The Banque de la République du Burundi, under the leadership of Governor Edouard BIGENDAKO, has issued Circular No. 01/2023, amending Circular No. 01/2018 of August 17, 2018. The revision focuses on the mandatory minimum Capital for credit institutions as stipulated in Law No. VI7 of August 22, 2017, governing banking activities.

Objective and Definitions:

The primary objective of this circular is to specify the Minimum Capital required for banks and financial institutions. Definitions, such as "net assets" and "liabilities," are provided to ensure clarity in compliance.

Minimum Capital Requirements:

According to Article 3, banks must maintain a Minimum Subscribed Capital of at least 50 billion BIF, while financial institutions are required to have a minimum subscribed capital of at least 30 billion BIF.

Ongoing Compliance:

Article 4 emphasizes the continuous verification of an institution's net assets, ensuring they consistently exceed the minimum capital or endowment, surpassing liabilities owed to third parties.

Reporting Obligations:

Under Article 5, credit institutions are mandated to submit monthly declarations to the Central Bank detailing their net assets minus liabilities, following the guidelines in the circular's appendix.

Transitional Provisions:

Article 6 outlines transitional measures, stipulating that existing banks must reach a subscribed capital of at least 30 billion BIF by December 31, 2025, 40 billion BIF by December 31, 2027, and 50 billion BIF by December 31, 2029. Financial institutions must reach a subscribed capital of 18 billion BIF by December 31, 2025, 24 billion BIF by December 31, 2027, and 30 billion BIF by December 31, 2029.

New Entrants:

In accordance with the capital minimums specified in Article 3, any credit institution seeking approval after the circular's effective date must adhere to the mandatory capital requirements.