Regulatory Alerts2000-04-03
COBAC Regulation R-96/01 on the Credit Portfolio Structure of Credit Institutions
The Central African Monetary Commission (COBAC) issued Regulation R-96/01 to mandate that credit institutions maintain a minimum 35% credit portfolio structure ratio, progressively increasing to 45% by July 1998 and 55% by July 1999. The rule defines the numerator as BEAC-eligible treasury refinancing and irrevocable financial institution refinancing, while the denominator comprises long-, medium-, and short-term customer credits, net doubtful claims, and customer debit accounts. Non-compliant institutions face injunctions and disciplinary sanctions under the 1990 Convention, with COBAC retaining authority to grant temporary derogations and enforce monthly or quarterly reporting.
CENTRAL AFRICAN MONETARY COMMISSION COBAC REGULATION R-96/01 ON THE CREDIT PORTFOLIO STRUCTURE OF CREDIT INSTITUTIONS
The Central African Monetary Commission, meeting in ordinary session on June 4, 1996, in Yaoundé, Having regard to the Convention of October 16, 1990 establishing a Central African Monetary Commission; Having regard to Article 9, paragraph 1 of the annex to the Convention of October 16, 1990; RESOLVES
Article 1. Credit institutions covered by the Convention of October 16, 1990 are permanently required to maintain a minimum ratio between their treasury risks refinanced by the Issuing Institute and/or mobilizable with a financial institution, subject to the agreement of the Central African Monetary Commission, and the total gross credits of the same nature granted to customers, known as the "credit portfolio structure ratio".
Article 2. Commitments on credit institutions are not subject to the rule defined in Article 1 above.
Article 3. The numerator of the credit portfolio structure ratio includes:
- classification and mobilization agreements issued by the BEAC for eligibility to the different compartments of the money market;
- irrevocable refinancing obtained from financial institutions, subject to the prior agreement of the Central African Monetary Commission.
Article 4. The denominator of the credit portfolio structure ratio includes:
- long, medium and short-term credits excluding the outstanding amount of moratorium claims on the State as at the date of signature of this regulation;
- doubtful, contentious and disputed claims reduced by the related provisions set aside;
- customer debit accounts.
Article 5. Subjected institutions must, at all times, present a credit portfolio structure ratio of at least 35%. This limit will be increased to 45% from July 1, 1998, and to 55% as of July 1, 1999.
Article 6. For the application of the above article, a monthly declaration for banks and a quarterly declaration for financial institutions are submitted to the Secretariat of the Central African Monetary Commission in the forms defined by an instruction from the Central African Monetary Commission.
Article 7. In case of non-compliance with the standards set out in Article 5 of this regulation, the Central African Monetary Commission may issue an injunction requiring, inter alia, that within a specified period, all measures necessary to bring the concerned institution into compliance with these standards are taken. If a credit institution fails to comply with an injunction or disregards a warning, or breaches the regulation, the Central African Monetary Commission may impose one or more of the disciplinary sanctions provided for in Article 13 of the Convention of October 16, 1990.
Article 8. The Central African Monetary Commission may authorize an institution to temporarily derogate from the provisions of this regulation by granting it a period to regularize its situation.
Article 9. This regulation enters into force on July 1, 1997.
Article 10. The Secretary General of COBAC is responsible for the implementation of this regulation.
Done at Yaoundé on June 4, 1996 For the Central African Monetary Commission, The President, Jean-Félix MAMALEPOT