits with the NBM Balance of Government securities in the NBM portfolio

III Memorandum of Understanding on Cooperation between the MoF and the NBM Working Groups First level: From the MoF: Minister of Finance State Treasury Public Debt Department From the NBM: NBM Governor First Deputy NBM Governor Banking Operations Division WG Secretary  Second level: From the MoF: State Treasury Public Debt Department From the NBM: Banking Operations Division WG Secretary

III Memorandum of Understanding on Cooperation between the MoF and the NBM Meetings Meetings of the first-level Working Group are held every quarter as suggested by the Minister of Finance or NBM Governor. Meetings of the second-level Working Group are held every month as suggested by either of the parties.

IV Relationships with payment service providers Law on Payment Services and Electronic Money # 114 dated May 18, 2012, Article 5 (1) Providers of payment services are legal entities authorized to provide such services (hereinafter, payment service providers). These include: Banks operating in accordance with the Law on Financial Institutions; Payment societies; Societies issuing electronic money; Postal service providers operating in accordance with the Law on Postal Service; National Bank of Moldova when acting other than a monetary policy institution; and State Treasury of the Ministry of Finance.

IV Relationships with payment service providers Law on Public Finances and Fiscal Responsibility # 181 dated July 25, 2014, Article 62 (7) The MoF may engage commercial banks to perform certain operations related to cash execution of the budgets, including: cash operations of government institutions; foreign currency payments by government organizations; cash receipts from individuals; cash receipts from tax collectors; payments of social benefits and compensations.

IV Relationships with payment service providers Law on Government Budget for 2017, Article 13 With contracts concluded between the MoF and payment service providers, fees for services on payment of compensations shall not exceed 0.8 percent of the amount to be distributed. A fee for disbursement of cash by financial institutions to pay social benefits shall be not more than 0.25 percent of the amount disbursed. Fees for collecting payments from households, tax collectors, and tax officers shall be not more than 1.0 percent of the amount received, but not less than 1 leu (US$0.055) and not more than 2.5 leus (US$0.14) per payment.

IV Relationships with payment service providers Banking services for local Treasury offices Contract for procuring banking services for local Treasury offices: Subject of contract: Provision of services related to cash operations; Provision of services related to foreign currency operations. Fee levels (are negotiated upon conclusion of a contract): Disbursement of cash Currency conversion Execution of payment documents. Fees are paid on a monthly basis. A tender is held every three years.

IV Relationships with payment service providers Receipt of payments from individuals and tax collectors Contracts for collecting receipts from individuals and tax collectors into the national public budget are concluded for indefinite time. Fees are charged in accordance with the Law on Government Budget. Fees shall be paid on a monthly basis. Contracts concluded with six commercial banks and the Moldova Postal Service.

IV Relationships with payment service providers Services related to disbursement of pensions, allowances, and social payments Contract on cooperation with the Moldova Postal Service The contract has been concluded between the payment service provider and the Ministry of Finance. The arrangement is a model contract for subsequent conclusion of contracts between Moldova postal offices and social assistance departments in territorial administrative units. Fees are charged in accordance with the Law on Government Budget. The contract is automatically renewed every year unless the parties put forward new terms and conditions.

IV Relationships with payment service providers Services on distribution and disbursement of cash to individuals Agreement on the provision of payment agent services Has been concluded in addition to the Procurement Contract for Banking Services for Local Treasury Offices. The subject of the agreement is disbursement of cash to individuals (based on information and using monies provided for these purposes by the Ministry of Finance). Fees are charged in accordance with the Procurement Contract for Banking Services for Local Treasury Offices.

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