COBAC Regulation R-93/05 on the Coverage of Fixed Assets

COBAC Regulation R-93/05 on the Coverage of Fixed Assets

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 shall permanently comply with a minimum ratio, known as the fixed asset coverage ratio, between the amount of their net equity and permanent resources on the one hand, and that of their fixed assets on the other.

Article 2 Net equity is determined in accordance with Regulation No. R-93/02. Permanent resources include bond issues and negotiable debt instruments with an initial maturity of more than five years issued by the institution and not allocated to banking operations, as well as, where applicable, the excess of loans contracted with credit institutions and financial institutions over loans granted of the same nature and acquired negotiable debt instruments.

Article 3 The fixed assets included in the denominator are net of depreciation and provisions. These include operating or leased fixed assets, other tangible fixed assets, and equity stakes (excluding equipment certificates and other instruments of the same nature).

Article 4 The fixed asset coverage ratio prescribed in Article 1 is set at a minimum of 100%.

Article 5 For the application of Article 4 above, a monthly declaration is submitted to the General Secretariat of the Banking Commission in the forms defined by an Instruction from the President of COBAC.

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 all necessary measures to comply with this standard within a specified timeframe. 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 a credit institution to temporarily derogate from the provisions of this Regulation, granting it a timeframe to regularize its situation.

Article 8 These provisions, which enter into force on 1 July 1993, apply to the credit institutions covered by the Convention of 16 October 1990 establishing a Central African Banking Commission.

Article 9 The General Secretary of the Banking Commission is responsible for the implementation of this Regulation.

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