Regulation No. 2025/BCC/DESM-DRRB on the Establishment of an Usury Rate for Credit Operations

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REGULATION No. 2025/BCC/DESM-DRRB
-------------------------------------------------- RELATING TO THE ESTABLISHMENT OF AN USURY RATE FOR CREDIT OPERATIONS OF CREDIT INSTITUTIONS --------------------------------------------------

Having regard to Law No. 20-038/AU of December 29, 2020, establishing the Penal Code in the Comoros, particularly Article 393;

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

Having regard to Banking Law No. 13-003-AU of June 12, 2013, particularly Article 57;

Having regard to Regulatory Decision No. 07-2023/BCC/DSBR of April 1, 2023, establishing an Effective Global Rate (TEG) for credit operations of credit institutions;

Considering the resolution of the Board of Directors of the Central Bank dated January 10, 2025;

THE GOVERNOR OF THE CENTRAL BANK OF THE COMOROS; Sets the rules relating to the usury rate applicable to operations with customers

Article 1. Definition of Usury

In accordance with Article 393, paragraph 1 of the Comorian Penal Code, usurious lending constitutes any loan or any agreement concealing a money loan granted, in any matter, at an effective global rate (TEG) exceeding, on the date of its stipulation, the usury rate fixed by the Central Bank of the Comoros. Without conflict with the provisions of Articles 395 and 397 of the Comorian Penal Code, the TEG is calculated for each loan contract and for credits granted on the occasion of installment sales, in accordance with the provisions in force in the regulation on the establishment of an effective global rate (TEG) for credit operations of credit institutions.

Article 2. Mandatory Disclosures to the Client

In accordance with Article 394 of the Comorian Penal Code, the TEG of each loan is freely negotiated between the borrower and the lender, subject to respecting the ceiling fixed by the Central Bank of the Comoros. Furthermore, lenders are required to bring to the knowledge of borrowers, by any means leaving a written trace in accordance with Article 6 of Regulation No. 07-2023/BCC,

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• The TEG as well as all elements taken into account in its calculation;
• The usury rate corresponding to the offered credits.

Article 3. Application of the Usury Rate

This Regulation applies to any type of loan granted by credit institutions within the meaning of Banking Law No. 13-003-AU of June 12, 2013 (banks and decentralized financial institutions). In addition to the establishments subject to this article, the provisions relating to the repression of usury apply to resident natural or legal persons in the Union of the Comoros.

Regarding loans granted by natural persons or legal persons other than the subject establishments, the applicable usury rates are those fixed for credit institutions and for operations of the same nature involving analogous risks.

In the case of loans on goods or other movable property and in credit sales or barter operations, the value of the items delivered or the price paid by the debtor, in principal and accessories, may not exceed the value of the items received by an amount greater than that corresponding to the usury rate applicable to credit operations of the same nature involving analogous risks.

Article 4. Fixing the Usury Rate

In accordance with Article 393, paragraph 2 of the Comorian Penal Code, the Central Bank of the Comores determines the usury rate. The usury rate for a given semester is defined as the last weighted average TEG calculated by the CBC (excluding loans to the State or state-owned companies) increased by a premium or decreased by a discount fixed by the Monetary Policy Committee. This adjustment takes into account the accessibility of consumer credit and the level of credit offers by the banking and financial sector. The usury rate is further differentiated according to the following axes:

Axis 1: Differentiation according to the type of credit institution, namely between Banks and Decentralized Financial Institutions (DFIs) Axis 2: Differentiation according to the duration of the credit, namely:

• Short-term credit: Less than 1 year
• Medium-term credit: Between 1 and 5 years
• Long-term credit: More than 5 years

Article 5. Publication of the Usury Rate

The Central Bank of the Comoros determines semi-annually the usury rates applicable for the six months following the date of determination.

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The fixed usury rate is published in the Official Journal or in a newspaper of legal announcements at the initiative of the Ministry in charge of Finance, in accordance with Article 393, paragraph 3 of the Comorian Penal Code. It will also be published and updated on the website of the Central Bank. Subject establishments must display the usury rates fixed by the Central Bank of the Comoros at their counters as well as in credit contracts and are required to publish them by any appropriate means.

Article 6. Sanctions for Non-Compliance with Usury Rules

Failure to observe the provisions of this Regulation (TEG exceeding the usury rate, failure to publish the usury rate, lack of information to the borrower on the usury rate) will result in sanctions as provided for in Articles 399 to 406 of the Penal Code and the law regulating banking activities. The offense of usury must be justified based on the usury rate in force at the time of signing the credit contract subject to the complaint. The statute of limitations for the offense of usury runs from the day of the last receipt of either interest, capital, or the last delivery of items related to the usurious operation. If the debt is extinguished in principal and interest, the sums unduly received must be restituted with legal interest calculated on the day they were paid.

Article 7. Entry into Force

This Regulation enters into force as of its date of signature.
The provisions of this Regulation are not applicable to ongoing contracts with a certain date.

Done in Moroni, on January 20, 2025

Dr. Younoussa Imani
[Stamp: CENTRAL BANK OF THE COMOROS - THE GOVERNOR - MORONI]

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