Regulatory Alerts2007-11-02
Notice No. 01/2007/RB of November 2, 2007 to Banks and Financial Institutions Regarding the Increase in Minimum Share Capital of Credit Institutions of the West African Monetary Union (UMOA)
The UMOA Council of Ministers, through Notice No. 01/2007/RB issued on November 2, 2007, mandates an increase in the minimum share capital for banks and financial institutions to 10 billion and 3 billion respectively. Active institutions must meet the initial phased thresholds of 5 billion for banks and 1 billion for financial institutions by December 31, 2010, while submitting a compliant action plan and timeline to the Finance Minister, BCEAO, and UMOA Banking Commission within six months of January 1, 2008. The final application date for the higher capital thresholds will be determined upon completion of this initial phase, ensuring a robust financial system that effectively supports economic development across UMOA member states.
NOTICE No. 01/2007/RB OF NOVEMBER 2, 2007 TO BANKS AND FINANCIAL INSTITUTIONS REGARDING THE INCREASE IN MINIMUM SHARE CAPITAL OF CREDIT INSTITUTIONS OF THE WEST AFRICAN MONETARY UNION (UMOA)
The Union's Council of Ministers decided, during its ordinary session on September 17, 2007, to raise the minimum share capital applicable to banks and financial institutions of the West African Monetary Union (UMOA) to 10 billion and 3 billion, respectively.
This measure aligns with the objective of promoting a sound and robust banking and financial system, capable of effectively contributing to financing the economic development of UMOA member states.
In application of this decision, it is specified that: the minimum share capital is increased, in a first phase, to 5 billion for banks and to 1 billion for financial institutions, effective January 1, 2008. Active banks and financial institutions must comply with these new thresholds by December 31, 2010 at the latest; the new thresholds apply to licensing applications submitted as banks or financial institutions from the date of entry into force of this measure; already licensed banks and financial institutions are required to submit to the Minister in charge of Finance, the BCEAO, and the UMOA Banking Commission, within six (6) months from January 1, 2008, an action plan accompanied by a timeline, indicating the measures to be taken by management during this first phase to comply, where applicable, with the rules on minimum share capital, representation, and use of minimum capital; the application date for the thresholds of 10 billion and 3 billion, respectively, for banks and financial institutions, will be announced at the end of the first phase.
This notice shall be notified to banks and financial institutions and published wherever necessary.
Done in Dakar, on November 2, 2007 The Governor Damo Justin BARO