Investment Policy Review - Rwanda - UNCTAD Virtual Institute

Investment Policy Review of Rwanda
Table II.8. Banking system
Market share
of deposits
(per cent)
Market share
of loans
(per cent)
Ownership structure
Banque de Kigali 26.2 22.6 50% Belgolaise (Fortis, Belgium-Holland) 1 , 50%
public
BCDI 22.2 19.6 100% private (local non-corporate owners)
BCR 17.2 15.0 80% CDC group (U.K.), 20% public
BANCOR 7.3 8.6 100% private
BACAR 8.3 9.1 60% FINA Bank (Kenya), 20% Enterprise holdings
(Botswana), 20% public
COGEBANQUE 3.4 5.1 100% private
UBPR 9.7 12.8 100% private (local cooperative bank)
BRD 5.3 7.1 55.7% public, 10.5% private (local), 33.8% foreign
development agencies
CHR 0.5 0.0 83% public, 17% private (local)
1
The Fortis Group decided to withdraw from Belgolaise in 2005 and has started to divest from its network of African subsidiaries.
Sources: Banque National du Rwanda, IMF, company websites.
Wide regulatory and supervisory powers are granted to the BNR under Law 11/97 regulating its
statutes and Law 08/99 regulating banks and other financial institutions. It has used these powers to put
in place relatively strict and restrictive regulations that have left little room for the banking system to put
in place innovative financial instruments. Such a restrictive approach was justified by the fragility of the
banking system in the aftermath of the genocide. At this stage, however, a somewhat more «hands-off»
approach to regulations should be feasible without generating undue systemic risk. Such an approach, in
turn, could foster the development of new instruments and a more sophisticated banking system that
could benefit the economy as a whole (chapter III).
The main prudential regulations enforced by the BNR include:
• Banks are required to put in place a loan classification system whereby assets are ranked from
class 1 ("current") to class 5 ("contentious"). 50 Classification of loans under class 3, 4 or 5 requires
immediate provisioning of 20 per cent, 50 per cent and 100 per cent, respectively;
• Banks are required to communicate to the BNR and other banks the list of debtors with loans
in excess of Rwf 500 000 ($900) in class 3, 4 or 5. It is strictly forbidden for any bank to extend
further credits to these debtors;
50
Class 1: no delays in interest and principal payments and financially strong debtor.
Class 2: delays in interest or principal payments between 30 days and 90 days, or deteriorating financial situation of the debtor.
Class 3: delays in interest or principal payments between 90 days and 180 days, or important doubts about the financial situation of the debtor.
Class 4: delays in interest or principal payments between 180 days and 360 days, or serious doubts about the financial situation of the debtor.
Class 5: delays in interest or principal payments in excess of 360 days.
60