The banking sector in Cameroon is governed by a wide variety of laws. Some of the different laws of international, regional, community and national origin are set out below.

Community Regulators of the CEMAC Banking Sector

The competent institutions in banking matters are: Banque des États de l'Afrique Centrale (BEAC), Central African Banking Commission (COBAC), Central African Economic and Monetary Community (CEMAC), Central African Monetary Union (UMAC) and the Central African Financial Market Oversight Commission (COSUMAF).

National Regulators of the CEMAC Banking Sector

Ministry of Finance (MINFI), National Agency for Financial Investigations (ANIF) and National Credit Council and Professional Association of Credit Institutions (APECAM).

Main Community Treaties and Regulations Governing the CEMAC Banking Sector

• Convention Harmonizing the Banking Regulation in the Member States of Central Africa and Annex to the Harmonization Convention Banking in the Member States From Central Africa.
1. This convention addresses the following issues: conditions of access to the banking profession; the form required of credit institutions; conditions for obtaining authorisation; share capital of credit institutions; the conditions for exercising the profession of banking; the form required of credit institutions; and the conditions for obtaining authorisation.
• Regulation No 02/04/CEMAC/UMAC/COBAC/C on the treatment of credit institutions in difficulty in the CEMAC.
1. This regulation addresses the closure, bankruptcy, liquidation and treatment of difficulties of banks or credit institutions.
• Regulation No 01/CEMAC/UMAC/CM on prevention and repression of money laundering and terrorist financing and proliferation in Central Africa.
1. This regulation addresses the rules applicable to money laundering and terrorist financing.
• Regulation No 02/18/CEMAC/UMAC/CM of 21 December 2018, on foreign exchange regulations in the CEMAC.
1. This regulation addresses the rules relating to manual foreign exchange activities, in particular, the monitoring of foreign exchange positions and the recording of foreign exchange transactions.
• Regulation No 04-18-CEMAC UMAC COBAC on payment services in the CEMAC.
1. This regulation addresses the rules relating to electronic money institutions, in particular, the exercise of the activity of issuing electronic money and the supervision of electronic money payment systems.
• Regulation No 06/03 CEMAC-UMAC on organisation, operation and supervision of the financial market of Central Africa.
1. This regulation deals with the organisation and functioning of the financial market in Central Africa.

The above list is merely an example of some of the laws and banking regulations of the CEMAC.

The Main National Laws Applicable to the Banking Sector in Cameroon

• Law No 2022/006 of 27 April 2022, governing banking secrecy in Cameroon.
1. This law deals with the elements of banking secrecy, exceptions and sanctions for its violation.
• Law No 2019/021 of 24 December 2019.
1. This law sets certain rules relating to credit activity in the banking and microfinance sectors in Cameroon.

The exercise of banking activities in Cameroon is conditional on obtaining a licence or an authorisation. The following approvals or authorisations may be granted.

Types of Licences or Authorisations Required to Carry out Banking Activities in the CEMAC

Banking regulations in the CEMAC have instituted a single licence for credit institutions in the CEMAC community. It gives a bank or a financial institution, having obtained the authorisation to carry out its activity in a member state of the community, the right, if it wishes, to extend it to another member state, to set up a subsidiary, a branch or an agency, without being obliged to fulfil the administrative formalities relating to the authorisation in the said country.

Activities and Services Covered by the Licence and Restrictions on the Activities of Licensed Banks in the CEMAC

Obtaining the licence entitles the holder to carry out the following activities:

• receiving funds from the public;
• granting loans;
• issuing guarantees in favour of other credit institutions;
• making available to customers and managing means of payment;
• foreign exchange transactions;
• transactions in gold, precious metals and coins;
• renting safe deposit boxes;
• placing, subscribing to, purchasing, managing, keeping and selling securities and any financial products;
• advising and assisting in asset or financial management;
• financial engineering; 
• all services intended to facilitate the creation and development of companies, subject to the legislative provisions relating to the illegal exercise of certain professions; and
• simple leasing of movable or immovable property for institutions authorised to carry out leasing operations.

The Procedure for Applying for Approval or Authorisation as a Credit Institution in the CEMAC

Authorisation as a credit institution (bank or financial company)

The procedure

• Drafting of the application by the applicant.
• Submission of two copies of the file to the MINFI against a receipt.
1. This file must contain information relating to the credit institution, its shareholders, directors and officers and auditors, the list of shareholders, detailing for each shareholder the number of shares held, the nominal value of the shares, the paid-up shares, the corresponding percentage of participation and the notarised declaration of subscription and payment of the share capital.
• Transmission of the application file by the applicant to the COBAC for information purposes.
• Transmission of the application file to the COBAC by the MINFI for approval.
1. This file must include the draft articles of association, the list of shareholders and directors, a copy of their birth certificate and two passport photographs, an extract from the criminal record dating back to less than three months, a curriculum vitae, copies of the required diplomas, a copy of the minutes of the meeting of the board of directors appointing the interested parties, a certificate of domicile, a valid residence permit for foreigners, the forecasts of activity, establishment and organisation, details of the technical and financial means whose implementation is planned, as well as any other elements likely to enlighten the decision of the authorities.
• The COBAC has a period of six months from the date of receipt of the complete file to rule and notify its decision to the MINFI.
• The MINFI’s order following the COBAC’s assent/notification of refusal of approval is issued. The order specifies the authorised activities.
• Publication of the approval order in the Official Gazette at the expense of the beneficiary.
• Allocation of a registration number to the bank by the National Credit Council.

This approval can only be granted if the applicant is incorporated in the form of a public limited company with a board of directors, with the exception of branches of credit institutions having their head office abroad, if the shares are in registered form (for institutions having their head office in the signatory states), if the applicant located outside the CEMAC has not obtained a notice of no objection or prior agreement from the banking supervisory authority of its country of origin, if its share capital is equal to or greater than XAF10 billion for banks and equal to or greater than XAF2 billion for financial institutions.

Authorisation to issue electronic money

The procedure

• Submission of the authorisation application file in duplicate against a receipt at the National Directorate of the Bank of Central African States.
1. The file must include a request for authorisation addressed to the governor of the BEAC.
• Notification of the authorisation by the BEAC to the applicant institution, with a copy to the MINFI, the National Directorate of the BEAC and the COBAC.
• Publication of the authorisation in the Official Journal by the BEAC.

Authorisation to participate in multibanking

The procedure

• Submission of the application for agreement to participate in a multibanking network to the National Directorate of the BEAC against receipt.
• Authorisation from the BEAC to participate in multibanking.

Approval as a payment service provider

Approval as a payment service provider entitles the holder to carry out the following activities:

• granting deferred debits to customers’ accounts for payment transactions made with a payment card or similar device;
• granting payment by credit;
• investing resources;
• withdrawing customers’ own funds in one or more types of low-risk, liquid and secure accounts and assets;
• carrying out currency exchange operations;
• guaranteeing the execution of payment operations on behalf of payment service providers;
• management and operation of automatic teller machines and payment terminals;
• custody services; and
• recording and processing data on behalf of other payment service providers.

Approval to operate as a payment service provider is granted according to the following procedure:

• drafting of the application for authorisation (this application must specify the payment services to be provided);
• submission of the application file to the BEAC. The BEAC has a period of three months to give its decision and notify its opinion to the COBAC; and
• granting of the authorisation.

A change of control is the operation by which a person or group of persons acting in concert acquires or disposes of a fraction of the capital which gives or causes it to lose effective control of the management of the institution.

Conditions for Change of Control

Banking requirements

Obtaining prior authorisation from the COBAC

An application for prior authorisation for a change of control must be filed with the COBAC.

Composition of the file

The file must contain the following:

• a certified copy of the legal document defining the terms and conditions of the transaction between the parties concerned and, where applicable, the shareholders’ agreement;
• notarised declarations of subscription and payment;
• the table showing the distribution of the credit institution’s capital before and after the transaction;
• a study detailing the objectives of the transaction, the terms of its financing and its impact on the control of the target institution, in particular with regard to its governance, commercial strategy, planned activities, outsourcing of activities and its situation;
• a study detailing the objectives of the transaction, the terms of its financing and its impact on the control of the target institution, in particular as regards its governance, business strategy, planned activities, outsourcing of activities, prudential situation, risk profile and exposure to new risks;
• the three-year business plan; and
• the prior agreement or the no-objection opinion of the banking supervisory authority of the country of origin, when the acquirer is a credit institution, a group or a financial company based outside the CEMAC.

The regulation imposes conditions on the acquirer who intends to take control of a credit institution operating in the CEMAC in order to assess its potential quality and good repute, its financial soundness and finally to ensure that it is not subject to any prohibition or incompatibility. The elements required from the purchaser are the following:

• the company’s articles of association;
• annual financial statements certified by the auditors, including balance sheets and profit and loss accounts for the last three years;
• the shareholding structure and, if applicable, that of the parent company, banking group or financial holding company to which the purchaser belongs, detailing for each shareholder the number of shares held, the corresponding fraction of the capital and the equivalence in voting rights;
• a statement of holdings in other credit institutions based in the CEMAC or outside the CEMAC;
• the minutes of the competent governing body approving the operation;
• a copy of the subscription form for the shares of the credit institution or of the deed of transfer; and
• a declaration on honour by which the purchaser indicates the origin of the funds to be invested and certifies that these do not come from illicit activities.

OHADA requirements

Prior formalities

Banking regulations require:

• the minutes of the general meeting of the transferring credit institution or of the deliberative body of the transferee entity, authorising the transfer;
• the report of the board of directors of the transferring credit institution or of the governing body of the transferee entity, addressed to the shareholders;
• the annual financial statements certified by the auditors, including the balance sheet and profit and loss accounts for the last three financial years of the transferring credit institution and the transferee entity; and
• the articles of association of the transferring entity.

Publicity and Registration of the Change of Control

The change of control must be recorded in writing. This act may only be invoked against the company after the completion of one of the following formalities:

• service of the deed on the company by bailiff’s deed or notification by any means allowing its effective receipt by the addressee;
• acceptance of the transaction by the company in a notarial deed; or
• deposit of an original of the deed at the registered office against delivery by the directors of a certificate of deposit.

Guiding principles for the governance of credit institutions:

• balance and independence of corporate bodies;
• independence of the board of directors and its members;
• separation of the functions of the chairman of the board of directors and the chief executive officer;
• evaluation of corporate bodies;
• evaluation of corporate governance; and
• voluntary codes and banking industry initiatives.

It should be noted that the majority of the CEMAC credit institutions have a code of ethics and professional conduct that addresses issues of governance of credit institutions in the CEMAC, such as conflict of interest management, and there is staff training on compliance.

Designation of Directors or Senior Managers

The management bodies (general manager and deputy general manager) of credit institutions and the auditors are designated in the articles of association (or in an annex to the articles of association).

Following this designation, their appointment must be approved by the MINFI. In order to obtain this approval, the credit institution must send an application for approval to the MINFI in duplicate against a receipt. A copy of this file will be sent by the MINFI to the COBAC. It must include the following documents and information:

• a curriculum vitae;
• a curriculum vitae written in French, duly dated and signed;
• certified copies of diplomas;
• certified copies of certificates of employment as well as a list of positions previously held, specifying the size, number of employees and nature of the activities of the companies concerned;
• a certified copy of the birth certificate;
• two passport photographs;
• a certified copy of a valid official identity document (national identity card or passport);
• an extract from the criminal record, not older than three months, issued by the competent authorities of the applicant’s country of nationality and country of residence;
• a list of current directorships held in other companies, including companies in the group to which the future credit institution is related or linked;
• a declaration on honour by which the applicant manager certifies that they are not subject to any of the prohibitions or incompatibilities provided for by the regulations in force;
• a list of holdings in other companies detailing, for each of them, the number of holdings, their nominal values and the corresponding percentage and equivalence in voting rights;
• a certificate or attestation of residence dated less than three months previously;
• a valid residence permit for foreigners;
• a copy of the minutes of the board of directors or the general meeting appointing the director;
• where applicable, copies of previous approvals for managers approved in the non-CEMAC banking sector;
• a certificate of taxation issued by the tax authorities of the country of taxation; and
• a certificate of non-bankruptcy or non-admission to a collective procedure for the settlement of liabilities.

For the statutory auditor, the file must include the following documents:

• if the auditor is a legal entity:
1. a copy of the minutes of the ordinary general meeting of shareholders appointing the person concerned as auditor;
2. a form containing general information on the company in accordance with the model defined by the COBAC instruction;
3. an extract from the Trade and Personal Property Credit Register;
4. a copy of the articles of association;
5. a certified copy of the approval issued by the CEMAC as a chartered accountancy firm;
6. a certificate of registration with the National Order of Chartered Accountants, for countries that have such a body;
7. the certified annual financial statements for the last three financial years, including balance sheets and profit and loss accounts as well as details of turnover with credit institutions;
8. a description of the services or assignments carried out, indicating the periods of intervention, the clients and the sectors of activity, supported, where appropriate, by certificates issued by the clients mentioned;
9. where applicable, copies of previous approvals for auditors already approved in the banking sector outside the CEMAC;
10. a declaration on honour by which the auditor certifies that none of the partners is affected by any of the prohibitions or incompatibilities provided for by the regulations in force;
11. a declaration on honour by which the auditor indicates the direct or indirect social, financial or business links that the legal person or its partners have with the credit institution that they are called upon to control or any related or affiliated company, and the family links with the managers or shareholders holding at least 5% of the capital of the credit institution;
12. a certificate of taxation issued by the tax authorities of the country of taxation;
13. a certificate of non-taxation issued by the social security institution of the country of taxation;
14. a certificate of non-bankruptcy or of non-admission to a collective procedure for the settlement of liabilities; and
15. the professional liability insurance policy; and
• if the auditor is a natural person:
1. a copy of the minutes of the ordinary general meeting of shareholders appointing the person concerned as statutory auditor;
2. a certified copy of a valid official identity document (national identity card or passport);
3. an extract from the criminal record, not older than three months, issued by the judicial authorities of the country of nationality and the country of residence;
4. two passport photographs;
5. a certified copy of the approval issued by the CEMAC as a chartered accountant;
6. a certificate of registration on the roll of the National Order of Chartered Accountants for countries with such a body;
7. a curriculum vitae written in French, duly dated and signed, accompanied by a statement of services or missions accomplished, showing the periods of intervention, the clients and the sectors of activity, supported, if necessary, by certificates issued by the clients;
8. where applicable, copies of previous approvals for auditors already approved in the banking sector outside the CEMAC;
9. a declaration on honour by which the auditor certifies that they are not affected by any of the prohibitions or incompatibilities provided for by the regulations in force;
10. a declaration on honour by which the auditor indicates the direct or indirect social, financial or business links that they have with the credit institution that they are called upon to audit or any related or affiliated company, and the family links with the managers or shareholders holding at least 5% of the capital of the credit institution;
11. a certificate of taxation issued by the tax authorities of the country of taxation;
12. a certificate of non-repayment issued by the social security institution of the country of taxation;
13. a certificate of non-bankruptcy or non-subjection to a collective procedure for the settlement of liabilities; and
14. the professional liability insurance policy.

Also, they must not be a corporate officer under any circumstances. At the end of the examination of the application, the MINFI issues a decree granting approval.

Persons Subject to Remuneration Requirements

In the current state of banking legislation, the National Joint Committee on Collective Agreements has established a binding salary scale (rates) applicable to the employees of credit institutions. This salary scale varies according to the category (A to F) and step (I to XII) of the employee.

Briefly, the lowest salary is set at XOF68,174 and the highest salary is set at XOF831,911. However, the amounts contained in this salary scale must be respected unless the credit institution grants its employee a higher salary than that provided for. In accordance with social legislation, credit institutions that do not respect this salary requirement are punished by a fine of XOF100,000 to XOF1 million.

The obligation to take appropriate measures to identify and assess money laundering and terrorist financing risks includes:

• development of policies, procedures and internal controls to combat money laundering and terrorist financing;
• declaration to the ANIF of cash transactions of an amount equal to or greater than XOF5 million;
• declaration to the ANIF of all deposits whose amount, for a single transaction or for several transactions that appear to be linked or that are unusual or unrelated to the activity in question;
• identification of clients, the beneficial owner of the business relationship before entering into a relationship or assisting in the preparation of the execution of a transaction;
• gathering and analysing information before and after entering into a business relationship with a client; and
• exercising permanent vigilance over business relationships.

The fight against the financing of terrorism by credit institutions in the CEMAC includes:

• the obligation to put in place all measures to prevent money laundering and terrorist financing;
• putting in place adequate risk management systems; 
• the obligation to train staff on measures to avoid and deal with money laundering and terrorist financing;
• establishing effective compliance processes; 
• the prohibition against co-operating with shell banks;
• the definition of a clear customer acceptance policy;
• the obligation to provide information on the origin of funds in a business relationship with politically exposed persons;
• identifying non-resident customers; 
• monitoring any large transaction involving sums of money that exceed the threshold set by the Ministerial Committee; and
• working in collaboration with the ANIF.

Supervision of the Depositor Protection Regime

The protection regime for depositors is ensured in Cameroon and in the CEMAC by Regulation No 01/09/CEMAC/UMAC/COBAC of 20 April 2009, creating the Deposit Guarantee Fund in Central Africa. The Central African Banking Commission supervises the depositor protection system in the CEMAC.

Classes of Depositor and of Deposits

All savers, natural or legal persons, have the guarantee of the reimbursement of the eligible sums from the deposits on sight or in the long term, passbook accounts, the credit balance of current accounts or ordinary accounts and security deposits when they become eligible.

The Ceiling of the Indemnifications

The ceiling for the compensation of the holder of deposits and other assets eligible for protection under the guarantee mechanism is set at XOF5 million per beneficiary and per credit institution.

Financing of the Depositors’ Guarantee Fund Scheme in the CEMAC

The financing of the depositor protection regime, the deposit guarantee fund, is provided by the contributions of credit institutions, the investment products of these contributions, donations and grants.

Banking secrecy is governed in Cameroon by Law No 2022/006 of 27 April 2022. It is an obligation of confidentiality to which credit institutions operating on Cameroonian territory are required to respect vis-à-vis their customers. It covers acts, facts and information concerning their clients of which they have become aware in the exercise of their profession. The information covered by banking secrecy is that relating to identity.

The Derogations From Banking Secrecy

The amounts of the customer’s account or bank accounts and the nature of the transactions carried out by the customer and the identity of the beneficiaries, in favour of public authorities, or the judicial authority within the framework of criminal proceedings or judicial police officers acting at the request of the Public Prosecutor or the investigating judge on letters rogatory, Public Treasury agents, the COBAC, BEAC, CNPS, financial investigation agency and the economic and financial national committee.

In favour of private persons

To the mandatary within the limits of his mandate, to the spouse with an act of legal or contractual representation, to the guardian of a minor or an incapable adult, to the curator of a protected adult, to the attorney, to the heirs, beneficiaries, executors, liquidators and administrators of a successor.

Consequences of the Violation of Banking Secrecy in Cameroon

For natural persons, prohibition to exercise a function or activity in a taxable credit institution or, publication of the court decision and its dissemination by means of the press draws a penalty of imprisonment for a period of three months to three years.

For legal persons, publication of the court decision and its dissemination through the media, results in closure, for a fixed period, of the establishment or branch used in the commission of the acts complained of.

Basel III is an international banking regulation issued by the Basel Committee, and has been applied in several CEMAC regulations which are: COBAC Regulation R-2016/03 on the net capital of credit institutions in the CEMAC, COBAC Regulation R-93/06/ on the liquidity of credit institutions amended by COBAC Regulation R-2013/04, COBAC Regulation R-93/05 on the coverage of fixed assets amended by COBAC Regulation R-2013/02 and COBAC Regulation R-2018/03 on the identification and supervision of systemically important institutions of the CEMAC.

Risk Management Rules

The CEMAC regulation has provided for measures other than those proposed by the Basel Committee to increase the supervision of banks. Some of the most significant follow.

• The risk-splitting ratio is set out in COBAC Regulation R-2001/04. In accordance with this regulation, the idea is that credit institutions are required to respect a maximum ratio between the amount of their net own funds and all the risks they incur as a result of on beneficiaries whose liabilities exceed, for each of them, 15% of net own funds and does not exceed eightfold of net own funds;
• The long-term transformation coefficient (COBAC Regulation R-93/07). What must be remembered here is that the ratio between resources with more than five years to maturity and jobs and commitments of the same term must be at least equal to 50%, that is to say that long resources must finance at least half of the uses of the same nature.
• Fixed asset coverage (COBAC Regulation R-93/05 as amended by COBAC Regulation R-2001/06). In essence, this ratio stipulates that credit institutions are required to respect a minimum ratio of 100% between the amount of their net own funds and permanent resources, on the one hand, and that of fixed assets on the other hand.

Quantity and Quality of Capital Requirements, Including any Rules Concerning Capital Buffers

The net own funds of the CEMAC credit institutions consist of core own funds and additional own funds, less certain elements under the conditions laid down in COBAC Regulation R-2016/03 on the net own funds of credit institutions.

Equity must at all times be equal to 4.5% of the net weighted risks which are the amounts of risks borne by a credit institution and calculated in accordance with the provisions of COBAC Regulation R-2010/01 relating to risk coverage.

Core capital must always represent at least 6% of all risks net weighted.

Liquidity Requirements

The credit institutions mentioned in Article 2 of the Annex to the Convention of 16 October 1990, establishing a Central African Banking Commission are required to comply with a liquidity ratio, at least equal to 100% within a minimum of one month between their availability and their liabilities.

This liquidity report includes a numerator which is composed of certain elements and a denominator that also includes some.

Additional Requirements Applicable to Systemically Important Banks

COBAC Regulation R-2018/03 on the identification and supervision of systemically important institutions in the CEMAC lays down specific capital requirements for systemically important credit institutions, by obliging, to establish an additional buffer of core capital intended to reduce the likelihood of their failure and increase their turnover.

This additional capital conservation buffer is variable. It is:

• 2.5% of net weighted risks when the institution is of high systemic importance;
• 1.5% of net weighted risks when the credit institution is of medium systemic importance; and
• 1% of net weighted risks when the credit institution is of low systemic importance.

For the purpose of preserving or restoring normal operating conditions, disciplinary and/or restructuring measures are implemented to improve the situation of a credit institution in difficulty.

There are both preventive and curative measures in place to deal with insolvency and the recovery of a credit institution in the CEMAC zone.

Preventative Measures

The Secretary General or the Deputy Secretary General of the COBAC may propose to a credit institution a recommendation to:

• restore or strengthen its financial situation;
• improve its management practices; and
• ensure the adequacy of its organisation for its activities, risks or development objectives.

The Secretary General or the Deputy Secretary General of the COBAC may, in particular, recommend that the credit institution submit a recovery strategy detailing the measures taken or which it intends to take.

The Secretary General or the Deputy Secretary General of the COBAC sets the deadline within which the credit institution is required to respond to a warning. In the event of failure by a credit institution to comply with the rules of good conduct of the profession or if a credit institution has not responded to a recommendation, the COBAC or its president may, after giving formal notice to its social leaders to explain themselves, send them a warning.

Article 9 states that the warning decision shall be notified to the persons concerned and to the monetary authority concerned, with aggregation to the National Directorate of the BEAC.

An injunction may be issued to take all the measures set out in the order to:

• restore or strengthen its financial situation, including by prescribing more restrictive prudential standards and the disposal of all or part of the shares held as an equity interest;
• improve its management practices; or
• ensure the adequacy of its organisation for its activities, risks or development objectives.

The COBAC may, in particular, order the credit institution to increase the amount of its own funds at a level commensurate with the specificity of its risks and require it to apply an appropriate treatment or provisioning policy to its assets, the regulation of own funds requirements. It may also order the person to restrict or to temporarily limit its activity.

COBAC may order the credit institution to submit to its assessment a recovery plan for the effective implementation of these measures.

COBAC sets the time limit within which the credit institution is required to respond to the terms of the injunction.

The injunction decision is notified to the credit institution, to the monetary authority concerned with amplification and to the National Directorate of the BEAC. Where justified by the gravity of the situation of a credit institution, its shareholders are entitled to present to the COBAC the appropriate solutions such as appoint finance necessary for its remediation, in particular through an increase in the share capital or any other assistance, as well as the timetable for the implementation of these solutions.

The presentation of the appropriate solutions to the COBAC is made at the invitation of the chairman of the COBAC or on the initiative of the shareholders.

The Intervention of the BEAC

Where justified by the gravity of the situation of a credit institution, the COBAC exchanges with the BEAC all information necessary for the implementation of detailed measures, in accordance with the statutes of the Issuing Institute, for the remediation of the establishment.

Curative Measures or Restructuring Measures

Action under Regulation No 02/14/CEMAC/UMAC/COBAC/CM on the treatment of credit institutions in difficulty in the Economic and Monetary Community of Central Africa, is considered to be a restructuring of a credit institution and provides all operations aimed at one or more of the following objectives:

• the restoration of management in accordance with the regulations, where the company directors are no longer able to carry out duties normally or no longer exercise them by virtue of, inter alia, a disciplinary sanction of suspension, compulsory resignation, or withdrawal of approval;
• the re-establishment of an administration in accordance with the regulations, where there is deficiency or paralysis in the normal functioning of the social organs; and
• the restoration of fundamental financial balances and the implementation of internal rules and procedures necessary for the normal functioning of the credit institution.

These operations, which may be of various kinds and forms, fall within the scope of provisional administration and/or special restructuring.

Provisional administration is a procedure applicable to establishments of credit which encounter difficulties such as it appears necessary, for the return to normal operating conditions, to carry out provisional substitution of the board of directors and senior management by an ad hoc officer, in accordance with the terms of the Division.

It may also be applied for precautionary purposes under certain conditions.

The Opening of the Special Restructuring

The special restructuring of the credit institution is pronounced by order of the monetary authority taken on the conformed opinion of the COBAC. The special restructuring procedure may be initiated:

• at the request of the legal representative of the credit institution duly authorised by the general meeting of shareholders, formed by the monetary authority; or
• on the automatic referral to the monetary authority.

Modalities of the Special Restructuring

As soon as the order of special restructuring is published, the powers of general meetings of shareholders are transferred to the legal representative of the credit institution for the execution of the operations set out in the special restructuring. These include powers regarding:

• the allocation of losses to the capital and reserves of the credit institution;
• the merger or acquisition of the credit institution with/by another credit institution;
• the transfer by the credit institution of all or part of its activities or of its goodwill;
• the transfer of the assets and liabilities of the credit institution for the purpose of enforcement or liquidation to an authorised body;
• the financial restructuring of part of the activity; and
• the decision to have recourse to a bridge bank responsible for receiving, on a provisional basis, all or part of the property, right and obligations of the establishment in question, with a view to a transfer under the conditions set by the monetary authority after notice.

COBAC Compliant

The closure of the special restructuring

The lifting of the special restructuring occurs when the conditions of normal operation of the credit institution are restored, in particular with the restoration of solvency and the establishment of company directors.

Currently, there are few reform projects within the CEMAC that will impact its banking regulations. However, with the rise of cryptocurrencies in the CEMAC zone, the Central African Banking Commission in a press release, dated 6 May 2022, by the BEAC, recalled the prohibition in the CEMAC of operations related to the use of crypto-assets. This prohibition applies in particular to the subscription and holding of cryptocurrencies of any kind whatsoever on behalf of third parties, the exchange or conversion, settlement or hedging in currency or CFA franc, of transactions of any kind whatsoever on behalf of third parties, the exchange or conversion, settlement or hedging in currency or CFA franc of transactions relating to or having a place with cryptocoins.

It seems unlikely that the CEMAC regulation on the use of cryptocurrencies will change in the direction of authorisation despite its clandestine use by natural persons especially in the CEMAC through the internet.

Banking Regulation Requirements Related to the Environment

Strictly speaking, there is no banking regulation in the CEMAC in terms of environmental protection. However, the CEMAC banks, as part of their social and environmental responsibility policy, finance projects in the field of environmental protection.

However, it is less certain that this environmental criterion serves as a filter for their financing policy, which is nevertheless the case in some financing they request from major international banking institutions such as the African Development Bank and the European Investment Bank etc.

Banking Regulation Requirements Related to Society

Regulation No 04/19/CEMAC/UMAC/CM obliges banks to publish their bank conditions in all their branches for the attention of their customers. This obligation aims to protect customers against the levelling of arbitrary tariffs by banks. In addition, the same regulation prohibits CEMAC banks from granting credit to consumers at a usurious rate.

Regulation No 01/20/CEMAC/UMAC/COBAC on the protection of consumers of banking products and services in the CEMAC obliges banks in the CEMAC to protect the personal data of their customers collected when they enter a relationship and throughout the duration of their business relationship, puts them at their expense, the obligation to advise, to be transparent with their clients and to conclude balanced commercial contracts with their clients.

Banking Regulation Requirements Related to Governance

Regulation No 04/08/CEMAC/UMAC/COBAC/ on corporate governance in credit institutions of the Economic and Monetary Community of Central Africa lays down the principles of governance of CEMAC credit institutions, the balance and independence of their corporate bodies, independence of the board of directors and its members, separation of the functions of chairman of the board of directors from that of chief executive officer, evaluation of social bodies, management of conflicts of interest, right to management of conflicts of interest and right to information for shareholders.