CENTRAL BANK OF THE COMOROS

REGULATION No. 007/2015/BCC/DSBR

RELATING TO MANDATORY RESERVES ON DEPOSITS FROM FINANCIAL INSTITUTIONS RECEIVING PUBLIC FUNDS IN APPLICATION OF LAW 13-003/AU

Having regard to Law 80-08 of June 26, 1980, relating to currency and the role of the Central Bank of the Comoros in the control of banks and financial establishments, credit, and foreign exchange;

Having regard to Law 13-003/AU regulating banking and financial activities, in its articles 26, 29, 46, and 103;

Having regard to Law 12-008/AU of June 28, 2012, on the fight against money laundering and the financing of terrorism;

Having regard to Law 12-011/AU of June 26, 2012, on the regulation and organization of leasing;

THE GOVERNOR OF THE CENTRAL BANK OF THE COMOROS;

Sets the rules for calculating mandatory reserves on deposits in application of Law 13-003/AU.

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Article 1. Financial Institutions that receive public funds are required to deposit into one or more accounts opened at the Central Bank of the Comoros an amount of mandatory reserves, the calculation methods, rates, periodicity, and declaration model of which are fixed by circular of the Central Bank of the Comoros.

Article 2. The base used for calculating mandatory reserves consists of the total amount of customer deposits and issued debt securities. The amount of these liabilities is calculated based on the figures appearing in the accounting statement submitted monthly by the financial institutions receiving public funds preceding the reserve composition period. The amount of the base consists of the following accounting balances:

• deposit accounts,
• current accounts,
• postal current accounts,
• special accounts,

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Place de France. BP 405 MORONI TEL: (269) 773 18 14 - (269) 773 10 02 – FAX: (269) 773 03 49 E-mail: secretariat@banque-comores.km Site: www.banque-comores.km

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• savings passbook accounts,
• term accounts,
• savings accounts,
• other customer deposits,
• issued debt securities.

Article 3. The Central Bank of the Comoros fixes by Circular the mandatory reserve rate applied to all liabilities included in the reserve base.

Article 4. The amount of mandatory reserves to be constituted is determined according to the model attached by applying the reserve rate to the total base.

Article 5. The composition period is one month. It begins on the twentieth calendar day of each month N following the date of the statement of the situation and ends on the nineteenth calendar day of month N+1 following.

Article 6. The subject financial institution must constitute its mandatory reserves in an account opened at the Central Bank of the Comoros.

An Union formed by Decentralized Financial Institutions may constitute these reserves on behalf of all or part of its members.

A subject fulfills its obligation to constitute mandatory reserves when the average end-of-day balance of its reserve accounts over the composition period is at least equal to the amount of mandatory reserves defined for the period in question.

Article 7. The Central Bank of the Comoros may verify at any time the accuracy and quality of the information provided to it to establish the amount of mandatory reserves.

Article 8. When a subject financial institution fails to fulfill its declaration obligation provided for in Article 1, transmits inaccurate information, or omits submitting the periodic accounting statements allowing verification of the declared base, the remuneration of reserves may be suspended until the required documents are produced.

When the subject financial institution does not respond to regularization requests from the Central Bank of the Comoros or in cases of repeated omissions of its declarative obligations, the Central Bank of the Comoros may decide to reduce the remuneration rate of its mandatory reserves by an additional 1/8th for the period.

Article 9. When a subject fails totally or partially to fulfill its reserve constitution obligations provided for in Article 1, the Central Bank of the Comoros applies a sanction whose amount is calculated on the shortfall of mandatory reserves observed by applying a penalty rate fixed by Circular of the Central Bank of the Comoros.

Article 10. In the event of serious or persistent breaches of the provisions of this Regulation, any subject institution faces the application by the Central Bank of the Comoros of disciplinary and/or pecuniary sanctions provided for by the texts applicable to it.

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Place de France. BP 405 MORONI TEL: (269) 773 18 14 - (269) 773 10 02 – FAX: (269) 773 03 49 E-mail: secretariat@banque-comores.km Site: www.banque-comores.km

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Article 11. The penalty rate applicable on reserve shortfalls is set at the average monthly EONIA rate observed during the calendar month including the first day of the reserve composition period, increased by two points.

Article 12. This Regulation cancels and replaces Instruction No. 013/2004/COB and Circular No. 008/2004/COB.

It enters into force as of its date of signature.

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Moroni, January 28, 2015

Mzé Abdou Mohamed Chanfiou

THE GOVERNOR

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Place de France. BP 405 MORONI TEL: (269) 773 18 14 - (269) 773 10 02 – FAX: (269) 773 03 49 E-mail: secretariat@banque-comores.km Site: www.banque-comores.km