Banking Regulations

BANKING REGULATIONS.
Banking
The business of receiving, safeguarding and lending of money is called banking. In

general, people who have some spare money, do not keep it with them to avoid the
risk of losing it by theft, etc. They deposit this spare money in a bank. In the bank,
the money is safe as well as it fetches interest on it. On the other hand, some people
need money to start a business or to expand their business. So they borrow money
from the bank at a nominal interest on the money borrowed from the bank. Thus, a
bank is an institution which carries on the business of taking deposits and lending
money. The rate of interest charged by the bank from its borrowers is usually higher
than what it pays to depositors.
Types of Accounts:
The four different types of accounts provided by banks are as follows:
1. Current Account
2. Fixed Deposit Account
3. Saving Account
4. Recurring Deposit Account
Current Account
In banking terminology, the term Current Account refers to a type of deposit account
made with a financial institution that permits the withdrawal of funds and allows
checks to be written against the balance.
A Current Bank Account is opened by businessmen who have a higher number of

regular transactions with the bank. It includes deposits, withdrawals, and contra
transactions. It is also known as a Demand Deposit Account. A current account can
be opened in a co-operative bank or a commercial bank. In Current Account,
money can be deposited and withdrawn at any time without giving any notice
or penalty. This is the reason why most current accounts do not pay interest on
the funds deposited in them. The customers are allowed to withdraw the amount
with cheques. Cheques received from customers can be deposited in this account for
collection.
A Current Account will often be used by individuals, businesses and financial
institutions around the world as a means of keeping liquid funds available for
making necessary payments and withdrawals. In the retail market, a Current
Account is a relatively safe investment when opened with an insured and regulated
financial institution like a bank, building society, savings and loan corporation, or
credit union. In Cameroon, current account can be opened by depositing Xaf.5000
Xaf 25,000.
Fixed Deposit Account
In deposit terminology, the term Fixed Deposit Account refers to a type of savings
account or certificate of deposit where deposits are made for a specified period of
time and that pay out a fixed rate of interest, i.e., the account which is opened for a
particular (fixed) period (time) by depositing a particular amount (money) is known
as a Fixed (Term) Deposit Account. The term ‘fixed deposit’ means that the
deposit is fixed and is repayable only after a specific period is over. Under fixed
deposit account, money is deposited for a fixed period say six months, one year, five
years or even ten years. The money deposited in this account cannot be
withdrawn before the expiry of period. The rate of interest paid for fixed deposits
changes according to amount, period and from bank to bank.
A Fixed Deposit Accounts require that the funds be left in the account until the
maturity date, incurring penalties for early withdrawal. These types of accounts are
ideal as a store of wealth for individuals, businesses and financial institutions,
earning a higher rate of interest on liquid assets than regular savings and
checking accounts. The term Fixed Deposit is used in India and Southeast Asia and
its equivalent in the United States is Time Deposit or CD, while in the United
Kingdom the equivalent term is a Bond, and in Australia and Canada the investment
product is known as a Term Deposit.
Saving Account
As suggested by the name itself, this account is to encourage the habit of savings
among the people. This account can be opened in any bank with a suitable amount
of money. After opening the account, the account holder can go on depositing money
into his/her account at his/her convenience. He/she can also withdraw money from
his/her account whenever required. The bank pays a certain rate of interest on the
money kept in this account. The rate of interest on a savings bank account keeps
changing from time to time and is compounded yearly or half-yearly according to
the rules of different banks.
On opening an account, every person gets a pass-book issued by the bank. This pass
book is held by the depositor in which date-wise entries regarding the deposits,
withdrawals, balances and the interest earned are recorded by the bank.
Banking regulation and integration within the CEMAC, 25 years since the
creation of COBA: International colloquium organized on the occasion of
celebration of 25 years of COBAC, 10 and 11 December 2015.
Due to banking regulation which is more and more harmonized, banking integration
in the CEMAC zone is progressively becoming a reality. For this reason, the
celebration this year 2015 of 25 years of creation of COBAC is an important
occasion to profoundly question the balance sheet and perspectives of this regulation
and integration. In order to stimulate scientific discussions in this direction and to
draw the attention of different actors, the Groupe d'Étude et de Recherche en Droit,
Institutions et Intégration Communautaire (GERDIIC) of the Faculty of Law and
Political Science of the University of Dschang, is organizing an International
colloquium to this effect on 10th and 11th December 2015 at the University of
Dschang in Cameroun.
I. Context
Drawing from the lessons of the systematic banking crises at the end 1980s, member
countries of BEAC zone undertook an integrated banking regulation through the
creation of a common banking supervisor and the harmonization of their banking
legislation. It was on this stand point that on 16th October 1990 in Yaoundé, the
Convention creating the Banking Commission of Central Africa (COBAC) was
signed followed on 17 January 1992 by the Convention on the harmonization of
banking regulation in central African states. This institutional plinth since then has
re-asserted the new dynamic of economic integration which was booted up by the
creation of CEMAC in 1994.
The creation of COBAC brought about important changes in the banking land scape
of the countries of CEMAC constituting one of the important levers of integration
and the stability of the banking system.
The colloquium “Banking regulation and integration within the CEMAC, 25 years
since the creation of COBAC” is a multidisciplinary scientific manifestation which
intend to bring together experts from different horizons (jurists, economists and
professionals of banking and micro finance), to cast a retrospective and prospective
glance on the achievements and challenges of banking regulation and integration
within the CEMAC, with regards to the stakes of stability and the security of the
banking and financial systems of CEMAC.
II. Objectives
II-1. General objective
The main objective of the colloquium is to make a critical evaluation of the legal
framework and the mechanisms of regulation and integration within the CEMAC
since the putting in place of COBAC in order to make an appraisal of their effects
on the stability of the banking system and the economic development of the sub
region.
II-2. Specific objectives
Specific objectives are as follows:
 To appreciate the level of banking integration within the CEMAC;

 To identify the assets and the intensity of the mechanisms of banking regulation;
 To evaluate the effectiveness of banking control and supervision and their effects on
the stability of the banking system.
The domain of banking regulation
This concerns reflecting on the different matters that fall within CEMAC banking
regulation, especially as we notice some sort of extension of the domain of
competence of the community legislator. Should there be stricto sensu interpretation
of banking activity, limited to that of credit establishments or should it be extended
to include the activity of microfinance? Questions relating to regulation of means of
payment, electronic money and others could be targeted here.
Banking regulation
Reflections here could turn around procedures, techniques of regulation, actors of

regulation insisting on the place of COBAC and its relations with other banking
actors.
The evaluation of the community system of regulation could also be envisaged here
as well as the situation in other countries or sub regions.
Banking integration
Are the ways of banking integration within the CEMAC actually paved? Are we
moving towards a veritable banking union within the CEMAC? What evaluation can
be made of circulation of capital and the free setting up of credit establishments
within the CEMAC? What about the unique approval of credit establishments within
the CEMAC?
Security and stability of the banking system
Questions such as the incidence of international banking crises on the CEMAC

banking system, preoccupations linked to the contribution of the regional banking
system to the fight against money laundry, the contribution of the Guarantee Fund
(FOGADAC) could be discussed.

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BANKING REGULATIONS.

The business of receiving, safeguarding and lending of money is called banking. In

The four different types of accounts provided by banks are as follows:

A Current Bank Account is opened by businessmen who have a higher number of

Fixed Deposit Account

II-1. General objective

II-2. Specific objectives

Specific objectives are as follows:

 To appreciate the level of banking integration within the CEMAC;

Reflections here could turn around procedures, techniques of regulation, actors of

Security and stability of the banking system

Questions such as the incidence of international banking crises on the CEMAC

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