BCT: new circular on governance of banks promulgated soon | Tunisia News Gazette

BCT: new circular on governance of banks promulgated soon

“The Central Bank of Tunisia is preparing to issue, at the beginning of the second half of 2018, a new circular on the governance of banks, defining more precise criteria for good governance practices”, director general for banking supervision at the BCT Nadia Gamha said on Monday.

“More than 5 years after the entry into force of the BCT Circular on good governance and more than a year and a half after the promulgation of the banking law, the observation is that virtually all banks have complied at the purely formal level to the requirements of governance regulation.

On the other hand, in terms of practice, much remains to be done. And this is the reason why the BCT decided to promulgate the new circular, “she explained at a panel discussion held in Tunis by the Tunisian Institute of Strategic Studies on “the Governance of Tunisian Banks “.

In concrete terms, “under the new circular, boards will be more involved in risk management.

It will also define more precise criteria for the selection of independent directors given the importance of their role since they chair the Risk Committee and the Audit Committee.

The circula will also impose an external evaluation of the work of the boards of directors and the performance of each member of these boards by an external firm.”

In his remarks, Minister adviser to Prime Minister Faycal Derbel, mainly talked about the gap between the financial performance of banks – often related to factors other than governance and their organisational performance whose effectiveness remains to be checked.

Referring to the research conducted in this direction, Derbel pointed out that “the internal governance mechanisms of banks have not ensured their role of control and guarantors of the good management of banks but have contributed to imprudent management of credit risks”.

To improve the governance of banks, Derbel recommended “complementing the existing regulatory arsenal and the banking law of 2016 with a circular that should clarify the vagueness of the law, submit banks to an external rating system of their governance system, increase the number of independent directors and cancel the prohibition on accountants having access to the positions of independent directors “

He also proposed to “set clear and objective criteria for eligibility for the position of director, to better clarify situations of conflict of interest, to better control the attendance of directors, to set an age limit and to strengthen women’s presence in the boards.”

Soure: TAP News Agency

At his meeting Thursday with President of the High Council of State of Libya, Khaled
At his meeting Thursday with President of the High Council of State of Libya, Khaled