Decision No. 01-11-FGD-CD on the Internal Regulations of the Central African Deposit Guarantee Fund

COMMISSION BANCAIRE DE L'AFRIQUE CENTRALE FONDS DE GARANTIE DES DEPOTS COMITE DE DIRECTION DECISION N° 01-11-FGD-CD ON THE INTERNAL REGULATIONS OF THE CENTRAL AFRICAN DEPOSIT GUARANTEE FUND

Having regard to Regulation No. 01/09/CEMAC/UMAC/COBAC establishing the Central African Deposit Guarantee Fund; Having regard to COBAC Regulation R-2009/03 on the organization and functioning of the Central African Deposit Guarantee Fund; In its session held on 21 February 2011 in Yaoundé;

The Central African Deposit Guarantee Fund, abbreviated FOGADAC, is a public establishment of sub-regional scope with legal personality and financial autonomy. The Fund's operating rules result from the provisions of Regulation No. 01/09/CEMAC/UMAC/COBAC establishing the Central African Deposit Guarantee Fund, COBAC Regulation R-2009/03 on the organization and functioning of the Fund, as well as the texts adopted for their operation, including this Internal Regulation. This Internal Regulation specifies the organizational and operational procedures of the Central African Deposit Guarantee Fund. The Central African Deposit Guarantee Fund has the following objectives:

• to compensate savers of a credit institution in case of unavailability of their deposits or all other refundable funds;
• to provide assistance to a credit institution whose situation suggests, in the near future, a total or partial unavailability of depositors' funds. The Central African Deposit Guarantee Fund carries out any operation necessary or useful to achieve its objectives.

[Page 1/8] The Fund's headquarters are located within the General Secretariat of the Central African Banking Commission (COBAC). The Management Committee comprises:

• the Governor of the Bank of Central African States, as President, or, in his absence, the Vice-Governor as Deputy;
• where applicable, the monetary authority of the State in whose favor the Management Committee decides on an intervention. The Management Committee may validly deliberate only if at least half of its members are present or represented. When this quorum is not met, the President of the Management Committee proceeds to a new summons of members within a reasonable time, with no quorum condition then required. The General Secretary of the Central African Banking Commission and the Permanent Secretary of the Fund participate in the Management Committee meetings. The Permanent Secretary reports on matters inscribed on the agenda of the Fund's meetings. The Management Committee meets at least twice a year, at the Fund's registered office or any other location. An attendance register is drawn up for each meeting. The Management Committee may be convened in case of urgency by the President or if members representing at least two-thirds of the Committee so request. Members of the Management Committee are summoned by any means, at least fifteen days before the meeting date, except in cases of urgency or when called upon to rule on a preventive intervention proposal.

Unless otherwise provided by this Internal Regulation, decisions of the Management Committee are taken by a simple majority of members present or represented. In case of an equal number of votes cast, the President's vote is decisive. Extracts from these minutes are signed by the President of the Management Committee or the Permanent Secretary of the Fund.

TITLE III - ATTRIBUTES OF THE MANAGEMENT COMMITTEE AND DECISION-MAKING PROCEDURES The Management Committee: a) defines the Fund's general policy; b) decides on the compensation procedures for depositors; c) rules on the Fund's interventions in CEMAC States; d) examines amicable appeals regarding compensation; e) defines the organizational and operational procedures of the Permanent Secretariat; f) establishes the Fund's budget upon proposal by the Permanent Secretariat; g) adopts, upon proposal by the Permanent Secretariat, the accounting rules governing the Fund; h) sets the amount of the entry fee for new participants in the Fund; i) exercises permanent oversight of the Fund's management. To this end, it may at any time request documents it deems necessary to fulfill its mission, notably the Fund's balance sheet, income statement, and a quarterly summary report of the Fund's status; j) verifies, controls, and approves the annual accounts of the Fund established by the Permanent Secretariat within a period not exceeding three (03) months from the close of the financial year.

By a two-thirds (2/3) majority of votes cast, the Management Committee: a) adopts the Internal and Financial Regulations of the Fund; b) appoints and dismisses the Permanent Secretary of the Fund upon proposal by the COBAC General Secretary; c) appoints and dismisses the Fund's statutory auditor upon the conforming opinion of the Banking Commission; d) issues its conforming opinion for the designation of other members of the Permanent Secretariat; e) authorizes, upon proposal by the Permanent Secretariat, the initiation of liability actions provided for in Article 25 of the aforementioned CEMAC Regulation; f) designates within its ranks any committee it deems necessary for the study of any subject falling within its competence; g) grants any delegation of powers for the execution of its decisions; h) authorizes, upon proposal by the Permanent Secretariat, the signing of agreements between the Fund and natural or legal persons, entities, or national, regional, or international institutions.

Deliberations concerning the conditions and procedures for:

• using or levying the Fund's resources to carry out compensations;
• calling for supplementary contributions from credit institutions either to cover all Fund interventions or to restore the Fund's intervention capacity;
• calling on State guarantees in the territory where the concerned institution is located;
• suspending contributions when the Fund's resources reach a level deemed satisfactory by the Management Committee, upon the Banking Commission's opinion; are taken by a majority of at least three-quarters (3/4) of the votes of members present or represented.

By unanimity of its members, the Management Committee: a) may, upon the conforming opinion of COBAC, review the amount of the minimum contribution of credit institutions not engaged in deposit collection; b) may decide, upon the conforming opinion of the Banking Commission issued within a specific compensation procedure, to adjust reimbursement amounts according to the Fund's intervention capacity. This adjustment may consist either in proportionally reducing compensations relative to the Fund's available funds, or in revising upward the compensation ceiling considering the size of the intervention reserve; c) rules, upon the conforming opinion of the Banking Commission, on changes to the procedures for determining the entry fee payable by new Fund participants; d) decides, based on the Permanent Secretariat's report, on preventive interventions proposed by the Banking Commission as well as their conditions and procedures; e) decides on the principle and procedures of supplementary contributions from credit institutions necessitated by insufficient system availability to meet a preventive intervention.

TITLE IV - STATUS AND ATTRIBUTES OF THE PERMANENT SECRETARIAT MEMBERS The day-to-day management of the Fund is ensured by a Permanent Secretary. He may be assisted by a Deputy. The Permanent Secretary and his Deputy are drawn from the staff of the BEAC made available to the General Secretariat of COBAC, under conditions proposed by the COBAC General Secretary and approved by the Management Committee. The Permanent Secretary is appointed by the Management Committee for a term of three (03) years, renewable once, upon proposal by the COBAC General Secretary.

By way of derogation from the provisions of paragraph 1 of Article 5 above, the appointment and dismissal of Permanent Secretariat members require the presence or representation of all Management Committee members. In case of resignation or incapacity of a Permanent Secretariat member, the replacing member is appointed under the same conditions, for the remainder of the replaced member's term. The Permanent Secretary and his Deputy, where applicable, receive an allowance the amount and procedures of which are fixed by the Management Committee upon proposal by the COBAC General Secretary. The Permanent Secretariat: a) has the broadest powers to act on behalf and for the account of the Guarantee Fund, within the limits of powers delegated to the Management Committee; b) represents the Guarantee Fund vis-à-vis third parties. It may appear in court both as defendant and plaintiff; c) submits to the Management Committee each quarter a report on the Fund's operation and quarterly accounts; d) establishes and presents to the Management Committee the Fund's annual accounts comprising a balance sheet and income statement; e) informs the President of the Management Committee, as soon as he becomes aware, of any potential preventive intervention proposal; f) prepares the report on any preventive intervention proposed by the Banking Commission; g) prepares the closing report of any compensation or preventive intervention by the Guarantee Fund; h) provides the secretariat for Management Committee meetings, reporting agenda items; i) calculates credit institutions' contributions and notifies them to the concerned parties; j) may authorize, in favor of a credit institution, the installment payment of annual contributions; k) informs depositors of the unavailability of deposits; l) verifies claims submitted for compensation; m) compensates depositors within the fixed deadlines; n) takes all useful measures to execute Management Committee decisions.

The Permanent Secretary prepares an annual report on the operation of the Guarantee Fund, which he presents to the Management Committee and makes available to the public.

The Permanent Secretary transmits a copy of the approved accounts to the UMAC Ministerial Committee. The Permanent Secretary may temporarily delegate his functions to his Deputy. He informs the President of the Management Committee thereof. Beneficiaries of eligible funds and other deposits are compensated according to the following procedures:

1. The Banking Commission establishes the unavailability of eligible deposits, notifies it to the Fund's Permanent Secretariat, and requests its intervention;
2. Receipt of the notification triggers the Fund's intervention procedure. This trigger is announced by a Permanent Secretariat notice published in the press;
3. Based on bank registers, the Fund's Permanent Secretariat establishes certificates of the amounts of claims or rights eligible for the compensation procedure, which the Fund bears;
4. These certificates are transmitted to clients by registered letter with acknowledgment of receipt or by any other means leaving a written record; they contain the details provided for in Article 40 of the aforementioned COBAC Regulation. Unless remarks or objections are made within fifteen (15) days after dispatch, the client must return the approved certificate within the same period and provide the account number in another credit institution, which will be credited with the compensation amount;
5. Upon expiration of the aforementioned period or upon receipt of confirmation of the certificate, the Guarantee Fund initiates the payment of depositors' compensation;
6. In the absence of an account number indication, the coordinates of the mandating bank responsible for paying covered deposits are communicated to depositors. The mandating bank opens accounts in the names of the concerned depositors for the covered amounts;
7. From the day of publication of the unavailability of deposits, depositors who have not been personally notified by the Fund have a period of two (02) months to assert their right to intervention;
8. Upon expiration of the aforementioned period, the Fund compensates other concerned depositors' beneficiaries;
9. The compensation deadline may be extended by a maximum of two prorogations, which cannot exceed four (04) months in total;
10. The decision to extend the compensation period must be published by the Permanent Secretariat;
11. The Fund's intervention results in the withdrawal of the institution's authorization, pronounced by the Banking Commission;
12. After payment, the Fund is subrogated to the rights of compensated depositors vis-à-vis the liquidator.

The Management Committee decides unanimously on preventive intervention upon proposal by the Banking Commission and after presentation of the conclusions of the report prepared following the audit mission mandated within the institution. a) The estimated cost of preventive intervention compared to the cost of curative intervention; b) Elements relating to shareholder or partner commitments or support that the institution may benefit from; c) The administration of the concerned credit institution; d) The possible transfer of the business and, more generally, the assets of the institution; e) The procedures for writing off losses by imputation on shareholders' participations; f) The procedures for shareholders waiving their preferential subscription rights; g) The triggering of liabilities; h) The estimated schedule for all operations related to such an intervention.

The report incorporates the Banking Commission's opinion on the conditions proposed by the Permanent Secretariat. The Management Committee, based on the report, may, if it decides on preventive intervention, modify the conditions proposed by the Permanent Secretariat. These are communicated to the Banking Commission. The Management Committee definitively establishes the Fund's intervention conditions after taking into account the Banking Commission's opinion thereon. The President of the Management Committee informs the Banking Commission thereof.

Article 21.- Duty of confidentiality of Management Committee and Permanent Secretary members Members of the Management Committee and the Permanent Secretariat, as well as any person authorized to act on behalf and for the account of the Fund, are bound by professional secrecy. Persons covered by the preceding article are prohibited from claiming their status to directly or indirectly benefit from any advantage whatsoever. Any difficulty arising from the interpretation or application of this Internal Regulation falls within the competence of the Management Committee. This Internal Regulation may be amended by the Management Committee either on its own initiative or upon request by half of its members, upon proposal by the Permanent Secretary, by a two-thirds majority of votes cast.

Mr. Lucas ABAGA NCHAMA, President; Messrs. Pascal REBILLARD, Christian ASSOSSOU, YOUNES EL MAS LOUMI, Claude AYO-IGUENDA, Joseph TINDJOU DJAMENI and KERIM MAHAMAT ALI, members.