West Africa Economic and Monetary Union (WAEMU)
- Decision No. 397/12/2010 Issuing Rules, Instruments and Procedures to Implement the Monetary and Credit Policy of the Central Bank of the West African States
Title III. Banking Conditions
Article 22: Field of Application
The requirements of the present title apply to the terms/conditions of debt/credit and deposit services of credit establishments, of decentralized financing systems [a.k.a. microfinance institutions] and of Government or Post Office financing services, pertaining to the collection of deposits, to credit transactions, to currency exchange, to transfers, to means of electronic payments and to management techniques for securities accounts.
Article 23. Obligation of Transparency in Pricing and of Consumer Protection
Credit establishments, decentralized financing systems [a.k.a. microfinance institutions] and Government or Post Office financing services are required to respect the rules relating to the transparency of pricing and protection of consumers of financial and banking services.
Article 24. Setting the Terms of Debt/Credit
The terms of debt/credit applicable in the West African Monetary Union (WAMU) for credit establishments and the decentralized financial systems [a.k.a. microfinance institutions] operating on short, medium or long-term, through a cashier’s desk, through discount or movement of goods, through portfolio transactions, as well as through credit by the client’s signature, are freely set between the parties, subject to legislative or regulatory requirements relating to the usurious interest and of Article 25 below.
Article 25. Base for Setting Interest Rates for Debt/Credit
The interest rates for debt applicable to the clientele are indexed to a money market reference rate with a fixed margin for each credit or microfinance establishment.
Credit establishments are required to publish their best debt [interest] rate offered to the clientele.
Article 26. Setting the Terms of Deposits
The terms of deposits applicable to public or assimilated deposits and to private deposits, are agreed to freely between the credit establishments, the decentralized financial systems [a.k.a. microfinance institutions] and the Government or Post Office financial services on one side and their clientele on the other, with the exception of the following regulated savings products, the terms of which are set by the WAMU Council of Ministers:
- term deposits and short-term notes;
- savings accounts and books;
- savings plans and other contractual savings products.
Article 27. Contractual Savings Products
Credit establishments, decentralized banking systems [a.k.a. microfinance institutions] and the Government or Post Office financial services are authorized to freely market their contractual savings products, subject to respect for the reimbursement rates applicable to regulated savings products and for other requirements relating to these products.
The characteristics of the contractual savings products proposed to the clientele are communicated by the credit establishments, the decentralized financial systems [a.k.a. microfinance institutions] and the Government or Post Office financial services, [and] for [the purpose of] information, to the Central Bank and the Banking Commission of the WAMU.
Article 28. Commissions Applicable to Transactions Undertaken by the Clientele
The nature and the rates of commissions charged in advance of transactions with the clientele are freely fixed by the credit establishments, the decentralized financial systems [a.k.a. microfinance institutions] and the Government or Post Office financial services, subject to the banking terms applicable to transfer and currency exchange transaction presented in the annex to the present decision.
Article 29. Commission for Transfer Charged for the Benefit of the Public Treasuries of WAMU Member States
Banks and other registered financial intermediaries collect, for the profit of the public Treasury of their home State in the WAMU, a commission proportional to the transfer, with a minimum collection amount, applied above all to those orders by clients destined to countries outside the WAMU, in which there is a support service: transfer, bank check, etc.
The rate of the proportional commission and the minimum collection amount are set by the Council of Ministers for WAMU and distributed by BCEAO to the banks and other registered financial intermediaries concerned.
Article 30. Set Compounding Dates
Compounding dates [for interest] are fixed as follows: [omitted].
Article 31. Information on the Way of Posting/Advertising the Terms of Credit and Deposits
Credit establishments, decentralized financial systems [a.k.a. microfinance institutions] and the Government or Post Office financial services are required to post, in a visible manner from the entrance of their offices and their counters, the detailed list of the conditions on credit and deposit [products] that they charge their clientele, including the commissions. They must illustrate by way of a representative example the methodology for calculating the overall effective interest rate applied to credit [offered] to the clientele.
The information mentioned in the first paragraph just above must be posted in large format and in sufficiently visible printed characters, in particular the title “Terms of credit and deposit applicable by the establishment X.”
Article 32. Public Information by Way of the Press
Banks and, to extent necessary, financial institutions of a banking character, are required to publish in at least one daily newspaper a broad dissemination of their registration statement with the WAMU, each half-year period, and without delay after each modification to their best credit rate offered to the clientele, the following information:
- the minimum and maximum terms of credit indexed to the money market reference rate applicple to credit [offered] to the clientele;
- the minimum and maximum rates applied during the past trimester as payment for term deposits and other deposits and unregulated savings products;
Banks disseminate as widely as possible their terms of credit and deposits, by means of all forms of communication, at the start of each year and following every modification. The format for dissemination is fixed in consultation with the Central Bank of the West African States.
Credit establishments that do not charge an interest rate to clientele are required to publish the applicable rules for profit sharing, by means of all forms of communication, at the beginning of each year and following any modification.
Article 33. Information Communicated to Clients
Credit establishments and decentralized financial systems [a.k.a. microfinance institutions] are required, at the time of granting any credit, to determine and notify the borrower client in writing of the overall effective interest rate for the credit, the periodic rate and the duration of the period at the same time as the nominal interest rate of the loan and all the conditions pertaining to the loan, in conformity with the regulatory requirements on the subject.
Credit establishments, decentralized financial systems [a.k.a. microfinance institutions] and Government and Post Office financial services must inform the clientele of the terms of credit, all commission and charges included, and of the conditions of credit that are applicable.
In particular, a complete accounting of fees and commissions assessed is included at the end of every communication to clients.
Article 34. Information for the Central Bank, the Banking Commission of the WAMU and the Consumer Associations
Credit establishments are required to communicate their terms of credit and deposit to the Central Bank, to the Banking Commission of the WAMU and to the banking service consumer association, according to the frequency fixed by the Central Bank.
Government and Post Office financial services must communicate to the Central Bank and to the Banking Commission of the WAMU the conditions applicable to their payment of interest on deposits for clientele, according to the frequency fixed by the Central Bank.
Article 35. Sanctions
Credit establishments and decentralized financial systems [a.k.a. microfinance institutions] that have contravened the requirements of Articles 22 to 34 of the present decision are subject to sanctions prescribed by the law carrying banking regulation, and if applicable, by the law on decentralized financial systems [a.k.a. microfinance], and without prejudice to the requirements of the law carrying the definition and prohibition of usury.