Circular 123 on Minimum Share Capital Rules

Bank of the Republic of Haiti CIRCULAR No. 123

TO FINANCIAL INSTITUTIONS

In application of Articles 42 and 158 of the law of May 14, 2012, concerning banks and other financial institutions, the financial institutions designated below are required to comply with the minimum share capital rules defined by this circular.

1. Amount of Minimum Share Capital

The minimum share capital required to be approved in one of the following categories of financial institutions is set at the amounts below:

• Bank: 200 million gourdes;
• Development finance company, leasing company, credit card company: 100 million gourdes;
• Investment promotion company: 100 million gourdes
• Factoring company, trust company: 50 million gourdes
• Money transfer house: 15 million gourdes

This requirement applies to the amount of paid-up share capital.

The BRH reserves the right to subordinate the approval of an institution to the provision of capital higher than the amount set for the category for which approval is sought, if the anticipated risk profile is deemed high or to better guarantee future compliance with capital adequacy standards based on the financial statements and prudential ratios projected in the business plan for three (3) years to be produced by the promoters.

2. Permanent Representation of Minimum Share Capital

The minimum share capital required upon the approval of a financial institution must be represented permanently.

The minimum share capital is considered represented when the amount of stable equity is equal to or greater than the amount set in Section 1, after deduction of asset elements with the character of non-values.

The equity items to be retained for the calculation consist of the following elements:

• Share capital,
• Share premium,
• Legal reserve.

The asset elements to be deducted are as follows:

• Unpaid capital,
• Treasury shares,
• Carried forward losses from prior years,
• Pending losses,
• Intangible assets including goodwill or going concern value.

3. Compliance Reports

Financial institutions must send the compliance report prepared according to the model defined in the annex to the BRH, no later than fifteen (15) days after the end of the quarter, attaching it to the quarterly financial statements to be transmitted to the same date to the BRH.

4. Sanctions

In the event of non-compliance with the obligations defined in this circular, the financial institutions concerned are subject to the following sanctions:

a) Reliability of information

At all times, the amounts declared in the compliance report transmitted to the BRH must be those appearing in the accounting books of the financial institution.

Failing to comply with this provision, the BRH may, after an investigation into the circumstances and nature of the violation, impose a penalty of 10% of the difference between the amounts declared in said report and the amounts appearing in the accounting books.

b) Late submission

Failing to provide, within the deadline, the compliance report required by this circular, the financial institution concerned is subject to a penalty of fifty thousand gourdes (HTG 50,000.00) per day of infraction. The penalty period extends from the day of the infraction until the day when the information is made available to the BRH.

Any penalty will be deducted from the balance of one of the accounts of the institution held at the BRH. In the absence of the institution concerned holding an account at the BRH, payment must be made by a cashier's check payable to the Bank of the Republic of Haiti, no later than five (5) business days after receipt of the notification of the penalty amount. In the event of non-payment within the deadlines, additional penalties of two thousand five hundred gourdes (HTG 2,500.00) per day of delay will be applied.

5. Transitional Provisions

Financial institutions that do not present the minimum share capital required by this circular on the date of its entry into force have a period of two (2) years to comply with these provisions, i.e., no later than February 1, 2024. Any distribution of dividends to them is prohibited until the effective regularization of their situation.

6. Entry into Force

The provisions of this circular enter into force on February 1, 2022.

Port-au-Prince, January 13, 2022

Jean Baden Dubois Governor

Annex: Report on the control of the representation of minimum share capital

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ANNEX Circular No. 123

Financial institution: __________________________ As of: (dd/mm/yyyy)____

REPRESENTATION OF MINIMUM SHARE CAPITAL

QUARTERLY REPORT (individual basis)

(In thousands of gourdes)

STABLE EQUITY
Share capital
Share premium
Legal reserve
	SUBTOTAL I	A
Unpaid capital
Treasury shares
Carried forward losses from prior years
Pending losses
Intangible assets including goodwill or going concern value
	SUBTOTAL II	B
REQUIRED MINIMUM CAPITAL
REPRESENTATION OF MINIMUM SHARE CAPITAL (A-B)