Regulatory Alerts2011-12-02
COBAC Regulation R-2009/01 Fixing Minimum Share Capital for Credit Institutions
The Central African Monetary Commission (COBAC) issued Regulation R-2009/01 to mandate minimum share capital requirements of 10 billion FCFA for banking institutions and 1 billion FCFA for financial institutions operating within the CEMAC region. The regulation establishes a five-year transitional period starting June 1, 2009, requiring banks to progressively increase their capital to 5 billion FCFA by June 2010 and 10 billion FCFA by June 2014, while financial institutions must scale up to 1 billion FCFA and 2 billion FCFA over the same timeline. It repeals all conflicting national provisions, specifies that implementation details will be set by instruction, and requires notification to currency and credit ministers, all subject institutions, professional associations, and publication across the official gazettes of member states.
COMMISSION BANCAIRE DE L'AFRIQUE CENTRALE COBAC Regulation R-2009/01 Fixing the Minimum Share Capital of Credit Institutions
The Central African Monetary Commission met on April 1, 2009 in Bata (Equatorial Guinea); Having regard to the Treaty establishing the Economic and Monetary Community of Central Africa (CEMAC) as well as its various annexes; Having regard to the Convention of October 16, 1990 establishing a Central African Monetary Commission, particularly the first paragraph of Articles 5 and 9 of its Annex; Having regard to the Convention of January 17, 1992 on the Harmonization of Banking Regulation in the States of Central Africa; Having regard to Regulation No. 02/05/CEMAC/UMAC/COBAC conferring competence on COBAC for determining the categories of credit institutions, their minimum capital, legal form, and authorized activities; Having regard to the provisions of the OHADA Uniform Act relating to commercial company law and economic interest groups;
Article 1. - Banking institutions with their registered office within the territory of CEMAC must have a minimum share capital equal to 10 billion FCFA. Article 2. - Financial institutions with their registered office within the territory of CEMAC must have a minimum share capital equal to 1 billion FCFA. Article 3. - This regulation repeals and replaces all contrary national provisions on the same subject matter. Article 4. - CEMAC credit institutions operating before the entry into force of this regulation benefit from a five-year transitional period starting June 1, 2009 to comply with it. To this end, all banks must increase their share capital to at least 5,000 million by the end of June 2010, to 7,500 million by the end of June 2012, and to 10,000 million by the end of June 2014, while all financial institutions must increase their capital to at least 1,000 million by the end of June 2010, to 1,500 million by the end of June 2012, and to 2,000 million by the end of June 2014. Article 5. - This regulation, the details of which will be specified by instruction as necessary, shall be notified to the Ministers responsible for currency and credit, as well as to all subject credit institutions and their professional associations, and published in the official gazette of all States.