Regulatory Alerts2022-01-01
Instruction No. 2022-17/IMF Regarding Sanctions
The Central Bank of Djibouti issued Instruction No. 2022-17/IMF to establish disciplinary sanctions and compliance deadlines for microfinance institutions operating in Djibouti. The directive empowers the regulator to enforce adherence to legal and regulatory frameworks through measures ranging from injunctions and warnings to the suspension of operations, removal of management, and revocation of institutional approval. Institutions granted a compliance period that fail to rectify violations within the stipulated timeframe face administrative fines capped at 5% of their own funds, without prejudice to applicable criminal penalties.
CENTRAL BANK OF DJIBOUTI
INSTRUCTION NO. 2022-17/IMF REGARDING SANCTIONS
The Governor of the Central Bank of Djibouti,
Having regard to Law No. 118/AN/11/6th L of January 22, 2011, amending the statutes of the Central Bank of Djibouti;
Having regard to Law No. 179/AN/07/5th L of May 16, 2007, regulating microfinance activities within the territory of the Republic of Djibouti;
Having regard to Law No. 117/AN/11/6th L of May 25, 2011, regulating financial cooperatives;
Having regard to the Commercial Code, Book 3 on Company Law;
Having regard to Law No. 119/AN/11/6th L of January 22, 2011, concerning the establishment and supervision of credit institutions and financial auxiliaries;
Having regard to Decree No. 2018-171/PRE of May 8, 2018, appointing the Governor of the Central Bank of Djibouti.
Orders:
Article 1: The Central Bank shall ensure that Microfinance Institutions (MFIs) comply with the legal and regulatory texts it has issued.
Article 2: The Central Bank may withdraw its approval from a manager or director who violates the provisions of these instructions or in cases of mismanagement, and may request their replacement in accordance with applicable rules.
Article 3: When a microfinance institution violates a legal or regulatory provision or is found guilty of obstructing the Central Bank's inspections, it is subject to the following disciplinary sanctions:
- Injunction;
- Admonition;
- Warning;
- Reprimand;
- Suspension or prohibition of all or part of operations;
- Suspension or removal of managers;
- Dismissal of the statutory auditor;
- Appointment of a provisional administrator;
- Withdrawal of approval.
Disciplinary sanctions are imposed without prejudice to common law criminal penalties.
Article 4: Without prejudice to the provisions of Article 3 of this instruction, the Central Bank may grant an institution a deadline in order to:
- Comply with certain provisions;
- Implement necessary adaptations to its organization and operations.
An institution that fails to meet these obligations within the stipulated deadline is subject to a fine of up to 5% of its own funds.
Article 5: This instruction enters into force upon its signature.
Done in Djibouti, on March 14, 2022
The Governor