Bank payment systems are the networks, processes, and rules that transfer monetary value between financial institutions, businesses, and consumers. They include retail systems for everyday purchases, wholesale systems for high-value interbank settlements, and international clearing networks.
Interbank payment systems are the foundational networks that allow financial institutions to securely clear and settle transactions on behalf of their customers or for their own accounts. They move trillions of dollars daily, operating via distinct processing methods, and form the backbone of both domestic and global finance.
INTERBANK PAYMENT SYSTEMS IN CAMEROON AND CEMAC
An interbank payment system, as defined in the regulation (REGLEMENT-N-03-CEMAC-UMAC-CM-du-21-décembre-2016), is a national or international procedure organizing the relationship between at least two participants, enabling the routine execution of transfer orders, whether through clearing or not.
The following may be considered participants within the meaning of Article 253: credit institutions, the institutions defined in the first three paragraphs of Article II of Annex A to the Convention of 17 January 1992 on the Harmonization of Banking Regulations in the States of Central Africa, clearing houses, central counterparties, and any legal entity authorized for this purpose by the Bank of Central African States.
The system, as defined in Article 253 of the law, must have been established by a decision of the Bank of Central African States or be governed by a framework agreement signed between the participants after approval by the Bank of Central African States. This decision or framework agreement defines the operating rules of the system.
When preventive settlement, receivership, or liquidation proceedings are initiated against a participant in an interbank payment system as defined in Articles 253 and 255 of the law, the rights and obligations arising from or related to their participation in said system are exclusively determined by the law governing the system, as defined in the system's operating rules.
The system's operating rules define the rules of evidence applicable to transactions within the system. Evidence of a transfer order cannot be dismissed solely on the grounds that it consists only of a computer record.
Transfer Order
A transfer order is an instruction given by a participant to make available to another participant in the system, as payment or guarantee, a sum of money, securities, valuables, effects or receivables through an entry in the books of a credit institution, or the Central Bank.
Clearing House
A clearing house is an entity responsible, within an interbank payment system, for registering and clearing transactions between two or more participants, and for determining and settling their net position.
With authorization from the Central Bank and subject to additional specific approval issued by the COBAC (Central African Banking Commission), the clearing house function may be performed by an existing credit institution, or by a legal entity created for this exclusive purpose and authorized as a credit institution in one of the Community's member states, in accordance with Article 12 of the Annex to the Convention of January 17, 1992, on the Harmonization of Banking Regulations in the States of Central Africa.
The clearing house function may be performed by the Central Bank.
Central Counterparty
A central counterparty is a legal entity that acts as an intermediary between the participants in a system and as the exclusive counterparty for these participants with regard to their transfer orders.
A central counterparty must be authorized as a credit institution.
The central counterparty may act as a clearing house/system, under the conditions defined in Article 259 of the Regulation.
Multilateral Clearing
Multilateral clearing is the settlement of obligations that a group of counterparties, the participants in a payment system, have towards each other, by a clearing house determining the overall net position of each of them vis-à-vis all the others, this net position alone being the subject of a payment.
Bilateral Clearing
The overall net position of each participant results, on the one hand, from all bilateral clearing transactions with the other participants and, on the other hand, from the application of the joint and several liability provided for in Article 263 of the law, from which it benefits from those other participants who owe it money as a result of bilateral clearing.
Liability of Participants in an Interbank Payment System
The settlement of a participant's overall net position is carried out on the instructions of the clearing house by debit or credit to the settlement account referred to in Article 264 of the law.
The counterparties and the clearing house are bound by a "clearing agreement" that meets the conditions set forth in Article 255.
Unless otherwise decided by the BEAC or stipulated in the framework agreement establishing the system, each participant is jointly and severally liable for the settlement of the net debit balance of each of the other participants.
The joint and several liability of each participant is limited to the amount of the net debit balance owed to each of the other participants, as a result of bilateral set-off, for participation in the system's operations.
Every participant in an interbank payment system is required to have a current account, called a "Settlement Account," with an authorized intermediary or with the BEAC (Bank of Central African States).
The Settlement Account is used exclusively for settling the participant's transactions within the interbank payment system.
The participant's Settlement Account may not be subject to any enforcement measures, including seizures, except in accordance with the terms defined by the framework agreement governing the payment system.
Notwithstanding any provision to the contrary, transfer orders entered into an interbank payment system in accordance with the system's operating rules are binding on third parties and the body of creditors and cannot be cancelled until the expiry of the day on which a judgment is rendered initiating preventive settlement, receivership, or liquidation proceedings against a participant, even on the grounds that such a judgment has been issued. This also apply to transfer orders that have become irrevocable.
The point at which a transfer order becomes irrevocable within the system is defined by the system's operating rules.
Notwithstanding any provision to the contrary, clearing carried out in a clearing house, in compliance with the operating rules of the relevant interbank payment system, is enforceable against third parties and the body of creditors and cannot be annulled solely on the grounds that a judgment has been rendered initiating preventive settlement, receivership, or liquidation proceedings against a participant in said system.
Article 266 of the regulations applies to transfer orders in an interbank payment system resulting from calculations by the clearing house of that system, carried out between participants and the central counterparty, and between the central counterparty and a central counterparty of another system or with the Central Bank.
Notwithstanding any provision to the contrary, when preventive settlement, receivership, or liquidation proceedings are initiated against a participant in an interbank payment system, the framework agreement governing the system may provide for the automatic revocation of pending transactions related to participation in the system and the automatic offsetting of reciprocal claims and debts arising from such participation.
The automatic revocation and offsetting are enforceable against third parties, attaching creditors, and the body of creditors.
INTERBANK GUARANTEES IN CAMEROON AND CEMAC
Repurchase Agreement
For the purposes of this Regulation, a repurchase agreement (repo) is a transaction whereby a credit institution or one of the institutions defined in the first three paragraphs of Article 4 of the Annex to the Convention of 17 January 1992 on the Harmonization of Banking Regulations in the States of Central Africa transfers full ownership of securities, bonds, or public or private instruments to the Central Bank for an agreed price. The transferor and the transferee undertake, respectively and irrevocably, to take over the transferred assets and to resell them at an agreed price and on an agreed date.
The repo is enforceable against third parties upon delivery of the securities.
Securities, bonds, or instruments that are transferred by delivery are considered delivered if, at the time the repo is entered into, they are specifically and physically delivered to the transferee or its agent. Regarding negotiable instruments, they must be endorsed in advance in accordance with Article 92 of the law.
Securities, instruments, or other instruments transferred by account entry are considered delivered if, at the time of the repurchase agreement, they are recorded in an account opened in the name of the transferee.
At the term stipulated in the agreement for the repurchase, the transferor pays the agreed price to the transferee, and the latter transfers back the assets subject to the repurchase agreement.
If the transferor fails to pay the repurchase price, the assets in question remain the property of the transferee, and if the transferee fails to transfer the assets in question, the proceeds of the transfer remain the property of the transferor.
Debts and receivables related to repurchase agreements, governed by a framework agreement approved by the BEAC (Bank of Central African States) organizing relations between more than two participants, are offset according to the terms stipulated in said framework agreement.
This framework agreement may provide for the automatic revocation of all repurchase agreements mentioned in the preceding paragraph, and the offsetting of reciprocal receivables and debts existing under the repurchase agreement and participation in an interbank payment system when one of the parties is subject to preventive settlement proceedings, receivership, or liquidation.
Articles 253 to 272 of the law are applicable, notwithstanding any provision to the contrary, in particular governing collective proceedings for preventive settlement, judicial reorganization or liquidation of assets, opened against the submitting participant.