Regulatory Alerts2009-11-24
COBAC Circular Letter LC-COBAC/44 on Minimum Bank Capital Requirements
The Central African Banking Commission issued Circular Letter LC-COBAC/44 to enforce a phased increase of minimum bank share capital to 10 billion CFA francs, requiring existing institutions to reach 5 billion by June 2010, 7.5 billion by June 2012, and the full threshold by June 2014. The letter mandates that banks with current capital below the target submit a formally approved capital enhancement plan by June 30, 2010. This directive ensures all financial institutions comply with the transitional capital requirements established under Regulation COBAC R-2009/01.
CENTRAL AFRICAN BANKING COMMISSION
General Secretariat P.O. Box 1 917 - Yaoundé Republic of Cameroon
TELEX - BANETAC 8343 KN Tel. (237) 22.23.40.30 (237) 22.23.40.60 FAX. (237) 22.23.82.16
LG-COB/44 /DCP/JHI
Yaoundé, 24 NOV. 2009
SUMMARY
- All Banks
- and Financial Institutions
Subject: Minimum share capital.
Dear General Manager,
The Banking Commission has decided, by Regulation COBAC R-2009/01, to raise the minimum capital level for banks to 10 billion CFA francs. For existing banks, a five-year transitional period was established starting from June 1, 2009. To this end, the Regulation requires all banks to increase their share capital to at least 5,000 million CFA francs by the end of June 2010, 7,500 million by the end of June 2012, and 10,000 million by the end of June 2014.
Your latest periodic declarations show that your institution's share capital stands at 6,000 million CFA francs, below the threshold to be met by the end of June 2014. Consequently, I invite you to inform me of the measures your institution has taken or intends to take to comply with this regulatory provision. In particular, you are requested to submit to me, before June 30, 2010, the capital enhancement plan for your institution covering the entire transitional period mentioned above. This plan must be formally approved by your corporate bodies.
Please accept, Dear General Manager, the assurance of my distinguished consideration.
The General Secretary,
IDRISS AHMED IDRISS