Central Bank of Tunisia Circular No. 2016-07 of December 9, 2016

Tunis, December 9, 2016 Central Bank of Tunisia Circular No. 2016-07 Subject: Financial assistance within the framework of Articles 19, 20 and 21 of Law No. 2016-35 of April 25, 2016 establishing the statutes of the Central Bank of Tunisia. The Governor of the Central Bank of Tunisia Having regard to Law No. 2016-35 of April 25, 2016 establishing the statutes of the Central Bank of Tunisia and in particular its Articles 19, 20, 21 and 63; Having regard to Law No. 2016-48 of July 11, 2016 relating to banks and financial institutions; Having regard to Law No. 2000-92 of October 31, 2000 relating to the transfer or pledge of professional claims and the mobilization of related credits; Having regard to Law No. 2012-24 of December 24, 2012 relating to the repurchase agreement convention; Having regard to Bank Circular No. 87-47 of December 23, 1987 relating to the procedures for granting, monitoring and refinancing of credits, as amended and supplemented by subsequent texts; Having regard to Circular No. 91-24 of December 17, 1991 relating to the division, risk coverage and monitoring of commitments, as amended and supplemented by subsequent texts; Having regard to Bank Circular No. 2005-09 of July 14, 2005 relating to the organization of the money market, as amended and supplemented by subsequent texts; Having regard to the resolution of the Board of Directors of the Central Bank of Tunisia dated November 30, 2016;

Having regard to the opinion of the Compliance Control Committee No. 06-2016 dated December 6, 2016, as provided for in Article 42 of Law No. 2016-35 of April 25, 2016 establishing the statutes of the Central Bank of Tunisia. Decides: Article 1: Subject This circular aims to define the conditions for granting by the Central Bank of Tunisia to banks and financial institutions, the financial assistance provided for in Articles 19, 20 and 21 of Law No. 2016-35 of April 25, 2016 establishing the statutes of the Central Bank of Tunisia. Article 2: Eligibility for financial assistance Within the framework of its functions regarding financial stability provided by its statutes, the Central Bank of Tunisia may grant financial assistance in the form of secured loans or through the repurchase of eligible assets, to:

• Banks and financial institutions that are solvent but whose liquidity is temporarily impaired; and
• Banks and financial institutions whose solvency status is compromised, provided that their failure poses a threat to the stability of the financial system. The granting of this assistance requires prior approval of a State guarantee, in accordance with prevailing legislation. Non-resident banks are not eligible for financial assistance from the Central Bank of Tunisia, in accordance with Article 78 of Law No. 2016-48 mentioned above. The use of financial assistance, subject of this article, may in no case be combined with any other support falling within the framework of monetary policy implementation.

Article 3: Assessment by the Central Bank of Tunisia For the purpose of granting financial assistance under the preceding articles, the Central Bank of Tunisia assesses at its sole discretion the liquidity and solvency situation of banks and financial institutions applying for this assistance.

Article 4: Conditions for accessing financial assistance To be eligible for the aforementioned financial assistance, eligible banks and financial institutions must first submit to the Central Bank of Tunisia a recovery plan to resolve their liquidity and/or solvency difficulties.

Article 5: Procedure for obtaining the State guarantee Financial assistance to banks and financial institutions referred to in the second bullet point of Article 2 of this circular may be granted by the Central Bank of Tunisia only after obtaining a prior State guarantee in its favor. To this end, the Central Bank of Tunisia submits to the Ministry responsible for Finance a request for obtaining said guarantee.

Article 6: Applicable interest rate The interest rate applicable to financial assistance operations is equal to the lending facility rate plus a margin of at least 250 basis points.

Article 7: Duration of financial assistance Financial assistance is granted for a period not exceeding 3 months. However, the Central Bank of Tunisia may, where applicable, renew this assistance up to three times without the total duration exceeding 12 months, provided that the bank or financial institution meets, at the time of submitting the renewal request, the eligibility conditions set out in Article 2 of this circular.

Article 8: Eligible assets and guarantees The Central Bank of Tunisia may accept, within the framework of financial assistance, any asset or guarantee approved by its Board of Directors, subject to applying adequate haircuts established in a bilateral agreement between the Central Bank of Tunisia and the bank or financial institution, subject to Article 9 of this circular.

Article 9: Financial assistance agreement Before benefiting from financial assistance, the bank or financial institution must conclude with the Central Bank of Tunisia an agreement specifying in particular the obligations of the parties, the procedures and conditions for providing liquidity, the categories of assets to be pledged as collateral, the procedures for their transfer, and the haircut rates applicable to these assets.

Article 10: Control by the Central Bank of Tunisia To ensure the reliability of information provided regarding the guarantees established and the proper implementation of the liquidity and/or solvency recovery plan set out in Article 4 of this circular, the Central Bank of Tunisia may at any time conduct specific document-based and/or on-site inspections within the premises of the beneficiary bank or financial institution.

Article 11: Entry into force This circular shall enter into force as of April 3, 2017.

THE GOVERNOR CHEDLY AYARI