Banque Centrale des Comores (BCC)

Overview

Confidence: 91%

Currency: Comorian Franc (KMF)

Currency Peg: Fixed to EUR (1 EUR = 491.96775 KMF, unchanged since 1999)

Regional Framework: French Franc Zone Member

Governance: Board includes Governor plus French Treasury representation

The Banque Centrale des Comores (BCC) is the monetary authority and chief financial regulator of the Union of Comores, an island nation in the Indian Ocean off the coast of East Africa. Established in 1981, the BCC manages the Comorian franc (KMF) within the French franc zone framework, maintaining a fixed exchange rate to the euro of 1 EUR = 491.96775 KMF, unchanged since January 1, 1999.

The BCC's governance structure is distinctive within African central banking: the Board of Directors comprises the Governor and six appointed administrators (four appointed by the Comorian government, two appointed by the French government). This reflects Comores' special status within the franc zone, where France provides an unlimited and unconditional guarantee of convertibility of the KMF to euros. The BCC defines and implements monetary policy, ensures banking system stability, exercises prudential supervision, and manages payment system operations.

Basic Identity

Classification

Inclusion Justification

What This Entity Oversees

The BCC exercises regulatory authority over the banking sector, supervising approximately 5–7 licensed commercial banks and specialized financial institutions. Supervision operates under a risk-based framework emphasizing capital adequacy, asset quality, management effectiveness, earnings, and liquidity.

Supervisory Functions:

• Licensing and Authorization — Approval of new bank establishment and service expansion
• Capital Adequacy Review — Monitoring compliance with minimum capital requirements
• Prudential Standards Enforcement — Loan classification, provisioning, large exposures limits, and connected lending restrictions
• Risk-Based Supervision — CAMEL assessment of banking institutions
• Onsite Inspections — Regular examinations of banking soundness and compliance
• Offsite Surveillance — Continuous monitoring through regulatory reporting and financial analysis
• Enforcement Actions — Remedial directives, administrative fines, and license suspension/revocation authority

Current Supervisory Priorities:

• Capital adequacy and reserve requirement compliance
• Asset quality and loan loss provisioning
• Banking soundness and depositor protection
• AML/CFT compliance and sanctions screening
• Digital banking and emerging financial services

The BCC enforces a comprehensive anti-money laundering and counter-terrorist financing framework aligned with Financial Action Task Force (FATF) standards and international best practices.

AML/CFT Requirements:

• Customer Due Diligence (CDD) — Mandatory KYC procedures at account opening; identity verification and beneficial ownership documentation
• Enhanced Due Diligence (EDD) — Intensified scrutiny for high-risk customers, politically exposed persons (PEPs), and high-risk jurisdictions
• Suspicious Activity Reporting (SAR) — Mandatory reporting of suspected money laundering or terrorist financing to Financial Intelligence Unit
• Sanctions Compliance — Integration with UN Security Council and national sanctions lists; customer and transaction screening
• Record Retention — Maintenance of transaction records for minimum five years
• Staff Training — Regular compliance training on AML/CFT procedures

Financial Intelligence Cooperation:

The BCC cooperates with the Financial Intelligence Unit and law enforcement agencies on AML/CFT investigations and sanctions enforcement.

Regulatory Powers

The BCC possesses comprehensive enforcement authority to ensure compliance with monetary, banking, and financial sector regulations. Enforcement actions escalate from supervisory guidance to formal sanctions and license revocation.

Enforcement Powers:

• Administrative Fines — Monetary penalties for regulatory breaches
• Remedial Directives — Formal instructions requiring corrective actions
• Cease and Desist Orders — Prohibition of specific activities
• Capital Injections — Directives to increase capital
• Management Actions — Authority to replace directors or senior officers
• License Suspension/Revocation — Withdrawal of banking or financial services license

Regulatory Role and Function

Legal Foundation

The Banque Centrale des Comores operates under its Constituent Law, which establishes its legal status as the monetary authority, governance structure, and operational mandate. The Law grants the BCC exclusive authority to issue and manage the Comorian franc, formulate monetary policy, and supervise the financial sector.

Supporting legal frameworks include:

• Banking Law — Licensing, regulation, and supervision of deposit-taking institutions
• Monetary Cooperation Agreement with France — Framework defining franc zone membership and principles
• Prudential Standards Regulations — Capital adequacy, asset quality, and risk management requirements
• Payment System Regulation — Oversight and regulation of payment and settlement infrastructure
• Anti-Money Laundering Law — AML/CFT requirements and financial intelligence authority

Franc Zone Membership:

The BCC operates within the franc zone framework, governed by four fundamental principles:

1. Convertibility Guarantee — France provides unlimited and unconditional guarantee of KMF-EUR convertibility
2. Fixity of Parities — Fixed exchange rate of 1 EUR = 491.96775 KMF maintained without alteration since 1999
3. Free Transferability — Unrestricted conversion between KMF and EUR within zone
4. Foreign Exchange Centralization — Obligation to centralize foreign exchange reserves with French Treasury at 65%

Licensing and Authorization Relevance

The Banque Centrale des Comores (BCC) is a key licensing authority in Comoros's financial system:

The licensing process typically involves assessment of capital adequacy, fitness and propriety of management, business plan viability, AML/CFT compliance frameworks, and IT systems readiness.

Payments and Money Movement Relevance

The BCC conducts monetary policy within the franc zone framework, with the primary objective of price stability and support for sustainable economic development. The fixed EUR parity eliminates independent monetary policy flexibility; instead, the BCC manages domestic credit conditions and liquidity to complement the fixed exchange rate arrangement.

Monetary Policy Framework:

• Fixed Exchange Rate: EUR 1 = KMF 491.96775 (maintained since January 1, 1999)
• Full Convertibility: Unlimited conversion between KMF and EUR guaranteed by France
• Price Stability Objective: Primary monetary policy target consistent with euro zone monetary conditions
• Reserve Management: Foreign exchange reserves held with French Treasury (65% obligation)

Monetary Policy Instruments:

• Reserve Requirements — Minimum reserve ratios on bank deposits to regulate money supply
• Open Market Operations — Limited OBO capability for liquidity management
• Interest Rate Policy — Alignment with euro zone interest rate conditions
• Credit Regulation — Management of domestic credit expansion

Monetary Policy Committee:

The BCC's Monetary Policy Committee, including the Governor and appointed board members, formulates monetary policy consistent with franc zone principles and coordinates with French central banking authorities on regional monetary conditions.

The BCC operates and oversees the Comorian national payment system, ensuring safe, efficient, and secure payment and settlement infrastructure. The central bank provides banking services to commercial banks, government entities, and other authorized participants through its facilities.

Payment Infrastructure:

• Interbank Settlement System — Real-time or delayed net settlement for bank-to-bank payments
• Check Clearing — Check processing and clearing house operations
• Bank Settlement Accounts — Central bank accounts for authorized banks and government
• Payment Card Schemes — Debit and credit card schemes
• Money Transfer Services — Oversight of domestic and international money transfer operators
• Mobile Money Services — BCC-licensed mobile payment operators

Regulatory Framework:

The BCC has issued guidelines governing:

• Payment system operator licensing and operational standards
• Cybersecurity and data protection requirements
• Consumer protection and dispute resolution
• AML/CFT compliance for payment operators

Comores' foreign exchange regime is anchored to the franc zone arrangement with France, with the BCC managing official foreign exchange reserves and maintaining the EUR peg. The KMF maintains full convertibility to EUR at the fixed rate, guaranteed by France.

FX Reserve Management:

• French Treasury Account — 65% of foreign exchange reserves held with French Treasury (franc zone obligation)
• BCC Reserves — 35% retained for operational liquidity and emergency use
• EUR Holdings — Primary reserve composition to support KMF-EUR parity
• Full Convertibility — Unlimited conversion to EUR at official rate guaranteed by France

Authorized Dealer Supervision:

• Licensing of banks and authorized dealers for FX transactions
• Interbank market surveillance and regulation
• Import/export financing and FX allocation licensing
• Cross-border payment administration

Correspondent banking relationships with French banks and major international commercial banks facilitate cross-border settlement and foreign exchange operations.

Payment Systems Governed or Overseen

The BCC operates and/or oversees the national payment and settlement infrastructure of Comoros. Specific systems include:

[Further detail on specific system names requires verification from official sources]

Relationship to Other Regulators

The BCC actively participates in regional and international financial stability frameworks:

Franc Zone Cooperation:

• French Treasury Coordination — Central role of Franco-Comorian monetary cooperation
• WAEMU Central Banks Network — Participation in West African monetary coordination
• CEMAC Central Banks Cooperation — Coordination with Central African franc zone members

International Participation:

• IMF Article IV Consultations and periodic technical assessments
• World Bank and African Development Bank cooperation
• BIS participation in central bank peer networks
• FATF Mutual Evaluation Reviews and AML/CFT compliance assessments

The BCC maintains close coordination with the French Treasury and Banque de France on monetary policy, foreign exchange management, and financial stability issues.

Geography and Jurisdiction Notes

Important Departments and Divisions

Key Public Resources

Head Office:

• Banque Centrale des Comores
• Moroni, Union of Comores

Telephone: +269-730-0230

Email: [email protected]

Website: www.banque-comores.km

Key Departments:

• Banking Supervision Division
• Monetary Policy Department
• Payment Systems Unit
• International Relations and Cooperation

Governor: Abdallah Mohamed Abdallah (2015–present)

Notes on Naming and Language