Bank Al Maghrib's Sanctions Law: Why So Mysterious?

Rabat – To ensure that credit institutions comply with all the standards put in place, Bank Al Maghrib (BAM) does not hesitate to impose sanctions in case of default. And while the central bank deploys all its effort when it comes to communication and transparency, it does still keep a certain mystery.

The business and media community certainly appreciate BAM’s openness, especially its governor’s, Abdelatif Jouahri regarded as a rockstar in his field. His frankness and spectacular wrath, lately directed at commercial banks amid the dirham liberalization reform, are always something to behold.

However, the central bank seems to have a kink for suspense. This appears to be again the case in its latest report on banking supervision, released Wednesday in Casablanca.

Since 2008 international financial crisis, BAM seems to be determined to not leave anything to chance when it comes to managing banking risks. This includes making sure that commercial banks follow the instaured regulations.

In its latest report on banking supervision, the bank states that “the institutions subject to the control of Bank Al Maghrib have been committed to undertakd corrective actions in the light of the findings made through on-the-spot and on-site checks. Regular monitoring of the timely implementation of remedial measures shall be carried out at a distance on the basis of adjustments transmitted by establishments or, in some cases, by means of on-the-spot checks.”

In 2016, BAM issued 11 disciplinary sanctions against two banks, three finance companies, five micro-credit associations, and one money transfer company. In addition, two monetary penalties were imposed on two banks for non-compliance with regulatory requirements.

Apparently, according to the bank, the sanctioned institutions have not aligned themselves with BAM’s guidelines with regards to combating money laundering, risk-sharing ratios, minimum capital requirements, and financial balances, “among other issues,” the bank adds mysteriously.

However, who are these unruly banks? What did they do? What are the sanctions inflicted? Who are these two banks that already paid the price of their mistakes? Only BAM knows.

The central bank could have followed its alleged policy of transparency and given the names of the institutions. But by omitting their names, all actors involved in this sector become possible suspects.

Not only would BAM have satisfied our hunger for business gossip, it would also have allowed us to know if the central bank is as heavy-handed as its governor’s serious demeanor. In other words, is the punishment worthy of the offense?

Maybe the central bank should take a page out of the book of the Moroccan Capital Market Authority (AMMC). The AMMC never had any qualms in pointing out a guilty finger to the culprits. In its annual report, it does not hide the names of those who dare to infringe the rules of the Casablanca stock market, let alone the fines imposed on them, even if the latter are sometimes quite laughable.

The views and opinions expressed in this article are those of the author and do not represent any institution or entity.