1.The Bank shall be the sole fiscal agent, banker and foreign exchange dealer for the state and all specified public entities. Without prejudice to the generality of the forgoing the Bank may;
a)be the official depository and foreign exchange dealer for the state or specified public entity concerned and may accept deposits and effect payment for the account of the State or specified public entity, provided that the Bank may after consultation with the State or the specified public entity, delegate these functions to any other Bank;
b)Maintain and operate special accounts in accordance with arrangements made
c)Between the Bank and the State or specified public entity concerned;
d)Service the public debt for the account of the State;
e)Pay, remit, collect or accept for deposit or custody funds in the Republic or abroad;
f)Purchase, sell, transfer or accept for custody cheques, notes, bills of exchange and securities;
g)collects the proceeds, whether principal or interest, resulting from the sale for, or accruing to the interest of, the State or a specified public entity, or securities or other property;
h)Purchase, sell, transfer or accept for custody, gold, silver or foreign exchange,
2.Notwithstanding the above paragraph the Bank may authorize specified public entities to conduct particular transactions with commercial banks.
3.The Bank shall be consulted on the appropriate terms and conditions before the State enters into any credit arrangement or debt obligation in foreign currency exceeding the equivalent of one million Somali Shillings, or issues bonds in any amount denominated in Somali Shillings.
Credit to the State and Public bodies
Subject to the provision of Article 41, and except as provided under Article 42, 43 and 48, the Bank may;
a)Make direct advances to the State, and with the guarantee of the State, to any specified public entity. The advances shall bear interest at such rates as may be determined by the Bank. In agreement with Minister but in no event shall it be less than two and one-half per centum per annum;
b)Purchase, hold or sell negotiable securities of any maturity issued by the State or issued by a specified public entity and guaranteed by the State;
c)Give guarantees for the State or for any public body.
Limit on credit to the State and Public bodies
1.The total amount of credit extended by the bank under the previous of article 31(b) and article 4(a) and (b) and Article 40 (a) awl (b) other than bonds accepted pursuant to the third paragraph of Article (48) and outstanding at any times, shall not exceed thirty-five per centum of the average annual ordinary revenue collected by the State during the last three fiscal years for which accounts are substantially completed, provided that of the total amount of that credit not more than one-seventh shall be in respect to credit to all public bodies.
2.The total of the guarantees given by the Bank for the State or any public body under Article 40 (c), and outstanding at any time, shall not exceed three per centum of the average annual ordinary revenue collected by the State during the last three fiscal years for which accounts are substantially completed.
3.Any payment by the Bank under a guarantee shall be regarded as credit extended to the State or the public body, as appropriate, and outstanding until reimbursed, but the Bank and the Minister may agree to deem all or part of payment as credit extended ratably in the three succeeding years for the purpose of the first paragraph of this Article if the payment would otherwise cause either limit therein to be exceeded.
Advances in anticipation of external funds and
In respect of subscriptions to international financial institution
1.In anticipation of funds to be received from abroad, the Bank may make temporary advances to the State of up to fifty per centum of such funds for which satisfactory commitments exist. These advances shall be repaid as soon as the funds in respect of which they are made are received.
2.The Bank may make advances to the State for the payment subscriptions to international financial institutions of which the State is or becomes a member.
Investment in specialized financial institution
The Bank may purchase, hold or sell shares of specialized financial institution in the Republic sponsored or establish by the State for the purpose of financing economic development, provide that the amount of such shares held by the Bank shall not at anyone time exceed the paid up capital and General Reserve Fund of the Bank.
Prohibition of other credit to the State and public bodies
Except as provided in Article 31 (b), 40, 41, 42, 43 and 48, the Bank shall not extend any credit or guarantee directly or indirectly to the State or any public body.
Adviser to the State
1.It shall be the duty of the Bank to advise the Prime Minister on any matter which in its opinion is likely to effect the achievement of the principal objectives of the Bank as defined in Article 3.
2.The Prime Minister and the Council of Ministers shall request the Bank to render advice on particular measures, situations or transactions relating to banking, currency, exchange and credit, as well as on all matters concerning the public debt.