Region

Jurisdiction

Regulator

2009-11-23

Centralized Risk Repository for CEMAC Credit Institutions

The Commission Bancaire de l’Afrique Centrale (COBAC) directs CEMAC credit institutions to guarantee accurate data submissions to the Centralized Risk Repository by auditing internal databases, correcting customer attributes, and strictly applying existing accounting and anti-money laundering regulations. Citing systemic non-compliance with the data exchange protocol, rigid information systems, and poor data quality that impair risk assessment, COBAC mandates personal executive oversight to ensure reliable database updates and timely corrections. Institutions that fail to implement these measures remain exposed to administrative sanctions under Article 46 of the January 17, 1992 Convention on Central African banking regulation.

Cameroon

Banque des Etats de l'Afrique Centrale

COMMISSION BANCAIRE DE L’AFRIQUE CENTRALE

The President

LC-COBAC/43 /DCP/JHI

Yaoundé, November 23, 2009

Mr. President, (all Professional Associations of Credit Institutions in the CEMAC)

See attached list -

Subject: Centralized Risk Repository for Credit Institutions in the CEMAC

Mr. President,

The initial cleanup works of the risk repositories for CEMAC banks and financial institutions, conducted by the Central Bank in Cameroon and the Central African Republic, show that most credit institutions do not comply with the terms of the data exchange protocol they have nevertheless agreed upon with the BEAC.

This situation stems from a lack of awareness leading to non-application of this data exchange protocol, information systems that do not incorporate the various mandatory fields required for declarations to the Risk Repository, and the rigidity of software applications that do not allow grouping sub-accounts under a single root linked to the same signatory.

Consequently, the Risk Repository suffers from low data reliability for many signatories, the inability to integrate numerous data due to illegibility, incorrect sectoral distribution, and difficulties in utilizing the data by credit institutions.

I cannot but remind you here of the importance of the Risk Repository as an indispensable working instrument for risk selection and customer knowledge by credit institutions. However, I regret the low involvement of these institutions in providing reliable data to feed this common database. I therefore invite you to require all executives of credit institutions under your jurisdiction to take personal responsibility in reviewing their internal databases, ensuring accurate reporting of customer data and related commitments, and making all necessary corrections.

You will note in this regard that the provisions relating to the Chart of Accounts for Credit Institutions (PCEC) under COBAC Regulation R-98/01 oblige credit institutions to integrate into their databases a number of identification attributes (nationality, profession, economic activity, residence, etc.) intended for both internal needs and those of users of the produced accounting and financial information. Compliance with these requirements should enable these institutions to fulfill all provisions contained in the data exchange protocol between credit institutions and the BEAC for the centralization of banking risks.

Furthermore, customer knowledge requirements contained notably in COBAC Regulation R-2005/01 regarding the due diligence of regulated institutions in combating money laundering and terrorist financing should lead concerned institutions to maintain reliable and properly populated customer databases, facilitating the submission of declarations to the Risk Repository.

In general, I draw the attention of credit institutions to compliance with the aforementioned texts and the terms of Article 36 of the annex to the Convention of January 17, 1992 on harmonization of banking regulation in Central African States, urging them to take all necessary measures to ensure accurate declarations to the Risk Repository and thereby avoid exposure to sanctions provided for in Article 46 of the annex to said Convention.

I kindly invite you to communicate this letter to all members of your Association.

Please accept, Mr. President, the assurance of my distinguished consideration.

[Signature] Rigobert Roger ANDELY

[Signature] Philibert ANDZEMBE