The Central Bank of Tunisia (BCT) has just published a new circular to banks and financial institutions under number 2021-05 and which was presented by the issuing institution as aimed at strengthening the rules of governance in the sector.

This circular, which defines a more exhaustive governance framework for banks and financial institutions inspired by international best practices, replaces the first circular published in 2011 which was a strong signal sent by the BCT to the market according to which the restructuring guideline in the banking sector inevitably requires sound, prudent, transparent and responsible management of banks, says the BCT.

According to the bank, this overhaul, which strengthens the contributions of the first circular and enshrines the requirements of Law No. 2016-48 on governance, ultimately aims to pave the way for the banking sector to accelerate the already structuring reforms. committed by the BCT towards more efficiency, innovation and resilience.

It goes without saying that the success of this reform process requires a strong involvement of the banks’ governance bodies in strategic steering and risk management in order to meet the major challenges they are facing, in this case the requirements of convergence towards new risk management standards as well as issues related to technological innovation and the digitization of financial services, assures the issuing body.

Result of a wide consultation process with the profession and experts, the development of the new circular was guided, according to the BCT, by the principles of proportionality, balance of powers, as well as transparency. The contributions of this circular cover, to this end, essentially the establishment of a real risk culture, the promotion of the culture of gender diversity and the establishment of a clear appointment process and a remuneration of the first managers in line with the bank’s performance.

It was also underlined that the BCT is working for the consecration of additional principles of governance specific to institutions carrying out Islamic banking operations with a view to strengthening the transparency and confidence of operators and the consecration of the principles of social economic responsibility and consumer protection in bank management.

The BCT also asks banks and financial institutions to draw up a roadmap guaranteeing compliance with the provisions of the circular under the best possible conditions.

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Ref: https://www.tunisienumerique.com