COBAC Regulation R-93/07 on Transformation by Credit Institutions

COBAC Regulation R-93/07 on Transformation Carried Out by Credit Institutions

The Central African Banking Commission, Having regard to the Convention of 16 October 1990 establishing a Central African Banking Commission; Having regard to Article 9, paragraph 1 of the Annex to the Convention of 16 October 1990; DECIDES

Article 1 Credit institutions referred to in Article 2 of the Annex to the Convention of 16 October 1990 establishing a Central African Banking Commission shall comply with a minimum ratio between their assets and liabilities maturing in more than five years and their resources of the same term, known as the "long-term transformation coefficient".

Article 2 The numerator of the long-term transformation coefficient comprises:

• net equity as defined by Regulation R-93/02;
• the portion of resources treated as equity under Article 3 of Regulation R-93/02 exceeding the amount of basic equity and therefore not included in the calculation of net equity, retained for the portion repayable beyond a five-year period;
• the portion maturing in more than five years of other term borrowings from customers and credit institutions;
• irrevocable refinancing obtained from the BEAC for a term of more than five years in respect of claims included in the denominator of the long-term transformation coefficient.

Article 3 The denominator of the long-term transformation coefficient comprises: a) tangible fixed assets; b) all assets with a remaining term of more than five years, at their residual value at that term, which notably includes:

• maturities of customer loans with a term exceeding five years;
• the portion to be amortized (under social accounting rules) beyond a five-year period on goods leased with purchase options or under financial leasing; c) equipment bonds and similar instruments, equity stakes, and investment securities:
• maturities of bonds and debentures with a term exceeding five years;
• maturities of loans to credit institutions with a term exceeding five years; d) the amount of doubtful claims on customers and credit institutions, net of existing and to-be-established provisions.

Article 4 Subject institutions must, at all times, maintain a long-term transformation coefficient of at least 50%.

Article 5 Credit institutions shall submit to the General Secretariat of the Banking Commission, at the end of each month, the long-term transformation coefficient on a statement conforming to the model defined by Instruction.

Article 6 In case of non-compliance with the standard set forth in Article 4 of this Regulation, the Banking Commission may issue an injunction requiring, inter alia, that the concerned institution take within a specified period all measures necessary to bring it into compliance with this standard. If a credit institution fails to comply with an injunction or heed a warning, or seriously breaches the regulation, the Banking Commission may impose one or more of the disciplinary sanctions provided for in Article 13 of the Annex to the Convention of 16 October 1990.

Article 7 The Banking Commission may authorize an institution to temporarily derogate from the provisions of this Regulation by granting it a period to regularize its situation.

Article 8 This Regulation shall enter into force on 1 July 1993.

Article 9 The Secretary General of the Banking Commission is charged with the execution of this Regulation.

Done at Yaoundé on 19 April 1993 For the Banking Commission, The President, Jean-Félix MAMALEPOT