Operational framework and banking control

Credit institutions are bound to comply with a set of prudential, accounting, financial integrity and customer protection standards. Prudential standards, which aim at preserving the liquidity and solvency of credit institutions, are represented as ratios reflecting elements of their assets, liabilities and off-balance. 

In addition to these quantitative rules, credit institutions have to meet quality standards for sound governance and an efficient management of their risks. To this end, they are required to adopt tools for the measurement, control and monitoring of their risks (credit, liquidity, interest rate, market, country risk, concentration and operational risks) and an internal control system, in accordance with the minimum conditions laid down by Bank Al-Maghrib. 

All these standards are based on the ones set by the Basel Committee, an international body in charge of promoting harmonization in terms of prudential banking control. 

Besides, credit institutions have to keep their books and prepare their financial statements in accordance with the chart of accounts of credit institutions. In this context, they have to observe, in particular, rules on the classification and provisioning of loans as issued by circular of Bank Al-Maghrib. 

Credit institutions are also bound by an obligation of financial transparency. Indeed, they have to publish their financial statements prepared on an individual and consolidated basis as well as the minimum information elements, both qualitative and quantitative, regarding their equity and the risks they face in the course of their business. 

Regarding the anti money laundering and counter financing of terrorism, credit institutions are required to establish an internal vigilancedeviceframework in accordance with Law No. 43-05, as amended and supplemented, and by virtue of the texts adopted pursuant thereto. 

To ensure compliance with all of these regulatory standards, the control exercised by Bank Al-Maghrib is based, in line with the standards for banking supervision, on two approaches: the permanent control, carried out on the basis of documents submitted by credit institutions and on-site inspection, performed on a regular basis during missions conducted within these institutions. 

To oversee the banks’ international activities, particularly in the African continent, Bank Al-Maghrib has a cross-border risk monitoring framework. Cooperation agreements concluded with the supervisory authorities of the host countries are one of the essential elements of this arrangement.

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