Financial Crime World

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Banking Regulation in Senegal

Senegal has established a robust regulatory framework for its banking sector, ensuring stability and protecting depositors. Here are some key points related to banking regulation in Senegal:

Capital Requirements

The minimum capital requirements for banks in Senegal are as follows:

  • Minimum Common Equity Tier 1 Capital Ratio: 7.5% (Decision No 003 of 30/03/2015/CM/WAEMU)
  • Minimum Total Capital Ratio: 11.5% by end-2022, which includes a 2.5% capital conservation buffer

Operational Risk Management

Banks in Senegal are required to have an effective operational risk management function in place:

  • Institutions wishing to use the standard approach must set up an operational risk management function with strong involvement of the executive body.
  • The French banking commission (ACPR) sets counterparty weightings for credit risk assessment under the standard approach.

Insolvency, Recovery and Resolution

Senegal’s legal framework for insolvency, recovery, and resolution is governed by:

  • OHADA Uniform Act on the Organization of Collective Procedures: This act provides a framework for dealing with companies in difficulty.
  • Law of 2008: This law complements the OHADA Uniform Act and outlines the procedures for dealing with companies in distress.

The three main procedures for dealing with companies in difficulty are:

  • Preventive Settlement: A procedure aimed at preventing insolvency by restructuring a company’s debts.
  • Judicial Recovery: A procedure that allows a company to recover from financial difficulties under judicial supervision.
  • Liquidation of Assets: A procedure that involves the sale of a company’s assets to pay off its debts.

Additional Points

Some additional points worth noting are:

  • The FSB Key Attributes of Effective Resolution Regimes have not been implemented by the Senegalese government.
  • The Banking Commission takes decisions on the withdrawal of authorisation and winding up of a credit institution in case of liquidation proceedings.