Regulatory Alerts2024-09-01
Circular No. 01/2023 on the Payment Procedures for Premiums, Indemnities and Other Fees, Issued Pursuant to Regulation No. 003/2023 Establishing the Deposit and Resolution Guarantee Fund
The Bank of the Republic of Burundi issued Circular No. 01/2023 to establish payment procedures for premiums, indemnities, and other fees owed by credit institutions and microfinance institutions to the Deposit and Resolution Guarantee Fund (FGDR). The regulation mandates an annual premium of 0.2% on average eligible monthly deposits, a complementary 0.05% premium for non-performing loans exceeding sector averages, and an entry fee formula for new members, alongside a 0.5% daily late payment penalty. Additionally, it sets the FGDR's coverage limit at 3,000,000 Burundi Francs per depositor, requires the first 2024-related contribution to be paid by March 31, 2025, and specifies that the circular takes effect upon publication in the Official Bulletin and on the central bank's website.
BANQUE DE LA REPUBLIQUE DU BURUNDI
LE GOUVERNEUR
CIRCULAIRE N°01/2023 ON THE PAYMENT PROCEDURES FOR PREMIUMS, INDEMNITIES AND OTHER FEES, ISSUED PURSUANT TO REGULATION N°003/2023 ESTABLISHING, MISSIONS, ORGANIZATION AND OPERATION OF THE DEPOSIT AND RESOLUTION GUARANTEE FUND
Pursuant to Law No. 1/34 dated December 2, 2008 establishing the Statutes of the Bank of the Republic of Burundi;
Pursuant to Law No. 1/17 dated August 22, 2017 governing banking activities;
Pursuant to Regulation No. 003/2023 establishing, missions, organization and operation of the Deposit and Resolution Guarantee Fund;
The Bank of the Republic of Burundi, hereinafter referred to as the "Central Bank", hereby issues:
Article 1: Object and Scope
This circular aims to establish the payment procedures for premiums, indemnities and other fees to the Deposit and Resolution Guarantee Fund, hereinafter referred to as "FGDR", by credit institutions and microfinance institutions (MFIs) that collect public deposits.
Article 2: Summary Table of Premiums
The table below indicates the premium contribution procedures required by the FGDR from credit institutions and microfinance institutions.
| Description | Applicable Rate/Fee |
|---|---|
| Annual Premium | 0.2% of the average monthly volume of eligible deposits from the previous financial year |
| Complementary Premium | 0.05% of non-performing loans when a credit institution or microfinance institution shows a portfolio deterioration rate exceeding the respective annual sector average. |
| Entry Premium for New Affiliated Institution (New Member) | Cc=20%(Di/TD)*TC<br>Cc : Entry premium for the new affiliated institution |
Di: Average monthly volume of eligible deposits from the previous financial year of the new affiliated institution
TD: Average monthly volume of eligible deposits from the previous financial year of all affiliated institutions of the same category (credit institution or MFI).
TC: Total contributions actually paid to the FGDR by other affiliated institutions of the same category up to the previous financial year (credit institution or MFI).
Late payment penalty for non-payment of premiums: 0.5% of the unpaid premium amount for each day of delay beyond the notified grace period.
Article 3: FGDR Coverage Limit
In the course of executing its indemnification mission entrusted to the FGDR, the Bank of the Republic of Burundi, based on the resources of the FGDR, reimburses eligible deposits up to a coverage limit of three million Burundi Francs (3,000,000 BIF) for each depositor or beneficiary of any affiliated institution concerned. From this amount is deducted any matured obligation on the date of declaration of liquidation.
Article 4: Payment of the First Contribution to the FGDR
The first premium contribution relating to the 2024 financial year shall be paid to the Deposit and Resolution Guarantee Fund during the 2025 financial year and no later than March 31, 2025.
Article 5: Entry into Force
This circular enters into force on the day of its publication in the Official Bulletin of Burundi and on the website of the Bank of the Republic of Burundi.
Done in Bujumbura, on 28/12/2023
Edouard Normand BIGENDAKO
Governor.
1, Avenue du Gouvernement - B.P. 705 BUJUMBURA - Tel: (257) 22-20 40 00 / 22 22 27 44 - Fax: (257) 223128 - Email: brb@brb.bi