Introduction
Bank credit rests upon a contractual balance whose underlying logic appears, at first glance, relatively straightforward: the credit institution makes funds available to its customer, who undertakes to repay them in accordance with the agreed terms and to bear the cost attached to their provision.
This balance is, however, profoundly altered when the borrower ceases to meet instalments regularly.
The difficulty then no longer relates solely to the repayment of principal. As the default persists, conventional interest, default interest, bank charges, commissions and penalties may all be added to a debt that the debtor was already unable to settle.
Time thus becomes a factor aggravating the debt.
This situation is not, however, ignored by banking law. It is in fact one of the central concerns of the prudential regulation applicable to credit institutions.
In the Union of the Comoros, Regulation No. 005/2015/BCC/DSBR on the classification and provisioning of claims held by credit institutions requires banks to identify the deterioration of their claims, to classify them according, in particular, to the age of the arrears, and to set aside the corresponding provisions.
The system thus rests upon a progressive logic: the more uncertain the recovery of the claim becomes, the more the credit institution must recognise its risk in its accounts.
A difficulty emerges, however.
The prudential recognition of the deterioration of the claim does not necessarily entail a legal stabilisation of the customer's debt.
In other words, the same claim may be regarded, in the bank's accounts, as sufficiently compromised to justify substantial provisioning while continuing, in the contractual relationship with the debtor, to accrue accessories liable to increase its amount progressively.
The paradox warrants emphasis.
Prudential law takes account of the uncertainty affecting the recovery of the claim without, at the same time, organising a general mechanism designed to prevent that claim from continuing to grow against a debtor who is already in default.
A question therefore arises: can the classification of a claim as non-performing produce, directly or indirectly, an effect on the interest, bank charges and penalties claimed from the debtor and, failing that, what mechanisms make it possible to frame their accumulation?
The analysis reveals that the prudential framework of the Central Bank of the Comoros does not, in itself, constitute a mechanism for protecting the debtor against the growth of his debt (I). Such protection must therefore be sought in other instruments of banking, contractual and OHADA law (II), which leads to a consideration of the desirability of a better coordination between the prudential treatment of the claim and the legal treatment of default (III).
I. Non-Performing Loans: Prudential Deterioration Without a Legal Freeze of the Debt
Regulation No. 005/2015/BCC/DSBR establishes a particularly structured system for the surveillance of claims held by credit institutions.
Its logic is, however, primarily prudential.
It is therefore necessary to distinguish the consequences which the classification of a claim produces in the bank's accounts from those it produces in the contractual relationship with the debtor.
A. A Regulatory Framework Requiring Banks to Recognise Credit Risk
Regulation No. 005/2015/BCC/DSBR establishes a progressive classification of claims according to their situation and, in particular, the age of the arrears.
As the debtor's situation deteriorates, the claim thus leaves the category of normally performing exposures to move successively into the categories corresponding to past-due, non-performing and then compromised or irrecoverable claims.
This classification is not merely descriptive.
It entails increasing accounting and prudential obligations for the credit institution. The bank must, in particular, set aside provisions whose level increases with the age and degree of impairment of the claim.
The treatment of unpaid interest follows the same logic.
Once their collection becomes uncertain, the regulation prevents them from artificially contributing to the recognition of revenue that is not, in reality, actually received.
The overall design of the framework thus appears perfectly coherent.
A bank cannot present in its balance sheet a claim that is persistently unpaid as if it carried the same value as a claim being repaid normally. The greater the risk of non-recovery, the more this risk must be reflected in its accounts.
The Regulation thus protects, first and foremost, the reliability of financial information, the solvency of institutions and, more broadly, the stability of the banking system.
But precisely because this is its purpose, its effects vis-à-vis the debtor are more limited.
B. The Paradox of a Loan that is Prudentially Impaired but Continues to Accrue Contractually
The notion of "freeze" employed by the regulation may, at first reading, give rise to ambiguity.
It might suggest that a claim having reached a certain level of deterioration necessarily ceases to accrue interest and other accessories charged to the customer.
Such a consequence does not, however, follow from Regulation No. 005/2015/BCC/DSBR alone.
The freeze to which the framework refers is part of the prudential assessment of the account situation. It does not appear to constitute a general rule requiring the credit institution to cease all contractual accrual of interest, bank charges or penalties from the moment the claim is classified in the non-performing category.
The distinction is fundamental.
In the institution's accounts, the claim is treated in light of the real risk of non-recovery.
In the relationship with the customer, it remains governed by the credit agreement and may, subject to the mandatory rules applicable, continue to accrue the accessories contractually provided for.
This gives rise to a singular situation.
The more time passes, the more the bank may be led to provision its claim on account of the diminishing prospects of recovery; yet this same passage of time may simultaneously contribute to increasing the nominal amount of the debt claimed from the customer.
The claim thus deteriorates in one direction on the prudential level while increasing in the other on the contractual level.
It is precisely this disconnect that reveals the limitations of the current framework.
Prudential law requires the bank to draw the financial consequences of the debtor's default in its own accounts. It does not, however, by itself, organise the consequences of that same default on the evolution of the debt within the customer's estate.
The protection of the debtor must therefore be sought elsewhere.
II. Protecting the Debtor Beyond Prudential Regulation
The absence of an automatic freeze resulting from classification as a non-performing claim does not in any way mean that the credit institution enjoys absolute freedom in determining the amounts claimed.
Several mechanisms make it possible to control the cost of credit, contractual penalties or the conditions in which the claim becomes due.
Their difficulty lies, however, in their dispersion.
A. The Usury Rate: Genuine Protection, but Primarily at the Inception of the Credit Relationship
The introduction of a usury rate into the Comorian banking system constitutes a significant development.
Through the overall effective rate, banking law is no longer concerned solely with the nominal rate announced by the credit institution but with the real cost of the transaction, according to the elements that must, by regulation, be included in its calculation.
Regulation No. 05/2025/BCC/DESM-DRRB concerning the introduction of a usury rate supplements this framework by setting a ceiling on the cost at which credit may be granted.
This development unquestionably strengthens the protection of the borrower.
Its scope vis-à-vis non-performing claims must, however, be precisely circumscribed.
The usurious character is assessed by reference to the overall effective rate at the date of the stipulation of the loan. The mechanism therefore operates essentially at the time the credit relationship is formed.
It cannot be transformed into a general device making it possible to regard a loan that was initially regular as subsequently becoming usurious solely by reason of the accumulation of interest and penalties following the debtor's default.
Here again a distinction emerges.
The usury rate protects the borrower against an excessive cost of credit at the time of its stipulation; it does not fully resolve the question of the evolution of the debt once default has set in.
B. Contractual Provisions and Judicial Review as Means of Controlling Additional Amounts Accruing on the Debt
In the absence of a general regulatory freeze mechanism, the banking agreement occupies a decisive position.
It is the agreement that sets the terms of remuneration of the credit, the consequences of late payment, any penalties and, where appropriate, the conditions of termination and closure of the relationship.
The drafting of the contract thus constitutes the first line of prevention.
Nothing prevents, subject to the mandatory provisions applicable, the contractual organisation of the consequences of a prolonged default: notification to the customer, preparation of a detailed statement, a renegotiation period, rescheduling or, again, the precise determination of the treatment of interest and penalties during that period.
Such an organisation would, moreover, serve an interest extending beyond the protection of the debtor alone.
The bank itself has an interest in its claim being precisely determined and in its composition being capable of justification when it commences recovery proceedings.
The court constitutes, for its part, a second level of control.
Not all amounts added to the principal are of the same legal nature. Conventional interest, default interest, commissions, bank charges and penalty clauses are subject to distinct regimes.
Where certain stipulations have the character of a penalty clause, their amount may in particular be subject to the court's power of moderation under the conditions provided by the applicable law.
The question therefore does not merely consist in determining the overall figure appearing on the bank statement.
It requires the claim to be broken down in order to identify the nature and legal basis of each of the amounts claimed.
C. OHADA Mechanisms: From Rescheduling Payments to Suspending the Accrual of Interest
OHADA law also provides several responses, whose scope must be carefully distinguished.
Article 39 of the OHADA Uniform Act Organising Simplified Recovery Procedures and Measures of Execution allows the court, taking into account the debtor's situation and the creditor's needs, to postpone or stagger payment of the sums due within the limits set by the text.
The court may also decide that payments will be applied first to the principal.
The mechanism is of obvious interest to a debtor facing temporary difficulty.
It would, however, be excessive to infer from it a general principle according to which the grant of a grace period would necessarily entail the freeze of all interest, bank charges and penalties.
The law of collective proceedings adopts, by contrast, a markedly different logic.
Article 77 of the OHADA Uniform Act Organising Collective Proceedings for Wiping Off Debts attaches to the opening of judicial reorganisation or liquidation of assets a genuine effect upon the running of legal and conventional interest as well as default interest and surcharges, subject to the exceptions provided by the text.
The comparison is instructive.
When the OHADA legislator intends to suspend the accrual of interest on account of the debtor's economic situation, it provides for it expressly.
This solution reinforces, a contrario, the idea that a comparable effect cannot, without more, be inferred from the mere prudential classification of a claim as non-performing where the banking regulation does not provide for it.
III. From a Non-Performing Loan to an Enforceable Claim: The Need for Better Coordination
The absence of an automatic freeze does not mean that the bank may pursue recovery of an amount whose composition or enforceability would remain uncertain.
The question of the closure of the account and the determination of the balance takes on particular importance here.
It leads, more broadly, to a consideration of the desirability of better coordination between prudential regulation and the legal treatment of default.
A. Closing the Account as a Step Towards Determining the Claim
The current account presents an essential feature: as long as it operates, the various transactions entered in it form part of a dynamic contractual relationship.
Closure alters this situation.
It makes it possible to put an end to the operation of the account and to reveal a balance that may, when the conditions are met, constitute a claim that is certain, liquid and due.
This question is of particular importance in the context of order for payment proceedings.
In its judgment No. 009/2013 of 7 March 2013, BIAO-CI v. TPZC et al., the Common Court of Justice and Arbitration (CCJA) was in particular led to assess the certainty and liquidity of a claim arising from a current account that had not been closed contradictorily in accordance with the stipulations of the applicable agreement.
The scope of this case law must be precisely understood.
It does not necessarily establish an abstract rule according to which every bank account must, in all circumstances, be closed contradictorily before a claim may be pursued.
It does, however, recall a fundamental requirement: the institution seeking payment must be in a position to establish the claim invoked under the conditions provided by the agreement and by the applicable law.
The debate on the accumulation of interest thus joins that of the determination of the balance.
The longer the banking relationship continues after default, the more decisive the question of the date on which and the conditions according to which the debt must be fixed becomes.
B. The Case for a Mechanism to Stabilise the Debt
The current framework thus reveals a form of incompleteness.
Prudential regulation identifies with precision the point from which the situation of a claim must be regarded as deteriorated. It requires the bank to draw increasingly significant accounting consequences from it.
It does not, however, necessarily attach to this deterioration a correlative obligation of enhanced notification to the debtor, of restructuring or of stabilisation of the amount of the debt.
This absence warrants reflection.
It would obviously not be a question of considering that a borrower should be released from the cost of his credit solely because he ceases to repay it.
Such a solution would undermine the security of credit and could create an economic incentive contrary to the very operation of the banking system.
But the converse requirement equally merits consideration.
Where the default is sufficiently prolonged for the regulation to require the credit institution officially to recognise the non-performing character of the claim, may it be appropriate for this stage also to trigger certain mechanisms in the relationship with the customer?
An obligation to inform could, for example, enable the debtor to know precisely the remaining principal due and the amount of the accessories accumulated.
A mandatory restructuring phase could be contemplated before the irreversible aggravation of the debt.
A detailed statement of the account could also make it possible to distinguish clearly between the principal and the interest, bank charges, commissions and penalties.
The question of a possible capping of certain accessories beyond a determined duration could, finally, be raised.
It would no longer be a matter of confusing prudential law with the law of obligations, but precisely of better coordinating them.
C. Striking a Balance Between the Security of Credit and Debtor Protection
Any reform in this area should, however, preserve a particularly delicate balance.
Credit rests upon the lender's confidence in the possibility of obtaining repayment of the sums made available. A regulation that unduly weakened the rights of the creditor could increase the cost of financing, reduce access to credit and, ultimately, produce economic effects contrary to those sought.
Conversely, a debt whose accessories may continue to accumulate over several years even though the prospects of repayment are deeply compromised may lead to an economically irrational situation.
The issue is therefore not to oppose the bank and the debtor.
It consists in determining the point from which the mechanical continuation of the contractual relationship ceases to be the most effective response to default.
From this perspective, the classification of a claim as non-performing could constitute not necessarily the starting point of an automatic freeze, but that of a new phase of the banking relationship: a phase in which the priority would no longer be solely the continuation of the initial contract, but the transparent determination of the debt, the examination of restructuring possibilities and, where these fail, the orderly organisation of recovery.
Conclusion
Regulation No. 005/2015/BCC/DSBR has unquestionably strengthened the prudential framework of credit risk in the Comorian banking system.
By requiring credit institutions to classify their claims according to their level of deterioration and to set aside the corresponding provisions, it compels banks to recognise, in their accounts, the reality of the risk to which they are exposed.
This advance remains, however, essentially prudential.
The classification of a claim in the non-performing category does not appear, in itself, to entail an automatic freeze of interest, bank charges and penalties in the relationship between the credit institution and its customer.
It is precisely here that the principal limitation of the framework lies.
The regulation recognises the economic deterioration of the claim without fully organising the legal consequences of that deterioration on the evolution of the debt.
The existing mechanisms — usury rate, contractual stipulations, judicial control of penalties, grace period, collective proceedings or requirements relating to the determination of the balance — make it possible to provide partial answers. Their dispersion shows, however, that none of them constitutes, on its own, the equivalent of a general regime applicable to a claim that has become persistently non-performing.
An evolution of the regulatory framework could therefore usefully be contemplated, not necessarily to establish an automatic freeze of any debt after a determined period, but to organise more clearly the transition from banking default to restructuring or recovery.
The question ultimately extends beyond the protection of the debtor alone.
It touches upon the very quality of the credit relationship.
A banking system that is legally secure is not only one in which institutions may recover their claims. It is also one in which the cost, evolution and enforceability of those claims remain predictable and legally controlled when default occurs.