The principal laws and regulations governing the banking sector are:

• the Framework law on banking regulation (BCEAO) (Loi cadre portant réglementation bancaire (BCEAO));
• Law No 2025-03 of 19 February 2025 on banking regulations; and
• the Collective Agreement on Banks and Financial Institutions in Senegal (Convention collective des banques et établissements financiers au Sénégal).

The regulator responsible for supervising banks in Senegal is the Banque Centrale des Etats d’Afrique de l’Ouest (the Main Agency of the Central Bank of West African States) (hereinafter the “Central Bank” or the BCEAO).

The Authorisation Requirement and the Process for Applying for Authorisation

In Senegal, the banking authorisation regime is regulated by the Banking Law of 2025.

According to this Law, no one may engage in banking activities or present themselves as a bank, financial institution, payment institution, electronic money institution or fintech without obtaining prior authorisation and being registered on the official list.

However, certain transactions remain authorised without authorisation for companies, in particular:

• the granting of payment terms or advances between contractors;
• leasing with an option to purchase;
• cash transactions between related companies;
• the issue of securities or debt instruments; and
• the issue of payment instruments intended for the purchase of goods or services from the issuing company.

The Law of 2025 on banking provides for exemptions to the banking monopoly.

Microfinance institutions may carry out certain banking operations within the limits set by their regulations.

The BCEAO may grant fintech companies a temporary exemption via its Financial Innovation Laboratory, allowing them to test banking services under specific conditions.

Financial companies and multilateral development banks are not subject to the prohibition on using the terms “bank”, “banker”, “financial institution”, “payment institution”, “electronic money” or “fintech” in their name or activity.

To obtain banking approval in Senegal, Banking Law 2025 requires:

• legal form – banks must be public limited companies with fixed capital or co-operatives with variable capital. Other institutions may also be incorporated as limited liability companies. Single-member companies are excluded;
• a head office – which must be located in a WAEMU member state, as must the governing bodies;
• share capital – a minimum amount, set by the WAEMU Council of Ministers, must be fully paid up in cash and invested in the WAEMU zone; and
• shareholders – shares must be registered, and no shareholder may exceed the ownership threshold set by the BCEAO. Institutions of a certain size must be listed on the Bourse Régionale des Valeurs Mobilières SA (Regional Securities Exchange SA) (BRVM), written in simple but legal French.

The procedure for applying for banking authorisation in Senegal is supervised by the central bank and the UMOA Banking Commission. It begins with the submission of an application addressed to the Senegalese Minister of Finance and registered with the central bank, which verifies that the application complies with legal requirements, particularly in terms of legal form, share capital, governance, financial viability of the project and origin of funds. The central bank then examines the application, assessing its financial soundness, transparency, management quality and anti-money laundering measures.

Authorisation is then granted by order of the Senegalese Minister of Finance, after a favourable opinion from the Banking Commission, and may be limited to certain operations. Once authorisation has been obtained, any significant changes must be notified to the Banking Commission. The authorised institution is included on the official list of authorised financial institutions, published in the Official Gazette of the Republic of Senegal and on the Commission’s website. Finally, the institution must commence operations within one year of the authorisation decision, failing which the authorisation will be withdrawn.

Activities and Services Covered, and Restrictions on Licensed Banks’ Activities

The Banking Law of 2025 defines the operations that banks and authorised institutions are permitted to carry out.

Operations authorised for banks and financial institutions

Banks are authorised to carry out all banking operations, namely the receipt of funds from the public, credit operations and the provision of payment facilities to customers or the management of payment methods (Article 21-22).

Financial institutions are authorised to carry out one or more banking operations in accordance with the conditions and limits defined by their licence. They may only accept deposits with the prior authorisation of the Minister of Finance, after approval by the Banking Commission. The conditions and procedures for the exercise of the activities of financial institutions are set by the Central Bank (Article 22).

Operations authorised for payment institutions

Payment institutions are authorised to provide, as their usual business, one or more payment services, namely:

• cash deposits or withdrawals and account management operations;
• the execution of the following payment operations:
1. single or standing orders and direct debits; and
2. payment transactions made with a payment card or similar device;
• fund transfer transactions;
• payment transactions made by any means of communication;
• the issuance of payment instruments and/or the acquisition of payment transactions;
• payment initiation services; and
• account information services,

in accordance with the conditions and limits defined by their authorisation.

Transactions executed by payment institutions are linked to a payment account.

The conditions and procedures for the exercise of the activities of payment institutions are set by the Central Bank (Article 24).

Operations authorised for electronic money institutions

Electronic money institutions are authorised to issue and distribute, as their usual business, electronic money – ie, any monetary value representing a claim on the issuer, which is:

• stored in electronic form, including magnetic form;
• issued without delay against the deposit of funds of an amount not less than the monetary value issued; and
• accepted as a means of payment by natural and legal persons other than the issuer of the electronic money.

Transactions carried out by electronic money institutions are linked to an electronic money account.

The terms and conditions governing the activities of electronic money institutions are set by the Central Bank (Article 25).

However, there are some transactions that banks and authorised institutions are prohibited from carrying out.

Credit institutions, particularly banks and financial institutions, are not permitted to:

• directly or indirectly grant loans to related parties, auditors and staff for a total amount exceeding a percentage of their actual own funds, as set by prudential regulations;
• engage, on their own behalf or on behalf of others, in commercial, industrial, agricultural or service activities, except to the extent that such operations are necessary or incidental to the conduct of their banking business or essential to the recovery of their claims, taking into account the limits set by prudential regulations;
• grant loans against the pledge of their own shares; and
• acquire or hold holdings in the form of listed shares in a single company the value of which exceeds a threshold defined by the Central Bank.

Payment institutions are prohibited from:

• disposing of payment service users’ funds for their own account; and
• using funds from a payment account to make investments on behalf of the customer.

Electronic money institutions are prohibited from granting credit services to their customers in any form whatsoever or from paying interest on funds received in exchange for electronic money units issued. However, funds originating from a loan granted to a customer by a bank or microfinance institution may be used to issue electronic money.

The Central Bank may prohibit authorised institutions from entering into partnerships that include an exclusivity clause for the provision of one or more services, or prohibit authorised institutions from conducting activities or carrying out transactions that could compromise the stability of the WAEMU financial system.

However, following approval by the Banking Commission, the Minister of Finance may grant individual and temporary exemptions to authorised institutions for prohibited transactions.

Common Ancillary Activities of Banks and Additional Authorisation/Requirements (MiFID II, MiCAR)

Banks and authorised institutions may carry out operations considered to be related to their activities.

Subject, where applicable, to compliance with authorisations and other specific legislative and regulatory provisions relating to the exercise of certain activities or professions, credit institutions are authorised to carry out the following transactions, which are considered to be related to their activities:

• transactions involving gold and precious metals;
• manual or book-entry foreign exchange transactions;
• transactions relating to the investment, subscription, purchase, management, custody and sale of securities and any financial product;
• transactions involving the acquisition of and participation in existing or newly formed companies, subject to compliance with the provisions of Articles 51 and 52 and within the defined prudential limits;
• advisory and assistance services in the areas of asset management, financial management, financial engineering and, in general, any transaction intended to facilitate the creation and development of companies, in particular the search for financing and partners; and
• intermediation operations as commission agents, brokers, insurance service providers or otherwise in all or part of the banking operations and operations referred to in this article.

Payment institutions may, for their part, carry out foreign exchange transactions, custody services and data recording and processing, which are considered to be related to their activities (Article 24).

Electronic money institutions may provide payment services, which are considered to be operations ancillary to their activities (Article 25).

Obtaining a European Passport (Branches, Cross-Border Services)

The Banking Law of 2025 does not mention obtaining a European passport to provide cross-border services, to open branches or generally exercise banking activities in Senegal.

When a foreign entity wishes to carry out banking or auxiliary activities, particularly on the regional financial market, it must obtain authorisation to do so.

However, no person may direct, administer or manage an authorised institution or one of its branches if they do not have Senegalese nationality or that of a West African Economic and Monetary Union (WAMU) member state, unless they enjoy assimilation to Senegalese nationals by virtue of an establishment agreement. The Minister of Finance may grant individual exemptions, with the approval of the Banking Commission. Executives for whom a waiver is sought must hold at least a Master’s degree or an equivalent diploma and have at least five years’ professional experience in banking, finance or any other area of expertise deemed compatible with the duties envisaged. Any manager or director who has obtained a waiver of the nationality requirement to work in a credit institution in a WAMU member state is not required to apply for a new waiver when changing position, in any other authorised WAMU institution.

For directors, a new exemption is required to perform the duties of a manager of an authorised WAMU institution.

The Nature of Regulatory Filings and Ongoing Requirements

During the life of a bank, operations that have a significant impact on its shareholder structure are governed by Articles 53 to 55 of the Banking Law of 2025.

To this end, merger operations by absorption or creation of a new company or demerger are subject to prior authorisation by the Minister of Finance. Moreover, under Article 53, any acquisition or transfer of a holding that would have the effect of raising the holding of any one person (directly or through an intermediary) or of any group of persons acting in concert, first above the blocking minority, then above the majority of voting rights in the credit institution, is subject to the same obligation of prior authorisation by the Minister of Finance; also, any acquisition or transfer of a holding that would have the effect of lowering the holding below those thresholds is subject to the same requirement.

The new Banking Law adds that any transfer by an institution of more than 20% of its assets corresponding to its operations, or any management or cessation of all its activities, or any opening of an Islamic window in the Republic of Senegal, is also subject to the same obligation. The same applies to the opening of a representative office within the WAEMU by a foreign institution.

For the purposes of this law, the majority of voting rights and the blocking minority are set at half of the votes plus one and one third of the voting rights plus one, respectively.

Under Article 53, the creation of a branch or subsidiary located outside the WAEMU, as well as any transfer of assets of that subsidiary or any acquisition of a stake in a company representing more than 10% of the share capital of the issuing entity or any transfer of more than 10% of the assets of a subsidiary located in the Union, are subject to prior authorisation by the Banking Commission.

In addition, banks and authorised institutions with their registered office abroad are required to notify the Banking Commission of any operation referred to above that concerns them.

Pursuant to Article 2 of Instruction No 19-12-2011 of 27 December 2011 establishing the list of Documents and Information Constituting the Prior Authorisation File for the Modification of the Shareholding Structure of Credit Institutions (the “Instruction”), the prior authorisation file must be submitted in four copies to the central bank of the member state in which the credit institution is located, following the format provided for in Annex 2 of the Instruction, and it must include a written request addressed to the Minister of Finance of the Republic of Senegal, as well as the documents and information listed in Annex 1 of the Instruction.

The application for prior authorisation, which is processed in the same way as for authorisation, is addressed to the Minister of Finance and filed with the National Directorate of the BCEAO. Authorisation from the Minister of Finance, after receiving the assent of the Banking Commission, is required before the planned operation is carried out.

The Nature of the Ongoing Requirements Towards the Supervisor

The nature of the ongoing requirements towards the supervisor refers to the ongoing obligations that an authorised institution must meet vis-à-vis the supervisory authority, in this case the Central Bank or the Banking Commission, as part of its operations. These requirements are in place to guarantee the stability, transparency and compliance of financial activities with the regulations in force.

Authorised institutions are required to submit regular financial and operational reports to enable the supervisor to monitor their financial health.

They must also comply with the laws and regulations in force, including rules on governance, risk management and customer protection.

In addition, authorised institutions must maintain sound internal control systems to prevent the risk of failure and protect depositors and the financial system in general.

Lastly, the supervisory authorities may carry out audits or inspections to verify the institution’s compliance with regulatory requirements.

Under Senegalese legislation, corporate governance requirements are also regulated by the Banking Law of 2025.

The following conditions apply to banks.

• Banks may be incorporated in two legal forms, namely as:
1. public limited companies with fixed capital (société anonyme); or
2. co-operative or mutual companies with variable capital after special authorisation by the Minister of Finance.
• They cannot take the form of a one-person company.
• Exceptionally, they may take the form of other legal entities.
• They must have their registered office in the territory of one of the member states of the WAEMU.

The following conditions apply to financial institutions.

• Financial institutions may be incorporated as:
1. public limited companies with fixed capital;
2. limited liability companies (société anonyme); or
3. co-operative or mutual companies with variable capital.
• They cannot take the form of a one-person company.
• They must have their registered office in the territory of one of the member states of the WAEMU.

Under Senegalese law, credit institutions are required to establish a corporate governance mechanism in line with good practice and adapted to their size, their structure, and the nature and complexity of their activities (Article 4 of Circular No 01-2017/CB/C of 27 September 2017 relating to the Governance of Credit Institutions and Financial Companies in the WAEMU).

The registration and oversight of directors and senior management is generally regulated by the Banking Law of 2025 and more specifically by Circular No 02-2017/CB/C of 27 September 2017 on the Conditions of Exercise of the Functions of Directors and Officers in Credit Institutions and Financial Companies of the WAEMU.

The provisions of the Banking Law of 2025 regulate the status of directors and require the directors to be of Senegalese nationality or of the nationality of one of the other member states of the WAEMU.

However, the Minister of Finance may, on advice of the Banking Commission, grant individual exemptions to the nationality requirement. In such a case, a director must hold at least a Master’s degree or an equivalent diploma and must have at least five years of professional experience in the banking sector, finance sector or any other field relevant to the functions envisaged (Article 61, Law of 2025).

The granting of individual exemptions from the nationality requirement takes into account the criteria set out in Articles 61, 62 and 63, as well as the need to ensure sufficient representation of WAEMU nationals within the governing bodies.

In order to obtain an individual exemption to the nationality requirement, the credit institution must send to the Minister of Finance a request for approval specifying:

• the full identity and nationality of the person for whom the exemption is requested;
• the relevant position;
• the reason for using a non-WAEMU national to fill the position; and
• for the profiles of management positions other than chief executive officer and deputy chief executive officer, a formal indication by the credit institution that the proposed employment contract does not raise any objections from the national employment authorities.

The request sent to the National Directorate of the BCEAO must contain the following documents:

• an extract from the criminal record of the person concerned;
• a declaration on honour;
• official documents establishing the identity and nationality of the person concerned;
• a detailed curriculum vitae indicating the training received and the acquisition of at least five years’ professional experience in the field of banking, finance or any other field of competence deemed compatible with the duties envisaged;
• the precise addresses of previous employers;
• copies of the required diplomas;
• the draft employment contract for executives, except for the chief executive officer and the deputy chief executive officer; and
• a conflict of interest declaration.

Persons involved in the direction, administration, management, stewardship or control of authorised institutions and financial companies are bound by professional secrecy. This secrecy covers all information relating to the operations and activities of these entities, as well as all information brought to their attention in the course of their duties (Article 68).

The Individuals Subject to the Remuneration Requirements

Under Senegalese law, employees of banks are bound by the provisions of the Senegalese Labour Code and the provisions of the Interprofessional National Collective Agreement, as well as by the specific provisions of the Collective Agreement on Banks and Financial Institutions in Senegal.

In fact, under Senegalese labour law, employees are classified into different categories, which correspond to different remuneration scales. The Collective Agreement on Banks and Financial Institutions provides for specific classifications of bank employees according to the job they hold. As such, bank employees are classified into:

• workers and employees, further classified into seven different subcategories;
• agents, classified into four subcategories; and
• executives, classified into four subcategories.

Relevant Remuneration Principles

Depending on the category into which the bank or financial institution employee is classified, a specific remuneration is provided for by the Ministry of Labour, which sets up the categorical salary scales in the private sector. The basic salaries provided for by the Ministry for the different categories are mandatory and cannot be reduced by the employer.

Diversity Requirements

There is no specific legislation on diversity on bank boards of directors, the role of women in bank management, equity and inclusion, or even on gender, ethnicity and sexuality. However, some banks include provisions in their internal policies to promote or eradicate certain issues that affect diversity within these companies.

The Bankers’ Oath or Equivalent Binding Rules of Conduct for Bank Employees

Articles 62, and 69 of the Banking Law of 2025 establish strict prohibitions for managers and employees of authorised institutions, similar to an oath of probity. The purpose of these provisions is to prevent anyone convicted of serious crimes (such as forgery, fraud, corruption or money laundering) from holding a management or executive position in a credit institution.

Prohibitions for managers (Article 62) – any conviction for serious crimes or offences (such as forgery, theft, fraud, breach of trust, corruption, money laundering or damage to the credit of the state) automatically results in:

• a ban on directing, administering or managing an authorised institution;
• a ban on carrying out certain regulated activities;
• proposing the creation of an authorised institution; or
• acquiring a stake in the capital of an authorised institution.

These prohibitions apply in the event of attempted or complicit offences and extend to convictions or bankruptcies pronounced abroad, as well as to directors or administrators suspended or dismissed by the WAEMU Banking Commission by another WAEMU financial sector supervisory authority or by a foreign authority.

Prohibitions on managers and on employment in authorised institutions (Article 69) – use confidential information that has come to their knowledge in the course of their work to carry out, directly or indirectly, transactions for their own account or for the benefit of other persons.

That being said, bank secrecy is not enforceable against the Banking Commission, the Central Bank or a judicial authority acting in the context of criminal proceedings or against the authority responsible for macroprudential supervision in the Union in the context of the implementation of its regulated powers (Article 68, Banking Law of 2025).

According to the above-mentioned provisions, a breach of bank secrecy and breach of confidential information are punishable by imprisonment for one month to two years and/or a fine of XOF50–200 million. In the event of a repeat offence, the maximum penalty is increased to five years’ imprisonment and a fine of XOF300 million.

These rules impose irreproachable conduct on bank managers and employees, with the aim of guaranteeing the reliability and integrity of authorised institutions.

The legislation in force in Senegal against money laundering is composed of national laws and community and international standards. In this regard, it should be noted that the reference national law is Law No 2018/03 of 23 February 2018 on the fight against money laundering and terrorist financing, which transposes into domestic law the Uniform Anti-Money Laundering Bill adopted by Decision No 26/CM/WAEMU of 2 July 2015 (the “AML/CFT Law”).

Persons subject to AML/CFT obligations are listed in Articles 5 and 6 of the AML/CFT Law, including financial institutions.

The AML/CFT Law introduced a risk-based approach, requiring financial institutions to have policies of procedures and internal controls to effectively mitigate and manage AML/CFT risks. Articles 23 and 24 of the AML/CFT Law impose several obligations, including:

• the centralisation and retention of information on the identity of customers, principals, agents and beneficial owners;
• the monitoring of suspicious transactions;
• the appointment of internal managers responsible for the application of anti-money laundering programmes;
• the continuous training of personnel;
• the implementation of an internal control system for the effective application and effectiveness of the measures adopted to control risks; and
• the implementation of measures relating to the detection of unusual or suspicious transactions and compliance with the obligation to report suspicions to the National Financial Intelligence Processing Unit.

In addition to the obligations listed above, banks have an obligation of vigilance with respect to their customers. Indeed, the law obliges banks to have up-to-date knowledge of all their customers, including their income and assets, and to monitor their operations. In this respect, Article 18 of the AML/CFT Law provides the following: “Before entering into a business relationship with a customer or assisting them in the preparation or execution of a transaction, the persons mentioned in Articles 5 and 6 of this Law shall identify the customer and, where applicable, the beneficial owner of the business relationship by appropriate means and shall verify these identification elements on presentation of any reliable written document.” Article 19 of the AML/CFT Law provides the following: “Before entering into a business relationship with a customer, the persons referred to in Articles 5 and 6 of this Law shall collect and analyse the items of information, from among those included in the list drawn up for this purpose by the supervisory authority, that are necessary for the knowledge of their customer as well as the purpose and nature of the business relationship, in order to assess the risk of money laundering and terrorist financing.”

In addition, financial institutions, when entering into a business relationship or conducting transactions with or on behalf of foreign politically exposed persons (PEPs), are required to take specific measures to:

• implement adequate and appropriate risk-based procedures to determine whether the customer or a beneficial owner of the customer is a PEP;
• obtain authorisation from the appropriate level of management before entering into a business relationship with the customer;
• take any appropriate risk-based measures to establish the origin of the assets and the source of the funds involved in the business relationship or transaction; and
• ensure enhanced ongoing monitoring of the business relationship.

Lastly, financial institutions are required to identify and assess the risk of money laundering or terrorist financing, which may result from:

• the development of new products and business practices, including new distribution methods; and
• the use of new or emerging technologies, related to new or existing products (Article 37 of the AML/CFT Law).

Failure to comply with these procedures exposes the institution to the administrative, disciplinary and criminal sanctions provided for in Articles 112 et seq of the AML/CFT Law.

The Deposit Guarantee Scheme (DGS) in the WAEMU, including Senegal, is governed by the 2025 Banking Act which refers to it as the Deposit Guarantee and Resolution Fund, and by specific WAEMU decisions, in particular Decision No 088-03-2014 of 21 March 2014, the Articles of Association of the Depositors’ Guarantee Fund (FGD), and Decision No 009 of 30 June 2017/CM/UEMOA. These texts define the membership, financing and compensation arrangements for depositors in the event of bank failure.

Creation and Operation of the FGD (Decision No 088-03-2014)

The Deposit Guarantee and Resolution Fund in the WAEMU guarantees the deposits of customers of member institutions and may participate in financing their recovery or resolution.

Decision No 088-03-2014 establishes the FGD, responsible for protecting savers in the event of the failure of a banking institution, thereby strengthening financial stability and confidence in the WAEMU banking system.

The FGD’s mission is to compensate depositors while contributing to the stability of the banking sector.

Compulsory Membership and Contributions

Authorised institutions authorised to collect deposits within the WAEMU shall, upon receiving their authorisation under the conditions set out in Article 40, join the Deposit Guarantee and Resolution Fund in the WAEMU, referred to in this law as the Fund.

Contribution Rate and Compensation Limit

The Fund shall compensate depositors up to a ceiling set by the WAEMU Council of Ministers and shall define the terms and procedures for compensation.

The Fund shall be subrogated to the rights and actions of compensated depositors within the limits of the compensation amounts paid to them.

Member institutions shall provide the Fund with the necessary information concerning compensable deposits in accordance with the deadlines and procedures it sets in this regard.

Decision No 009-2017 sets the annual contribution rate for members to feed the FGD, ensuring that the fund has sufficient resources to cover deposits in the event of a banking crisis. It also defines the compensation ceiling per depositor in the event of default, guaranteeing the protection of deposits up to a certain limit in order to cover mainly small savers.

Depositor Protection and Compensation

The Banking Law of 2025 protects depositors by imposing obligations of fairness, transparency, prudence, security and confidentiality on authorised institutions, in order to ensure a fair, secure banking relationship that respects customers’ rights.

Member institutions must provide the Fund with the necessary information concerning eligible deposits in accordance with the deadlines and procedures it sets in this regard.

In the event of an institution’s failure, the FGD compensates depositors up to the set limit, in accordance with the conditions set out in the regulations. Banks are also required to inform their customers about the cover offered by the FGD.

These FGD requirements aim to protect depositors and ensure the resilience of the WAEMU banking sector. They impose proactive risk management and transparency obligations on institutions, thereby strengthening customer confidence and the overall financial stability of the Union.

Specific prudential measures are laid down by the Banking Law of 2025 for certain types of authorised institutions.

The Banking Commission is authorised to adjust the prudential requirements for authorised institutions. It may increase them depending on the institution’s risk profile and systemic importance, or set differentiated standards and, in exceptional cases, grant temporary exemptions tailored to each institution’s individual situation.

Institutions must comply with the minimum capital requirements set by prudential regulations. In addition to these minimums, there are mandatory capital buffers:

• the conservation buffer (the level of which is set by prudential regulations);
• the countercyclical buffer (the rate of which is set by the macroprudential authority); and
• the systemic buffer (a surcharge set by the Banking Commission and applicable only to systemically important banking institutions).

The Banking Commission has the power to require authorised institutions to maintain a level of capital in excess of the regulatory requirements set out in Article 84.

This additional requirement is generally imposed when:

• the institution is exposed to risks that are poorly covered or not covered by regulatory capital;
• stress tests reveal a probable capital shortfall;
• the governance, internal control or risk management system is deficient; or
• an audit reveals an underestimation of the actual risks incurred by the institution.

Authorised institutions are subject to mandatory minimum liquidity standards set by prudential regulations. To ensure their stability, they must also maintain appropriate liquidity buffers and have a contingency funding plan outlining resolution strategies in the event of a shortage or crisis (Artcile 86, Law of the 2025).

In addition, the Banking Commission has the power to impose liquidity requirements on institutions that exceed the regulatory minimums in several situations, including:

• the existence of systemic liquidity risk (within the territory or in the West African Monetary Union);
• stress tests revealing an inability to cope with probable risks;
• the failure of the liquidity risk management system; and
• controls revealing an underestimation of the actual liquidity risk incurred by the institution.

In Senegal, each authorised institution is required to draw up, update and submit to the Banking Commission a Preventive Recovery Plan. This plan must detail the measures that the institution could implement on its own initiative to restore its financial situation if it deteriorates significantly (whether due to a macroeconomic crisis, a serious financial crisis or a problem specific to the institution/group). The institution must provide for various scenarios of deterioration in this plan. It is also required to inform the Banking Commission of any decision to activate (or not to activate) these measures when its financial situation so requires. The precise terms and conditions for drawing up this plan are set by the Banking Commission (Article 151, Banking Law of 2025).

The bank resolution is mainly established in Articles 170 et seq. specifically for the treatment of institutions in difficulty, and derogates from common law procedures for relevant entities. This text entrusts the implementation of the resolution to the Resolution College of the WAEMU Banking Commission, acting as the Resolution Authority, and defines resolution as a restructuring aimed at safeguarding the public interest and the financial stability of the Union. The primary objectives of this approach are to ensure the continuity of the critical functions of institutions, mitigate the systemic impact of a failure on financial stability, protect public money and safeguard customer deposits covered by the Deposit Guarantee and Resolution Fund (FGDR).

In order to achieve these objectives, the Resolution College has at its disposal a range of resolution tools provided for in Articles 187 et seq. These tools include the business transfer tool, the use of a bridge institution to manage essential functions on a transitional basis, the asset separation tool to isolate impaired assets in a bad bank, and, above all, the internal bail-in tool, which allows eligible debts to be written down or converted into capital to absorb losses, while expressly preserving guaranteed deposits.

In addition, the Resolution Authority is vested with extensive powers to ensure the effectiveness of resolution, including the immediate takeover of the institution in difficulty to exercise shareholder rights, the power to forcibly transfer assets or liabilities to a receiving entity, and the power to write down, cancel or convert equity securities and debt instruments. These provisions provide a comprehensive legal framework for managing and resolving banking crises in an orderly manner, thereby minimising the impact on the economy and taxpayers.

The legal and regulatory framework governing the insolvency, recovery and resolution of banks is in general governed by the OHADA Uniform Act on the Organization of Collective Procedures (the “Uniform Act”) and more specifically by the  Banking Law of 2025.

The Banking Law of 2025 organises three procedures for dealing with companies in difficulty: preventive settlement, resolution and liquidation.

Preventive settlement is a procedure intended to avoid the insolvency or closure of a business and to enable the discharge of the company’s liabilities by means of a preventive composition agreement. This procedure is applicable to any person who, whatever the nature of their debts, is in a difficult but not in an irremediably compromised economic and financial situation and thus allows the company to be exempted from the payment of most of its debts in order to prepare a recovery plan for the company. The OHADA Uniform Act on the Organisation of Collective Proceedings for the Settlement of Liabilities does not apply to the reorganisation of authorised institutions.

The bank resolution aims to ensure the orderly management of institutions in difficulty in order to preserve the financial stability of the Union and protect the public interest. This mechanism, implemented by the Resolution College of the WAEMU Banking Commission, aims primarily to ensure the continuity of institutions’ essential functions, limit the systemic impact of a failure, protect deposits covered by the Deposit Guarantee and Resolution Fund, and avoid the use of public funds.

Regarding the procedure of liquidation of assets, in the event of the opening or pronouncement of liquidation proceedings against a authorised institution, the Banking Commission shall take a decision on the withdrawal of authorisation and the winding-up of the institution. The asset liquidation procedure established by law may only be initiated against an authorised institution with the approval of the Banking Commission (Article 213, Banking Law of 2025).

Under Senegalese law, the above-mentioned procedures concern all creditors, regardless of their particular situation (employees, preferential creditors, unsecured creditors, etc). In this respect, creditors cannot pursue the recovery of their claim against a defaulting debtor by starting an individual procedure. Collective procedures may be imposed on the creditors of a company in difficulty.

In the event of the liquidation of an authorised institution, deposits guaranteed by the Fund and sums held in segregated accounts opened in the name of payment institutions and electronic money institutions are repaid immediately after creditors of legal costs and super-preferential wage creditors, in proportion to the available resources, after deduction of the debts owed to the institution (Article 218 of the Banking Law of 2025).

The following shall also be paid by priority before all other claims, with the exception of those mentioned in the previous paragraph:

• advances granted by the Fund, at the request of the Banking Commission, as part of a preventive intervention or the financing of the resolution; and
• repurchase agreements.

Decision No 013-24-06/CM/WAEMU relating to the prudential framework applicable to credit institutions (the “Decision”) is intended to establish a prudential framework in force within the WAEMU and in particular in Senegal.

The preamble to the Decision states that the WAEMU community framework, and in particular the minimum capital requirements according to risks (credit, operational, market), are based on the Basel II and Basel III rules, and the Basel rules have been transposed taking into account the characteristics of the economies and specificities of the WAEMU banking system.

It consists of a series of provisions organised around three themes:

• the conditions for exercising the profession (minimum capital and its representation, special reserve, accounting regulations);
• the regulation of specific operations (shareholdings, fixed assets, loans to main shareholders, managers and shareholders, managers and staff); and
• management standards (coverage of risks by effective equity capital, of medium and long-term assets by stable resources, division of risks, liquidity rules, structure of liquidity rules, portfolio structure).

Among the requirements of the prudential system is the integration of operational risk into the process of supervising credit institutions. In this respect, the Banking Commission has proposed two approaches to the evaluation of operational risks based on weighting applied to an institution’s net banking income. These weights are identical to those defined by the Basel Committee, namely 15% for the basic approach and a level varying between 12% and 18% for the standard approach.

Among other things, it requires institutions wishing to use the standard approach to set up an operational risk management function with strong involvement of the executive body, which defines the roles and responsibilities of each player.

In the area of credit risk, the precise assessment of risk under the standard approach is based primarily on the counterparty weighting set by the French Banking Commission, which is the ACPR (Autorité de contrôle prudentiel et de résolution). These weightings depend on the ratings established by External Credit Assessment Institutions or rating agencies. In addition, the Annex to the Decision provides for the reinforcement of the core capital to be mobilised by the banks under Pillar One requirements (minimum capital requirements). Banks must hold a level of core capital corresponding to a minimum threshold of 5% of the amount of their exposure to credit, market and operational risks. This ratio is reinforced by the introduction of a conservation buffer established at a maximum level of 2.5% of the bank’s total exposure to risk, following the example of the threshold defined by Basel III.

Regarding the thresholds of banks’ share capital, Decision No 003 of 30/03/2015/CM/WAEMU fixing the minimum share capital of credit institutions of the member states of the WAEMU has set the minimum share capital of credit institutions of the member states of the WAEMU at XOF10 billion for banks and XOF3 billion for financial institutions of a banking nature.

In Senegal, there are no specific banking regulatory requirements relating to ESG matters. Although no specific banking regulatory requirements are provided for under Senegalese legislation, credit institutions are encouraged to implement or strengthen their ESG responsibility by implementing the international ESG standards. These ESG standards encourage, among other things, the quality of social dialogue, employment of disabled people, transparency of executive remuneration and the fight against corruption.

Banks and financial institutions may, on a voluntary basis, implement ESG requirements adapted to their specific structure and activities.

As DORA is not applicable in Senegal, there are no banking regulatory requirements related to this EU Regulation.

In Senegal, the evolution of banking regulations in the WAMU reflects a shift from a traditional national framework to modern, comprehensive community regulations aligned with international standards.

This transformation is marked by three major developments: the broadening of the scope of application, the strengthening of financial stability through crisis management, and the integration of new financial practices.

At the same time, the system is becoming more specialised: microfinance institutions are now governed by separate legislation in Law No 2025-04 of 19 February 2025 on the regulation of microfinance to enhance inclusion while ensuring financial security, while Regulation 06/2024/CM/UEMOA reforms exchange controls to ease the management of international capital flows, thereby supporting the stability and openness of the regional market.