Regulatory Alerts2018-01-01
Central Bank of Tunisia Circular No. 2018-10 to Banks dated November 1, 2018
The Central Bank of Tunisia issued Circular No. 2018-10 to establish a mandatory "Credits/Deposits" ratio for banks, requiring those exceeding 120% at quarter-end to reduce it by the following quarter according to tiered thresholds. Banks must submit quarterly ratio statements and, if non-compliant, present an action plan within 10 days or face fines calculated on the excess credit amount and duration. The circular amends existing prudential reporting frameworks by adding declaration RPLT560 and takes effect based on the September 2018 quarter-end ratio.
Tunis, November 1, 2018 CIRCULAR TO BANKS NO. 2018-10 Subject: "Credits/Deposits" Ratio
The Governor of the Central Bank of Tunisia, Having regard to Law No. 2016-35 of April 25, 2016 establishing the status of the Central Bank of Tunisia; Having regard to Law No. 2016-48 of July 11, 2016 on banks and financial institutions; Having regard to Circular No. 2017-06 of July 31, 2017 on accounting, prudential and statistical reporting to the Central Bank of Tunisia; Having regard to Circular No. 2006-19 of November 28, 2006 on internal control; Having regard to Opinion No. 08-2018 of the Compliance Control Committee dated October 19, 2018, as provided for in Article 42 of Law No. 2016-35 of April 25, 2016 establishing the status of the Central Bank of Tunisia.
Decides:
Article 1 This circular aims to establish a "Credits/Deposits" ratio, as defined by the provisions of Article 3 below, ensuring better alignment between resources and uses and managing maturity transformation risk.
Article 2 Banks whose "Credits/Deposits" ratio exceeds 120% at the end of a given quarter must take necessary measures to reduce their ratio by the end of the following quarter, under the following conditions:
| Quarterly Ratio | Reduction to Apply |
|---|---|
| Credits/Deposits ≥ 122% | 2% |
| 120% < Credits/Deposits < 122% | Percentage required to bring the following quarter's ratio down to 120% |
Article 3 The "Credits/Deposits" ratio is defined as the ratio between the following numerator and denominator:
| Numerator | Denominator |
|---|---|
| Gross outstanding customer credits in dinars | Sum of the following elements: <br> - Outstanding deposits and customer balances in dinars after deduction of other amounts due to customers, <br> - Outstanding deposit certificates, <br> - Any other form of loans in dinars and foreign currencies, excluding bond loans and money market loans. |
Banks must submit their "Credits/Deposits" ratio statement to the Central Bank of Tunisia in accordance with Annex 1 of this circular.
Article 4 Any bank failing to comply with Article 2 of this circular for a quarter must submit to the Central Bank of Tunisia, no later than 10 days after the declaration for that quarter, an action plan detailing measures to correct its position regarding the regulatory ratio set forth in Article 2.
Notwithstanding the provisions of paragraph 1 of this article and in application of Articles 169 and 170 of Law No. 2016-48, any bank exceeding the provisions of Article 2 is subject to a fine calculated according to the following formula: AT = (ET * 1% * nT) / 360 AT: Fine amount, ET: Amount of credits exceeding the target quarterly ratio, nT: Number of days in the quarter considered.
Article 5 Annex I to Circular No. 2017-06 on accounting, prudential and statistical reporting to the Central Bank of Tunisia is amended by adding declaration RPLT560 "Credits/Deposits Ratio" to sub-domain 2 "Liquidity Risk" of domain 3 "Prudential Reporting", in accordance with Annex 2 to this circular.
Article 6 The provisions of this circular take effect starting from the last quarter of 2018, based on the "Credits/Deposits" ratio at the end of September 2018.
THE GOVERNOR Marouane EL ABASSI
Annex 1 to Circular No. 2018-10 Bank: Calculation elements of the "Credits/Deposits" ratio as at ....... (In thousands of dinars unless otherwise stated)
| Code | Label | Quarter T-1 | Quarter T |
|---|---|---|---|
| AC030000000000 | Customer credits in dinars (1) | ||
| PA030000000000 | Deposits and customer balances in dinars (2) | ||
| PA030900000000 | Other amounts due to customers in dinars (3) | ||
| PA040101000000 | Deposit certificates (4) | ||
| PA040300000000 | Special resources in dinars and foreign currencies (5) | ||
| PA020102010900 | Other loans of non-resident banks established in Tunisia in dinars and foreign currencies (6) | ||
| PA020102020900 | Other loans of non-resident banks established abroad in dinars and foreign currencies (7) | ||
| PA020101090000 | Other loans of resident banks in dinars and foreign currencies (8) | ||
| PA040209000000 | Other loans contracted in dinars and foreign currencies (9) | ||
| Denominator (10)=(2)-(3)+(4)+(5)+(6)+(7)+(8)+(9) | |||
| "Credits/Deposits" Ratio (11)=(1)/(10) (%) | (12) | (13) | |
| Target quarterly ratio (%) | (14) | ||
| Excess of credits ((13)-(14))*(10) |
Annex 2 to Circular No. 2018-10 amending Annex I to Circular No. 2017-06 on accounting, prudential and statistical reporting to the Central Bank of Tunisia
| Domain | Declaration Code | Declaration Title | EA | Declaration Frequency | Maximum Transmission Deadline | Format /Transmission |
|---|---|---|---|---|---|---|
| 3-Prudential Reporting | SD 2-Liquidity Risk | RPLM47 Liquidity Ratio (Circular 2014-14) | BR | Monthly | DR+10j | XML |
| RPLA510 Breakdown of assets and liabilities in dinar by remaining maturity | BR | Annual | DR+45 j | XML | ||
| RPLA520 Breakdown of assets and liabilities in US Dollar by remaining maturity | BR+BNR | Annual | DR+45 j | XML | ||
| RPLA530 Breakdown of assets and liabilities in Euro by remaining maturity | BR+BNR | Annual | DR+45 j | XML | ||
| RPLT540 Concentration on the top 50 depositors in dinar | BR | Quarterly | DR+30j | XML | ||
| RPLT550 Concentration on the top 50 depositors all currencies combined | BR+BNR | Quarterly | DR+30j | XML | ||
| RPLT560 Credits/Deposits Ratio (Circular 2018-……) | BR | Quarterly | DR+30j | XML |