COBAC Circular LC/33 on Banking Conditions

COMMISSION BANCAIRE OF CENTRAL AFRICA

General Secretariat
P.O. Box 1917 - Yaoundé
Republic of Cameroon

TELEX - BANETAC 8343 KN
Tel. (237) 223.40.30
(237) 223.40.60
Fax. (237) 223.82.16
E-mail: ccbac@camnet.cm

Yaoundé, September 11, 2007

To the General Managers of CEMAC Banks

LC/ 33

Subject: Banking Conditions

Dear General Managers,

It has come to my attention that several CEMAC banks are making unjustified deductions from their clients' accounts through the unilateral application of certain provisions, in blatant violation of the contractual terms established upon account opening and the ethical and professional rules governing the banking sector.

I hereby remind you of the essence of the statement by the Governor of BEAC, President of COBAC, during the seminar on Basel II and governance in credit institutions, held in Libreville on October 30 and 31, 2006, which exhorted banks to cease making undue deductions from clients' accounts in order to improve their operating statements and refocus on lending, the main object of their activity.

The reciprocal obligations between a credit institution and its clients are subject to agreements binding both parties, in accordance with Article 10, paragraph 2 of Regulation No. 02/03/CEMAC/UMAC/CM relating to payment systems, instruments, and incidents. Consequently, any modification to the provisions regarding these account agreements must be made with the explicit consent of both parties.

Failure to comply with the aforementioned requirements by CEMAC credit institutions exposes them to risks associated with reporting violations of established contractual terms to the competent courts.

Consequently, I urge you to scrupulously honor the provisions of the account agreements established with your clients upon account opening. I also invite you to comply with the prevailing laws and regulations governing contractual modifications. You are therefore requested to cancel all measures already taken that contravene the aforementioned requirements.

Please accept, Gentlemen General Managers, the assurances of my distinguished consideration.

The General Secretary,

(Signature)

MAHAMAT MUSTAPHA