Cross-border supervision

The three most important Moroccan banking groups have developed an international retail banking activity, mainly in the African continent, through subsidiaries and branches.  

Bank Al-Maghrib's supervision of these activities is governed by an internal Cross-Border Supervision policy based on cooperation with the host countries supervisory authorities. 

In this context, agreements are concluded between Bank Al-Maghrib and its counterparts abroad in the sphere of banking supervision and exchange of data. The agreements aim to: 

• Organizing the exchange of data that is useful for the effective performance of their missions
• Setting up colleges of supervisors to coordinate the supervisory actions of Moroccan credit institutions having subsidiaries or branches abroad
• Carrying out on-site inspection of banks’ subsidiaries or credit institutions’ branches located in the territory of each of the parties
• Setting up coordination and intervention methods pertaining to settlement of crises that are likely to affect the subsidiaries or branches located in the territory of each of the parties.

Agreements are concluded with the West African Economic and Monetary Union (WAEMU), the Central African Banking Commission (COBAC), the Central Bank of Tunisia, the Central Bank of the Republic of Guinea, the Supervision Authority of the Republic of Madagascar, the Supervision Authority of Djibouti, the French Prudential Supervision and Resolution Authority (ACPR) and the China Banking Regulatory Commission (CBRC).

In accordance with the recommendations of the Basel Committee, Bank Al-Maghrib has been organizing, since 2014, meetings of supervisory colleges of the three banking groups. These colleges provide a framework for information exchange and a forum for consultation between the supervisory authority of the home country and host country concerning the risk profile of the entities established under their jurisdictions and supervision actions to be carried out, if need be.

Besides the periodic exchanges of information with its counterparts, Bank Al-Maghrib places special emphasis on the control operations carried out jointly with these authorities on the subsidiaries of these banking groups.  

As part of the consolidated supervision of the main banking groups, Bank Al-Maghrib requires a specific reporting on the activities of their banking subsidiaries abroad, including the data necessary to assess the quantitative and qualitative risks involved. 

To streamline the follow-up of these branches and subsidiaries, Bank Al-Maghrib implements a scoring approach, reflecting the subsidiary's weight in the group, its risk indicators, profitability, capitalization, country risk level and the assessment of its regulator.   

This system is complemented by a follow-up of the supervision carried out by Moroccan banks on their subsidiaries abroad.  

Additionally, any project aiming to create or acquire subsidiaries abroad or to strengthen the participation of Moroccan banking groups in banks located abroad is subject to prior authorization by Bank Al-Maghrib. This approval is also required in case of indirect equity participation in entities existing or being created abroad. 

Besides, in order to ensure a sound and coordinated development of these three groups in Africa, Bank Al-Maghrib has encouraged these groups to adopt a code of good conduct and cooperation with regard to setting up their branches or subsidiaries overseas.

An Africa Committee, composed of Bank Al-Maghrib and cross-border banking groups, was set up to ensure compliance with the provisions of this code. The committee aims also to:

1. provide updates  on the presence of Moroccan banks in the continent in terms of market share, network and financial inclusion;
2. examine the evolution of the macroeconomic and macro-financial conditions of the countries where the branches or subsidiaries are implemented;
3. follow-up the development of the activity of the subsidiaries or  branches of these groups in Africa;
4. Discuss the risks involved and the measures to be taken to alleviate them.

This committee meets with the Governor of Bank Al-Maghrib and the Chief Executive Officers of the banking groups, and with the Banking Supervision Department and the General Managers of these groups.