Cameroon’s Deposit Fund Rejects COBAC Plan to Bring Consignments Under Banking Rules

This marks a new chapter in the dispute between Cameroon’s Deposit and Consignment Fund (CDEC) and the Central African Banking Commission (COBAC). The Cameroonian public institution has declined an invitation to take part in consultations launched by the regional banking regulator on two draft regulations governing deposit funds across the Central African Economic and Monetary Community (CEMAC).

Behind the boycott lies a jurisdictional dispute with significant economic implications. COBAC seeks to regulate activities it considers banking operations. CDEC, for its part, argues that consignments, regulated deposits, and dormant assets are public, sovereign, and non-banking activities.

The position is set out in a letter dated June 15, 2026, sent by CDEC Director General Richard Evina Obam to the Secretary General of COBAC. The consultations concern two draft regulations. The first addresses governance, internal controls, changes in corporate status, and prudential standards for deposit funds. The second deals with the treatment of inactive accounts and dormant assets held on the books of institutions supervised by COBAC.

The Dispute Over “Banking Operations”

The breaking point lies in Article 2 of the first draft regulation. Under the version reviewed, “the receipt, custody, and management of dormant assets,” “the receipt, custody, and management of administrative, judicial, and contractual consignments,” and “the receipt, custody, and management of deposits ordered by laws and regulations” would be considered banking operations carried out by deposit funds. The text also includes the granting of credit, the issuance of guarantees, and the provision of payment services.

For COBAC, the draft builds on Regulation No. 01/25/CEMAC/UMAC/COBAC of July 12, 2025, on the conditions governing the activity and supervision of deposit funds in CEMAC. It aims to clarify their operating, governance, internal control, and prudential rules.

CDEC sees it differently. In his letter, Richard Evina Obam accuses COBAC of seeking to “broaden the definition of banking operations” to include regulated deposits and consignments. The Convention harmonizing banking regulations in Central African states, signed in Douala on January 17, 1992, defines banking operations in Article 4 as including “the receipt of funds from the public, the granting of credit, the issuance of guarantees in favor of other credit institutions, the provision to customers and management of payment instruments.” Administrative, judicial, or contractual consignments are not expressly included. Nor are dormant assets.

Deposit Funds, Not State-Owned Banks

CDEC’s central argument rests on the very nature of deposit funds. According to the institution, if member states had intended to create state-owned banks, they would have done so within the ordinary banking framework. Instead, they established deposit funds because these institutions serve a different purpose.

Under this interpretation, deposit funds are not credit institutions in the traditional sense of CEMAC banking regulations. They do not hold standard banking licenses, have no private shareholders, and do not operate with share capital comparable to that of a commercial bank. They are public institutions created to carry out a specific public-service mission.

CDEC therefore stresses what it considers a fundamental distinction: a bank receives funds from the public and may use them for its own account, subject to repayment obligations. A deposit fund receives, holds, and allocates funds within a legal, judicial, administrative, or contractual framework. Consignments, in this view, are not ordinary bank deposits but a mechanism for safeguarding designated resources.

According to this argument, treating consignments as banking operations would artificially place deposit funds within a prudential framework designed for credit institutions. CDEC maintains that COBAC has authority over banks and credit institutions, but not over the organization of a national public service that falls outside the banking sector.

A Battle Over Legal Authority

In its letter, CDEC argues that “the public service of deposits and consignments is not among the areas of authority transferred to CEMAC under its delegated powers.” It describes the activity as “a sovereign function governed by the relevant provisions of domestic law.”

The institution therefore maintains that COBAC cannot, through secondary legislation, extend its authority to functions that member states have not expressly transferred to the Community. Richard Evina Obam also criticizes COBAC for participating in a process led by the Bank of Central African States (BEAC) in 2024 that, in his view, resulted in a transfer of powers through regulation. He argues that such a transfer should be carried out through primary Community law rather than through ordinary regulations.

CDEC thus invokes the hierarchy of legal norms. Under its interpretation, Community regulations remain subordinate to the founding conventions. If they create obligations or exceptions not provided for in those conventions, they could be challenged as legally invalid.

Supervision Seen as Ill-Suited

The draft regulation goes beyond classifying certain activities as banking operations. Article 3 provides that the rules governing the operation and supervision of credit institutions would apply, mutatis mutandis, to deposit funds, subject to the specific provisions set out in Community legislation.

Deposit funds would therefore be required to comply with rules covering governance, internal controls, reporting, risk management, solvency, liquidity, and risk concentration. The draft would also subject certain corporate actions to prior approval by the Banking Commission, including the acquisition or disposal of significant shareholdings, investments in entities within the CEMAC region, and the establishment of subsidiaries.

CDEC considers this supervisory framework ill-suited to its role. In its view, banking prudential requirements do not match the status of a public institution entrusted with a public-service mission.

“Capital plays a central role in a bank because shareholders are expected to absorb losses. A deposit fund does not operate under that logic. It has no private shareholders and its activities are backed, under the laws that govern it, by a state guarantee,” a CDEC official said.

Under this interpretation, the prudential soundness of a deposit fund depends less on traditional banking solvency tools than on the continuity of public service and the backing of the state. As a result, the automatic application of rules on capital adequacy, liquidity, or risk concentration would not align with its institutional status.

The banking regulator, for its part, could argue that the financial nature of some deposit fund activities justifies regional prudential oversight. However, none of the documents reviewed contains an official response from COBAC to CDEC’s position.

An Issue of Economic Sovereignty

Beyond the legal debate, the dispute has economic implications. Deposit funds are designed to centralize and safeguard specific resources, including regulated deposits, consignments, dormant assets, and funds received through administrative or judicial decisions. They can also serve as long-term financing tools for public policy objectives.

CDEC explicitly embraces that role. In its letter, it describes the deposit fund as “an instrument of economic sovereignty” and “an alternative tool for financing public policies.” It argues that classifying consignments as banking operations would effectively “cripple an instrument of economic sovereignty.”

The choice of words reflects the level of tension surrounding the issue. For Yaoundé, the debate goes beyond regulatory architecture. It concerns the state’s ability to organize the collection, safeguarding, and allocation of public or quasi-public resources on its own terms.

The N’Djamena Legal Challenge

CDEC has already taken the dispute before the CEMAC Court of Justice in N’Djamena. It has filed applications seeking the annulment of two regulations adopted by the UMAC Ministerial Committee on July 12, 2025. The first concerns the operating conditions and supervision of deposit funds. The second deals with the treatment of inactive accounts and dormant assets held by institutions supervised by COBAC.

Both filings bear a court registry stamp dated September 8, 2025. Two applications seeking a stay of execution were also reportedly filed on October 1, 2025. Based on the information available, no ruling has yet been issued.

In the conclusion of his letter, Richard Evina Obam firmly rejects the consultation process launched by COBAC. He writes that it will not be “possible to participate in yet another maneuver aimed at serving interests contrary to those of Cameroon.”

According to the draft reviewed, the new rules would take effect on January 1, 2027. Deposit funds already operating within CEMAC would have a transition period until August 31, 2028, to comply with the new requirements.

The next chapter of the dispute may therefore be decided before the CEMAC Court of Justice. If the court rules in favor of CDEC, the legal basis of the contested regulations—and, by extension, the draft rules built upon them—could be weakened. COBAC would then have to revise its framework or await a higher-level legal clarification on the status of deposit funds within CEMAC.

If, on the other hand, the court rejects the appeals, COBAC would gain significant legal backing to continue bringing deposit funds within its supervisory framework. Even then, a court victory would not settle the debate. Critics of the approach argue that by classifying consignments, regulated deposits, and dormant assets as banking operations, the regulator risks placing a public institution designed to safeguard funds and support long-term financing under a prudential framework largely modeled on commercial banks.

COBAC and the Risk of a CEMAC Exception

This approach differs from models found elsewhere, including in WAEMU and several European countries, where deposit funds operate under a distinct institutional framework. They are subject to oversight mechanisms but are not necessarily treated as commercial banks or placed under the ordinary banking supervisory regime.

The issue, therefore, is not whether deposit funds should be supervised, but how. For CEMAC member states, the question is whether it is appropriate to subject deposit funds to traditional banking supervision or whether they should instead be governed by an institutional oversight framework tailored to their public mission and role in safeguarding economic sovereignty.

Pending the outcome of the proceedings in N’Djamena, COBAC finds itself in a delicate position. It can invoke financial stability to justify bringing deposit funds within its prudential framework. But in doing so, it also exposes itself to a more fundamental criticism: that it is extending its authority beyond its original mandate, blurring the line between legitimate supervision and the treatment of deposit funds as banks.

For CEMAC, the stakes extend far beyond Cameroon. The underlying question is whether deposit funds will be recognized as public institutions dedicated to safeguarding resources, securing assets, and supporting long-term financing, or whether they will ultimately be treated as financial entities subject to the banking regulator’s prudential regime.

Baudouin Enama