Regulatory Decision No. 24-2020/BCC/DSBR on Pecuniary Sanctions for Financial Institutions for Failure to Meet Reporting Obligations to the BCC

BANQUE CENTRALE DES COMORES

REGULATORY DECISION NO. 24-2020/BCC/DSBR

Regarding pecuniary sanctions applicable to financial institutions in case of failure to meet reporting obligations vis-à-vis the BCC

Having regard to the framework law no. 80-08 of May 3, 1980, relating to currency and the role of the Central Bank of the Comoros in the control of Banks and Financial Institutions;

Having regard to the statutes of the Central Bank of the Comoros;

Having regard to the banking law no. 13-003/AU of June 12, 2013, in its articles 26, 29, 44, 45, 46 to 52, 64, 65 and 66;

Having regard to law no. 20-005/AU on payment services and payment service providers;

Having regard to decree no. 15-026/PR regarding payment systems, means and incidents, in its articles 184 to 210;

Having regard to regulation no. 006/2015/BCC/DSBR relating to periodic accounting situations to be submitted by credit institutions;

Having regard to circular no. 001/2017/BCC/DSBR relating to the submission of periodic accounting situations by credit institutions in application of regulation no. 006/2015/BCC/DSBR;

Having regard to regulation no. 002/2015/BCC/DSBR relating to the definition of own funds of credit institutions;

Having regard to regulation no. 003/2015/BCC/DSBR relating to capital requirements for the coverage of credit and off-balance sheet risks, operational risks and fixed assets;

Having regard to regulation no. 004/2015/BCC/DSBR relating to the segmentation of risks and the control of large exposures of credit institutions;

Having regard to regulation no. 005/2015/BCC/DSBR relating to the classification and provisioning of claims of credit institutions;

Having regard to regulation no. 007/2015/BCC/DSBR relating to the mandatory reserves of financial institutions receiving deposits from the public;

Having regard to regulation no. 10/2015/BCC/DSBR relating to interbank operations carried out by credit institutions;

Having regard to regulation no. 011/2015/BCC/DSBR relating to internal management control and risk management of credit institutions;

Having regard to regulation no. 13/2015/BCC/DSBR relating to the functioning of the CdRIP (Credit Risk and Payment Incidents Central);

Having regard to regulation no. 18/2015/BCC/DSBR approving statutory auditors of financial institutions;

Having regard to circular no. 001/2017/BCC/DSBR relating to the submission of periodic accounting situations by credit institutions in application of regulation no. 006/2015/BCC/DSBR;

Having regard to circular letter no. 002/2018/BCC/DSBR relating to the communication of corrected reporting statements after audit;

Having regard to reporting annexes 2 and 3 relating to mobile money operations;

Conscious that failures and delays by financial institutions subject to reporting obligations affect the consolidation of data for the entire Comorian banking and financial system and prevent the Central Bank of the Comoros from effectively carrying out the missions assigned by regulation and from respecting its commitments to its international partners, and that it is necessary to guard against this reputational risk;

Considering that non-compliance with the deadlines set by regulation is harmful and is above all prejudicial to the Comorian financial system and the national economy in general;

Considering that financial institutions are required to declare various statements and reports to the Central Bank of the Comoros according to the periodicities defined in their texts taken in application of the banking law;

Resolved to preserve a harmonious functioning of the Comorian banking and financial system;

THE GOVERNOR OF THE CENTRAL BANK OF THE COMOROS:

Sets the amounts of late penalties regarding the transmission of documents and information:

Article 1: Purpose

The omission of a periodic status declaration or its late transmission results in pecuniary sanctions in the form of a daily penalty against the delayed financial institution.

Financial institutions that have not provided the Central Bank of the Comoros with the documents and information necessary for the exercise of their attributions, as provided for by banking law no. 13-003/AU, law no. 20-005/AU on payment services and payment service providers, implementing regulations, and any legal and regulatory provision in force, are subject to late penalties as fixed by the following provisions.

Article 2: Documents and Information

Non-compliance with regulatory deadlines in the transmission of statements and reports, various reporting obligations, and declarations in the Credit Risk and Payment Incidents Central (CdRIP) will result in the pecuniary sanctions mentioned below.

Article 3: Amounts of Penalties

Financial institutions that have not satisfied, within the prescribed deadlines, the obligations arising from the provisions referred to in Article 2 above, as well as generally by laws and regulations, incur the following penalties, per day of delay:

• Twenty-five thousand (25,000 KMF) Comorian francs, during the first fifteen (15) days;

• Fifty thousand (50,000 KMF) Comorian francs, during the following fifteen (15) days;

• One hundred fifty thousand (150,000 KMF) Comorian francs, beyond that;

• One hundred fifty thousand (150,000 KMF) Comorian francs, from the 11th of the following month until the date where the status declaration is made for any late declaration of credit statuses in the Credit Risk and Payment Incidents Central (CdRIP).

Any financial institution that has not declared payment incidents, regularization of payment incidents for checks, and account openings, and/or generally has not observed its obligations vis-à-vis the Credit Risk and Payment Incidents Central (CdRIP) and under the conditions provided for in articles 184 to 208 of decree no. 15-026/PR, regarding payment systems, means and incidents, and regulation no. 13/2015/BCC/DSBR relating to the functioning of the Credit Risk and Payment Incidents Central (CdRIP), incurs a penalty of up to three million Comorian francs (3,000,000 KMF).

Article 4: Calculation of Penalties

The late penalty is due three (03) days after the receipt of the formal notice sent by the Central Bank to the financial institution, it being understood that this formal notice may be sent to the establishment in paper form or by electronic means.

The calculation of penalties is performed monthly by the Central Bank of the Comoros.

Article 5: Recovery of Penalties

The sums corresponding to late penalties are recovered, on behalf of the Central Bank of the Comoros, by automatic debit from the account of the financial institution opened in the books of the Central Bank, after the expiration of the deadline set in the formal notice, on the last business day of each month during which the delay is noted.

Article 6: Entry into Force

This regulation repeals and replaces all prior contrary provisions. It enters into force on October 1, 2020.

Moroni, September 10, 2020

The Governor, Dr. Younoussa IMANI