COMMISSION BANCAIRE DE L'AFRIQUE CENTRALE

INSTRUCTION COBAC I-2015/01

AMENDING THE CHART OF ACCOUNTS FOR CREDIT INSTITUTIONS

The President of the Central African Banking Commission,

Having regard to the Convention of 16 October 1990 establishing the Central African Banking Commission, Having regard to the Convention of 17 January 1992 on the Harmonization of Banking Regulation in the States of Central Africa, Having regard to Regulation COBAC R-98/01 of 15 February 1998 relating to the Chart of Accounts for Credit Institutions, Having regard to Regulation COBAC R-99/01 of 02 December 1999 setting the procedures for updating the Chart of Accounts for Credit Institutions, Having regard to Regulation COBAC R-2003/01 of 15 January 2003 relating to the organization of accounting for credit institutions, Having regard to Regulation COBAC R-2014/01 of 21 March 2014 relating to the classification, accounting, and provisioning of credit institution claims, Having regard to Instruction COBAC I-2002/01 of 20 March 2002 amending the Chart of Accounts for Credit Institutions, Having regard to Instruction COBAC I-2003/01 of 14 November 2003 amending the Chart of Accounts for Credit Institutions and Instruction COBAC I-2002/01,

DECIDES:

Article 1 - The Chart of Accounts for Credit Institutions is amended in accordance with the provisions set out in Articles 2 to 14 of this Instruction.

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Article 2 - The sub-account "191 - Provisions for general banking risks" is subdivided as follows:

• 1911 – General provisions covering credit risk
• 1912 – Other provisions for general banking risks

The following text is inserted between the first and second paragraphs of the commentary for account 19:
"General provisions covering credit risk apply to the total outstanding amount of healthy claims, sensitive claims, immobilized claims, and unpaid claims. The minimum annual rate for allocating general provisions is set at 0.5% of the total outstanding amount. The target amount for general provisions covering credit risk is set at a minimum of 2% of the gross outstanding claims recorded on the balance sheet."

Article 3 - The sub-account "265 - Investment securities" is subdivided as follows:
a) "2651 - Public investment securities" itself subdivided into sub-accounts:

• 26511 - Public investment securities admitted as collateral for BEAC refinancing
• 26512 - Other public investment securities
  b) "2652 - Private investment securities" itself subdivided into sub-accounts:
• 26521 - Private investment securities admitted as collateral for BEAC refinancing
• 26522 - Other private investment securities

Article 4 - a) The sub-account "29651 - Private investment securities" is subdivided as follows:

• 296511 - Private investment securities admitted as collateral for BEAC refinancing
• 296512 - Other private investment securities
  b) The account "29652 - Public investment securities" is subdivided into sub-accounts:
• 296521 - Public investment securities admitted as collateral for BEAC refinancing
• 296522 - Other public investment securities

Article 5 - The following text is inserted between the fifth and sixth paragraphs of the introduction of "Class 3 - Accounts with customers":
"Healthy claims (including debit current or checking accounts) are claims whose repayment is made in accordance with contractual provisions and which are held against counterparties whose ability to honor all their current and future commitments raises no cause for concern (solid financial situation, quality shareholding, satisfactory sector situation and prospects, etc.). Discounted and unmatured values (commercial bills, mobilization of claims on foreign countries, etc.) accepted by the drawee and whose final settlement is not in doubt are also considered healthy claims.

Sensitive claims (including debit current or checking accounts) are claims whose repayment is made in accordance with contractual provisions, but whose current and future ability of the beneficiary to repay, in full and on time, their commitments raises cause for concern, due to intrinsic factors (existence of signs of deterioration of the client's financial situation, management problems, change in shareholding, etc.) or external factors (difficulties in the client's sector of activity, downward trend in the market value of securities issued by the counterparty not justified by the general level of interest rates, etc.)."

Article 6 - Within account "30 – Long-term credits":
a) the following sub-accounts are deleted:

• 301 - Real estate investment credits
• 302 - Housing credits
• 303 - Equipment credits
• 304 - Moratorium or consolidated credits to the State
• 305 - Moratorium campaign credits
• 306 - Consumer credits
  b) the following sub-accounts are created:
• 301 - Healthy long-term credits
• 302 - Sensitive long-term credits

c) the sub-account "301 - Healthy long-term credits" is subdivided as follows:

• 3011 - Real estate investment credits
• 3012 - Housing credits
• 3013 - Equipment credits
• 3014 - Campaign credits
• 3015 - Consumer credits
• 3016 - Moratorium or consolidated credits to the State
• 3017 - Unallocable credits
  • 30171 - Rescheduled credits
  • 30172 - Restructured credits
  • 30173 - Other consolidated credits
    d) the sub-account "302 - Sensitive long-term credits" is subdivided as follows:
• 3021 - Real estate investment credits
• 3022 - Housing credits
• 3023 - Equipment credits
• 3024 - Moratorium campaign credits
• 3025 - Consumer credits
• 3026 - Moratorium or consolidated credits to the State
• 3027 - Unallocable credits
  • 30271 - Rescheduled credits
  • 30272 - Restructured credits
  • 30273 - Other consolidated credits

Article 7 - Within account "31 – Medium-term credits":
a) the following sub-accounts are deleted:

• 311 - Real estate investment credits
• 312 - Housing credits
• 313 - Equipment credits
• 314 - Moratorium or consolidated credits to the State
• 315 - Moratorium campaign credits
• 316 - Consumer credits
• 317 - Unallocable credits
  b) the following sub-accounts are created:
• 311 - Healthy medium-term credits
• 312 - Sensitive medium-term credits

c) the sub-account "311 - Healthy medium-term credits" is subdivided as follows:

• 3111 - Real estate investment credits
• 3112 - Housing credits
• 3113 - Equipment credits
• 3114 - Campaign credits
• 3115 - Consumer credits
• 3116 - Moratorium or consolidated credits to the State
• 3117 - Unallocable credits
  • 31171 - Rescheduled credits
  • 31172 - Restructured credits
  • 31173 - Other consolidated credits
    d) the sub-account "312 - Sensitive medium-term credits" is subdivided as follows:
• 3121 - Real estate investment credits
• 3122 - Housing credits
• 3123 - Equipment credits
• 3124 - Campaign credits
• 3125 - Consumer credits
• 3126 - Moratorium or consolidated credits to the State
• 3127 - Unallocable credits
  • 31271 - Rescheduled credits
  • 31272 - Restructured credits
  • 31273 - Other consolidated credits

Article 8 - Within account "32 – Short-term credits":
a) the following sub-accounts and their subdivisions are deleted:

• 320 - Discounted checks or immediate credit checks
• 321 - Commercial bills
  • 3211 - Commercial discount
  • 3212 - Factoring
  • 3213 - Documentary discount
• 322 - Treasury credits
• 323 - Equipment credits
• 324 - Support credits on public contracts
  • 3241 - Advances on pledged public contracts
  • 3242 - Other support credits
• 325 - Campaign credits
  • 3251 - Productivity and pre-financing credits
  • 3252 - Blank advances
  • 3253 - Advances on stocks
  • 3254 - Export credits
  • 3255 - Consolidated credits
• 327 - Unallocable credits
  b) the following sub-accounts are created:
• 321 - Healthy short-term credits
• 322 - Sensitive short-term credits
  c) the sub-account "321 - Healthy short-term credits" is subdivided as follows:
• 3210 - Discounted checks or immediate credit checks
• 3211 - Commercial bills
  • 32111 - Commercial discount
  • 32112 - Factoring
  • 32113 - Documentary discount
• 3212 - Treasury credits
• 3213 - Equipment credits
• 3214 - Support credits on public contracts
  • 32141 - Advances on pledged public contracts
  • 32142 - Other support credits
• 3215 - Campaign credits
  • 32151 - Productivity and pre-financing credits
  • 32152 - Blank advances
  • 32153 - Advances on stocks
  • 32154 - Export credits
  • 32155 - Consolidated campaign credits
• 3216 - Consumer credits
• 3217 - Unallocable credits
  • 32171 - Rescheduled credits
  • 32172 - Restructured credits
  • 32173 - Other consolidated credits
    d) the sub-account "312 - Sensitive short-term credits" is subdivided as follows:
• 3220 - Discounted checks or immediate credit checks
• 3221 - Commercial bills
  • 32211 - Commercial discount
  • 32212 - Factoring
  • 32213 - Documentary discount
• 3222 - Treasury credits
• 3223 - Equipment credits
• 3224 - Support credits on public contracts
  • 32241 - Advances on pledged public contracts
  • 32242 - Other support credits
• 3225 - Campaign credits
  • 32251 - Productivity and pre-financing credits
  • 32252 - Blank advances
  • 32253 - Advances on stocks
  • 32254 - Export credits
  • 32255 - Consolidated campaign credits
• 3226 - Consumer credits
• 3227 - Unallocable credits
  • 32271 - Rescheduled credits
  • 32272 - Restructured credits
  • 32273 - Other consolidated credits

Article 9 - Within account "34 – Troubled claims":
a) the following sub-accounts and their subdivisions are deleted:

• 343 - Doubtful claims covered by State guarantee
• 344 - Doubtful claims covered by real security
  • 3441 - Claims covered by real security doubtful for less than one year
  • 3442 - Claims covered by real security doubtful for 1 to 2 years
  • 3443 - Claims covered by real security doubtful for 2 to 3 years
  • 3444 - Claims covered by real security doubtful for more than 3 years
• 345 - Other doubtful claims
  • 3451 - Other doubtful claims for less than one year
  • 3452 - Other doubtful claims for 1 to 2 years
  • 3453 - Other doubtful claims for more than 2 years
    b) the sub-account "342 – Immobilized claims" is subdivided as follows:
• 3421 – Direct claims on the State
• 3422 – Claims guaranteed by the State
• 3423 – Advances on pledged public contracts
• 3424 – Advances on securities issued by the State
• 3425 – Other immobilized claims
  c) the following sub-accounts are created:
• 344 - Doubtful claims covered by eligible guarantees
• 345 - Other doubtful claims
  d) the sub-account "344 - Doubtful claims covered by eligible guarantees" is subdivided as follows:
• 3441 - Doubtful claims for up to one year covered by eligible guarantees
• 3442 - Doubtful claims for more than one year and up to two years covered by eligible guarantees
• 3443 - Doubtful claims for more than 2 years and up to 3 years covered by eligible guarantees
• 3444 - Doubtful claims for more than 3 years covered by eligible guarantees
  e) the sub-account "345 - Other doubtful claims" is subdivided as follows:
• 3451 - Other doubtful claims for up to one year
• 3452 - Other doubtful claims for more than one year and up to 2 years
• 3458 - Unrecoverable claims on groups or related parties
• 3459 - Other unrecoverable claims.
  f) The following text is inserted between the fourth and fifth paragraphs of the comments for account 34:
  "Eligible guarantees are fiduciary transfers of money and pledges of cash (security deposits; time deposits or Treasury bills subscribed with the credit institution itself, or negotiable debt securities); the pledge of debt securities issued by the State; counter-guarantees received from a credit institution established in the CEMAC, in the UMOA, or in OECD countries, as defined by Regulation COBAC R-2010/01 relating to the coverage of risks for credit institutions; guarantees received from multilateral development banks, multilateral guarantee bodies, or public financing or guarantee bodies established in the CEMAC, in the UMOA, or in OECD countries, as defined by Regulation COBAC R-2010/01 relating to the coverage of risks for credit institutions; mortgages.

To be taken into account, guarantees must: be formalized in writing drawn up and registered in compliance with current legal and regulatory provisions; expressly stipulate that these values are allocated to cover the risks incurred; have a maturity at least equal to that of the covered credit or the covered signature commitment; regarding counter-guarantees received from a credit institution, be stipulated on first demand.

Claims for which a credit institution has agreed on new repayment terms with a client whose claims are classified as sensitive, unpaid, or doubtful claims may be reclassified among healthy exposures. The reclassification of a troubled, restructured, or rescheduled claim into healthy exposures can only occur if the conditions set out in Article 14 of Regulation COBAC R-2014/01 relating to the classification, accounting, and provisioning of credit institution claims are met. This reclassification is then made in the accounts of 'Moratorium or consolidated credits to the State' for the State and 'Unallocable credits' for other clients. These accounts thus record claims whose initial contractual terms are subject to amendments or novation by new agreements due to the borrower's financial situation, either by extending their duration (so-called rescheduled claims) or by renegotiating all their initial conditions (restructured claims). Claims on clients other than the State that have been both rescheduled and restructured are recorded among 'Other consolidated credits'. Claims restructured or rescheduled classified among healthy exposures must be transferred to sensitive exposures as soon as they meet the characteristics of this category of claims.

All claims deemed unrecoverable must be previously recorded in accounts 3458 or 3459 depending on the case. Unrecoverable claims are claims whose non-recovery is deemed certain after exhaustion of all amicable or judicial avenues, or for any other relevant consideration. Approval from the Secretary General of COBAC is required for any write-off or abandonment of claims held on groups or related parties.

Related parties include the institution's subsidiaries, affiliated companies, and any party (including its subsidiaries, affiliated companies, and special purpose vehicles) over which the credit institution exercises control or which exercises control over it. This may include major shareholders, directors, senior management, staff, their direct or indirect interests, their close relatives, as well as corresponding persons in affiliated institutions."

Article 10 - Within account "37 – Overdrafts and sight credit accounts":
a) the sub-account "371 - Current accounts" is subdivided as follows:

• 3711 – Healthy current accounts
• 3712 – Sensitive current accounts
• 3713- Other current accounts
  b) the sub-account "372 - Checking accounts" is subdivided as follows:
• 3721 – Healthy checking accounts
• 3722 – Sensitive checking accounts
• 3723- Other checking accounts
  c) The following text is inserted between the first and second paragraphs of the comments for account 37:
  "Credit institutions may opt to identify current or checking accounts (between the categories of healthy claims or sensitive claims) solely by means of the relevant identification attributes."

Article 11 - Within account "39 – Provisions for depreciation of customer accounts":
a) the following sub-accounts and their subdivisions are deleted:

• 393 - Provisions on doubtful claims covered by State guarantee
• 394 - Provisions on doubtful claims covered by real security
  • 3941 - Provisions on claims covered by real security doubtful for less than one year
  • 3942 - Provisions on claims covered by real security doubtful for 1 to 2 years
  • 3943 - Provisions on claims covered by real security doubtful for 2 to 3 years
  • 3944 - Provisions on claims covered by real security doubtful for more than 3 years
• 395 - Provisions on other doubtful claims
  • 3951 - Provisions on other doubtful claims for less than one year
  • 3952 - Provisions on other doubtful claims for 1 to 2 years
  • 3953 - Provisions on other doubtful claims for more than 2 years
    b) the following sub-accounts are created:
• 394 - Provisions on doubtful claims covered by eligible guarantees
• 395 - Provisions on other doubtful claims
  c) the sub-account "394 - Doubtful claims covered by eligible guarantees" is subdivided as follows:
• 3941 - Provisions on doubtful claims for up to one year covered by eligible guarantees
• 3942 - Provisions on doubtful claims for more than one year and up to 2 years covered by eligible guarantees
• 3943 - Provisions on doubtful claims for more than 2 years covered by eligible guarantees
  d) the sub-account "395 - Other doubtful claims" is subdivided as follows:
• 3951 - Provisions on other doubtful claims for up to one year
• 3952 - Provisions on other doubtful claims for more than one year and up to 2 years.

Article 12 - Within account "92 – Commitments given on customer order":
a) the following sub-accounts are deleted:

• 921 - Acceptances to pay
• 922 - Confirmed documentary credit openings
• 923 - Other confirmed credit openings
• 924 - Guarantees, avals
• 925 - Credit repayment guarantees
• 929 - Other guarantees
  b) the following sub-accounts are created:
• 921 - Healthy commitments
• 922 - Sensitive commitments
  c) the sub-account "921 - Healthy commitments" is subdivided as follows:
• 9211 - Acceptances to pay
• 9212 - Confirmed documentary credit openings
• 9213 - Other confirmed credit openings
• 9214 - Guarantees, avals
• 9215 - Credit repayment guarantees
• 9219 - Other guarantees
  d) the sub-account "922 - Sensitive commitments" is subdivided as follows:
• 9221 - Acceptances to pay
• 9222 - Confirmed documentary credit openings
• 9223 - Other confirmed credit openings
• 9224 - Guarantees, avals
• 9225 - Credit repayment guarantees
• 9229 - Other guarantees
  e) The following text is inserted at the beginning of the comments for account 92:
  "Healthy commitments are those made to clients classified in the category of healthy claims, i.e., commitments given that respect contractual provisions and are held against counterparties whose ability to honor all their current and future commitments raises no cause for concern (solid financial situation, quality shareholding, satisfactory sector situation and prospects, etc.).

Sensitive commitments are those made to clients classified in the category of sensitive claims, i.e., commitments given that respect contractual provisions, but whose current and future ability of the beneficiary to honor, in full and on time, their commitments raises cause for concern, due to intrinsic factors (existence of signs of deterioration of the client's financial situation, management problems, change in shareholding, etc.) or external factors (difficulties in the client's sector of activity, downward trend in the market value of securities issued by the counterparty not justified by the general level of interest rates, etc.)."

Article 13 - Within account "95 – Operations on securities and values pledged as collateral for money market operations":
a) the sub-account "951 - Public bills pledged as collateral for money market operations" is subdivided as follows:

• 9511 - Public investment securities pledged as collateral for money market operations
• 9512 – Other public securities and values pledged as collateral for money market operations
  b) the sub-account "952 - Private bills deposited as collateral for money market operations" is subdivided as follows:
• 9521 - Private investment securities pledged as collateral for money market operations
• 9522 – Other private securities and values pledged as collateral for money market operations

Article 14 - Annex I – Identification attributes is completed as follows:
"XI – CLASSIFICATION OF CLAIMS
Credit institutions must identify, by all adequate technical means, healthy claims, sensitive claims, immobilized claims, unpaid claims, and doubtful claims, in compliance with the definitions given in Regulation COBAC R-2014/01 relating to the classification, accounting, and provisioning of credit institution claims."

Article 15 - This Instruction enters into force as of its date of signature.

Made in Libreville, on 06 JUL. 2015

The President,
Lucas ABAGA NCHAMA