Instruction No. 29 on the Activity of Banking Agents

BANQUE CENTRALE DU CONGO

THE GOVERNOR

INSTRUCTION NO. 29 TO CREDIT INSTITUTIONS AND MICROFINANCE INSTITUTIONS ON THE ACTIVITY OF BANKING AGENTS

The Central Bank of Congo,

Having regard to Law No. 005/2002 of May 7, 2002, relating to the constitution, organization, and functioning of the Central Bank of Congo, specifically Article 6;

Having regard to Law No. 003/2002 of February 2, 2002, relating to the activity and control of Credit Institutions, specifically Title II, Articles 6 and 7;

Having regard to Law No. 002/2002 of February 2, 2002, laying down provisions applicable to Savings and Credit Cooperatives, specifically Article 6;

Having regard to Law No. 11/020 of September 15, 2011, fixing the rules relating to the microfinance activity in the Democratic Republic of Congo, Article 21;

Decrees the regulatory provisions relating to the activity and control of banking agents.

CHAPTER 1: GENERAL PROVISIONS

Article 1:

This Instruction applies to Credit Institutions and Microfinance Institutions, hereinafter referred to as "subject entities".

Article 2:

A banking agent is a natural or legal person exercising a commercial activity who acts in the name and on behalf of the subject entity when carrying out banking operations, pursuant to a written contract.

The subject entity may authorize a legal person banking agent to subcontract its rights and obligations.

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Article 3:

The subject entity is authorized to offer, under its sole responsibility, banking services through a banking agent subject to the prior agreement of the Central Bank of Congo.

The authorization to use the network of banking agents is granted only once and for all.

Article 4:

The Central Bank of Congo has 90 days from receipt of the authorization request to examine the file. The absence of a decision upon the expiration of this period constitutes authorization.

Article 5:

The authorization request is submitted to the Central Bank of Congo.

It must include, in addition to the letter addressed to the Governor, the following documents:

• a three (3) year business plan detailing the technical aspects, operational policies and procedures of the banking agents, as well as administrative and financial details;
• a copy of the standard contract linking the banking agent to the subject entity;
• the list of services to be provided by the banking agents;
• a report on the risk assessment of the operations to be provided by the banking agents, including measures taken to control risks;
• the internal audit procedures manual integrating the control mechanism for financial services offered by the banking agents;
• anti-money laundering and counter-terrorist financing procedures;
• consumer protection procedures for financial services.

The Central Bank of Congo reserves the right to require any other information or document deemed useful for the analysis of the authorization request file.

Article 6:

Any natural or legal person capable of offering a professional service to clients, keeping accounts and a cash register, and managing treasury in accordance with the guidelines and directives of the subject entity may be a banking agent.

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Article 7:

The subject entity must ensure that the banking agent's file contains in particular the following information:

• information on its physical location, email addresses, postal addresses, GPS coordinates and telephone numbers, where applicable;
• a description of commercial activities;
• the banking services to be provided by the banking agent and their limits;
• the level of working capital required to support operations;
• a declaration from the subject entity's Compliance Service confirming that an assessment of the banking agent has been carried out before the conclusion of the contract.

Article 8:

Any subject entity wishing to use banking agents must ensure that the agent is an entity that:

• holds a permit from the competent authorities for the exercise of its commercial activity;
• has an existing and operational commercial activity for at least six (6) months at the date of assessment;
• enjoys a good reputation and has no history of criminal or financial problems or insolvency;
• possesses adequate physical infrastructure and trained human resources capable of providing services safely and efficiently.

CHAPTER 2: ESTABLISHMENT OF BANKING AGENT RELATIONSHIP

Article 9:

The subject entity is required to conclude a formal written contract before any banking agent activities commence.

Article 10:

Any contract to be concluded between the subject entity and a banking agent must contain the following provisions:

• the subject entity is solely responsible and liable for all actions or omissions of the banking agent. This responsibility extends to the actions of the banking agent as long as they relate to banking services provided and/or to be provided by the banking agent;

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• the subject entity must specify the banking services to be offered by the banking agent;
• the rights, obligations, and responsibilities between the two parties;
• anti-money laundering and counter-terrorist financing requirements;
• a written commitment specifying that all information or data collected by the banking agent in the course of its mission, whether from clients, the subject entity, or any other source, is the property of the subject entity;
• an acceptable limit of cash to be held by the banking agent and limits on individual client payments and receipts;
• client confidentiality and the use of information;
• measures to mitigate risks associated with the banking agent's services, including limits, client transactions, cash management and security, security of the banking agent's premises, and insurance policies;
• remuneration of the banking agent;
• the obligation of the banking agent to make its status as a provider of the subject entity's services known to the public;
• physical, technical, and operational security standards to which the banking agent is subject.

The banking agent contract must provide for the agent's commitment to:

• submit to any information requests from the subject entity, made directly by it or by any person designated by it;
• submit to any information requests and controls, including by the Central Bank of Congo.

Article 11:

The subject entity must also ensure that a minimum of the following information is contained in the contract:

• the obligation of the banking agent to provide and retain all documents related to operations carried out;
• the resolution by the subject entity to settle cases of non-compliance by the banking agent with the stipulated obligations;
• fees related to operations with the banking agent must be collected solely by the subject entity;
• the technical description of the electronic device to be used.

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Article 12:

The Central Bank of Congo may order the subject entity at any time to cease the temporary or definitive activity of any banking agent when it considers that the conditions for carrying out operations are no longer satisfactory.

Article 13:

The subject entity may use banking agents holding contracts with other subject entities provided it ensures in particular that the banking agent holds:

• sufficient and trained personnel capable of ensuring primary activities and the management of financial services offered by several subject entities;
• infrastructure allowing for the display of multiple signs and the smooth and confidential settlement of operations.

Article 14:

It is prohibited for the subject entity to conclude a banking agent contract with companies or establishments belonging to its personnel.

Article 15:

The subject entity is required to provide for a sharing of responsibilities in its relations with the banking agent, in compliance with the laws and regulations in force in the Democratic Republic of Congo.

Article 16:

The subject entity is required to retain, at its registered office, the file of each banking agent it mandates for at least ten years.

CHAPTER 3: BANKING AGENT OPERATIONS

Article 17:

Banking services authorized for the banking agent may include:

• money deposits;
• money withdrawals;
• bill payments;

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• local transfers;
• account statements;
• withdrawal of documents related to account opening requests, loan requests, credit or debit card requests;
• checkbook requests;
• insurance.

However, it is the responsibility of the subject entity to determine, based on the risk assessment of the banking agent, which of the services it is authorized to offer.

Article 18:

The banking agent may be authorized by the subject entity to intervene in the application for opening and closing accounts, particularly for carrying out due diligence related to customer knowledge.

However, the final decision to open or close accounts remains the responsibility of the subject entity. The elements justifying customer identification and knowledge must be retained by the subject entity in accordance with regulations on anti-money laundering and counter-terrorist financing.

Article 19:

The subject entity ensures that the banking agent it mandates receives, as necessary, any training required for the provision of agreed financial services.

CHAPTER 4: PROHIBITED OPERATIONS

Article 20:

It is prohibited for a banking agent to:

• operate or conclude electronic activity in the event of a communication system interruption;
• carry out a transaction without proof thereof, such as a transaction receipt, email, or telephone message;
• charge fees to the client for its own account or for the account of the subject entity;
• carry out operations when the main commercial activity is suspended;
• offer guarantees in favor of the subject entity or the client (which could compromise the viability of the subject entity);

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• offer financial services, including exchange operations, for its own account;
• continue with banking agent activities when it is proven that it is involved in a crime including fraud, dishonesty, counterfeiting, or any other criminal activity;
• provide financial advances.

CHAPTER 5: RESPONSIBILITY OF THE SUBJECT ENTITY

Article 21:

The subject entity is required to ensure the training of the banking agent, particularly on:

• the use of technological equipment;
• the services to be provided;
• consumer protection;
• anti-money laundering and counter-terrorist financing.

Article 22:

The subject entity is responsible for formulating policies, procedures, and guides that ensure:

• the banking agent is capable of providing the agreed financial services in accordance with Article 18;
• the banking agent has adequate and secure technological equipment for the real-time settlement of operations;
• risks associated with the banking agent are properly identified, documented, controlled, and managed;
• the activities of the banking agent are monitored to comply with the provisions of legal and regulatory texts as well as the banking agent contract.

Article 23:

The subject entity is financially liable towards its clients for the proper settlement of operations carried out with them through the banking agent, as if it had carried out the operation with its own agents, notwithstanding any contrary contractual clause.

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CHAPTER 5: SUPERVISION OF BANKING AGENTS

Article 24:

The subject entity is responsible for the control and supervision of the activities of its banking agents.

Article 25:

The subject entity is required to monitor the number and volume of transactions carried out for each type of service offered by the banking agent.

Article 26:

The subject entity must take arrangements to carry out periodic visits by its personnel or authorized persons to ensure that the banking agent operates in strict compliance with the legal and regulatory provisions governing the financial sector in the Democratic Republic of Congo.

CHAPTER 6: PUBLICATION OF BANKING AGENT LISTS AND THEIR LOCATION

Article 27:

The subject entity is required to publish an up-to-date list of its banking agents on its Website and through other appropriate channels. This list must be available at its points of operation, as well as with other banking agents.

The subject entity is required to communicate to the Central Bank of Congo/Direction of the Surveillance of Financial Intermediaries at the end of each quarter the updated list of its banking agents in accordance with Annex 1 and annually a report in accordance with Annex 2.

The subject entity is obliged to clearly designate the agency responsible for monitoring the banking agent operating within its radius of action.

The subject entity must provide its clients with contact details and telephone numbers or any other means for complaints regarding services provided by the banking agent.

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CHAPTER 7: RELOCATION, TRANSFER, AND CLOSURE OF BANKING AGENT PREMISES

Article 28:

The banking agent cannot move, transfer, or close its premises without previously informing the subject entity in writing.

The notice of intention to move, transfer, or close the banking agent's premises must reach the subject entity at least one (1) month in advance.

CHAPTER 8: MEASURES TO COMBAT MONEY LAUNDERING AND TERRORIST FINANCING

Article 29:

The subject entity remains responsible for ensuring the banking agent's compliance with measures to combat money laundering and terrorist financing.

To this end, it is required to ensure that the banking agent is able to provide it with information related to the duty of vigilance to which it is subject in accordance with current regulations in this matter.

Article 30:

Any failure to comply with the provisions of this Instruction will result in the application of sanctions provided for in the current legal and regulatory texts.

CHAPTER 9: PROFESSIONAL SECRECY

Article 31:

The subject entity must ensure respect for professional secrecy by the banking agent.

Any violation of professional secrecy by the banking agent constitutes an offense under this Instruction, punishable by a prohibition from exercising said activity.

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CHAPTER 10: TRANSITIONAL AND FINAL PROVISIONS

Article 32:

The subject entity holding the authorization from the Central Bank of Congo in this matter has a transitional period of three (3) months from the publication of this Instruction to comply with it.

This Instruction enters into force on the date of its signature.

Done in Kinshasa, on JUNE 28, 2016

Déogratias MUTOMBO MWANA NYEMBO Governor

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ANNEX 1

UPDATED LIST OF BANKING AGENTS

Financial Institution: Transmission Period:

No.	NAME OF BANKING AGENT	PHYSICAL ADDRESS	OPENING DATE	COMMERCIAL ACTIVITY	SERVICES OFFERED BY THE BANKING AGENT

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ANNEX 2

TEMPLATE FOR ANNUAL REPORT TO BE TRANSMITTED TO THE CBC

1. Number of banking agents operating Financial Institution: Year:

   No.: Name of banking agent: Physical address: Opening date: Commercial activity: Services offered by the banking agent:

2. Nature, number, value, and geographical transactions Name of banking agent: Year: Date:

   Nature of transaction (Deposit, withdrawal, etc.) Number of transactions via banking agents: Percentage of transactions via banking agents on the total Number of transactions by province and by type of transaction Value of transactions by province and by type of transaction Total

3. Fraud, theft, and other incidents Name of banking agent: Opening date: Year:

   No.: Nature of incident: Name of affected agent: Number of incidents: Amount involved: Date of occurrence: Actions taken:

4. Client complaints and actions taken Name of banking agent: Opening date: Year:

   No.: Nature of complaint: Name of agent involved: Date of occurrence: Actions taken: