Complex Control On The Results Of Compliance Legislation Loan Associations And Savings By The Sca. "sofmicrocredit"

Original Language Title: cu privire la rezultatele controlului complex privind respectarea legislaţiei în domeniul asociaţiilor de economii şi împrumut de către A.E.Î. „SOFMICROCREDIT”

Read the untranslated law here: https://www.global-regulation.com/law/moldova/5966895/cu-privire-la-rezultatele-controlului-complex-privind-respectarea-legislaiei-n-domeniul-asociaiilor-de-economii-i-mprumut-de-ctre-a.e..-sofmicrocredit.html

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on the results of complex control on compliance
legislation
savings and loan associations by the SCA. "SOFMICROCREDIT"


Posted: 19/08/2016
in the Official Gazette

Nr. 265-276
Article No: 1316
Effective Date: 05/08/2016

Under the order of the National Commission of Financial Market (NCFM) No. 24/5-A of 20.05.20161 and Vice NCFM Order no. 28 of 20/05/2016, control was performed on enforcement in the field of complex associations of savings and loan by the SCA. "SOFMICROCREDIT" (Sofia village, Drochia, IDNO 1005607000870) activity for the period 01.05.2013-30.04.2016, which has a category B series NCFM no. 000 036 issued on 12.02.2009, in which were found the following.

1Monitorul _____________________________________ Oficial, 2016 No. 140-149, art. 957

Specialized According to reports, the SCA. "SOFMICROCREDIT" (hereinafter - Association) registered following key indicators activity characteristics of savings and loan associations, which are presented in the following table:


(Thousand)






Nr.


indicators


30/04/2015


04/30/2016


2016 to
2015 (-, +)


2016 to
2015 (%)




1.


Loans


4541.4


4142.8


-398.6


91.2




2.


Provisions for loan losses


-460.5


-469.8


9.3


102.0




3.


Total assets


5687.4


5055.7


-631.7


88.9




4.


Savings deposits


4316.1


3771.5


-544.6


87.4




5.


Net income (net loss)


0.8


255.4


256.2


Increase of 320 times






The data table reveals most indicators registered decrease, particularly loans with about 8.8 percent, the share of which in total assets is 81.9 percent. Net profit growth of about 320 times is essential due to the increase in income from cancellation of provisions and other operating income.
According to data from the financial statements and specialized reports submitted by SCA. "SOFMICROCREDIT" during 31.05.2013-30.09.2013, 31.12.2013-31.01.2014, 31.03.2014-31.05.2014 and as of 30.09.2015 were not complied with the requirements of Art. 33 para. (3) e) of Law No savings and loan associations. 139-XVI from 21.06.20072 (hereinafter - the Law no. 139-XVI of 21.06.2007) and pt. 4 of the rules of financial prudence savings and loan associations, approved by NCFM Decision no. 17/8 of 30.04.20083 (hereinafter - PRUDENTIAL NORMS) that the association holding a B license is required to hold and maintain institutional percentage of assets at any time at least 10 percent since sixth year of activity.
______________________________________

2Monitorul Oficial, 2007, no. 112-116, art. 506
3Monitorul Oficial, 2008, no. 131-133, art. 381

As of 31.10.2013 in the period 31.12.2013-31.10.2014 the executive director did not ensure compliance pt. 12 of the rules of financial prudence on institutional placement reserve in the amount of at least 4 percent of assets in bank term deposit accounts and / or state securities and / or liquidity fund. Notwithstanding the provisions of section
. 7 of the rules of financial prudence during 31.05.2013-30.09.2013 and statements of 03.31.2014 and 09.30.2015 total value of membership of the association exceeded in size by 20 percent institutional reserve.
In periods 31.05.2013-31.08.2013, 10.31.2013, 31.12.2013-31.01.2014, 31.07.2015-30.04.2016 05.31.2015 and joint investment fund liquidity amounted to less than 10 percent of the total amount of savings deposits and thus violated the requirements of art. 9 paragraph. (2) c) art. 35 of Law no. 139-XVI of 21.06.2007, pt. 8 of the Regulation on the liquidity of savings and loan associations, approved by NCFM Decision no. 13/11 of 01.04.20104 (in force until the date of 04.30.2015) and pt. 7 of the Regulation on the liquidity of savings and loan associations, approved by NCFM Decision no. 16/3 of 27.03.20155, that the association holding the license for category B is obliged to maintain investment in the Fund savings deposits in the minimum amount calculated according to pt. 13 of the rules of financial prudence.

4Monitorul _______________________________________ Oficial, 2010, no. 110-113, art. 391
5Monitorul Oficial, 2015 No. 105-109, art. 699
Contrary
art. 9 paragraph. (2) b) art. 44 para. (1) of Law no. 139-XVI of 21.06.2007 and art. 29 para. (6) of the Accounting Law no. 113-XVI from 27.04.20076, the association's expert report as of 04.30.2016 does not reflect the true and fair picture of its trading items. As a result of non-compliance pt. 37 of the rules of financial prudence during 31.07.2014-30.04.2016 association has not accounted for the balance sheet accounts and related interest loans classified as "compromised" in the amount of about 261 200 lei. ________________________________________

6Republicată in the Official Gazette of the Republic of Moldova, 2014, no. 27-34, art. 61

Association managers did not ensure compliance pсt. 36 of the rules of financial prudence, were identified 23 cases where the association is not addressed in court for repayment of loans and interest accrued on overdue more than 90 days in the amount of about 216 700 lei.
Respected the provisions of Decision No NCFM. 20/3 of 24.05.2010 "On the results of the examination and analysis of data from the financial statements of the savings and loan associations for 2009" 7 pt. 2 and pt. 3 of the Decision of NCFM no. 33/5 of 07.16.2013 "On the results of thematic control on compliance with legislation loan associations and savings by the SCA. "SOFMICROCREDIT" "8 association acknowledged receipt of its members savings deposits amounting to 2.2092 million lei in the period 31.05.2013-30.09.2013, 1.2809 million lei in the period 31.03.2014-31.05.2014 and 8.4761 million lei in the period 31.07.2014-30.04.2016, while the share of borrowings and related interest overdue more than 30 days in total loan portfolio was over 5.0 percent and deposits economies have more than doubled the institutional reserve.

7Monitorul ________________________________________ Oficial, 2010, no. 83-84, art. 314
8Monitorul Oficial, 2013 No. 161-166, art. 1126
Notwithstanding the provisions of section
. 38 of the rules of financial prudence and art. 29 pt. 3 lit. b) of the Statute, which states that the task of decision-making on related party transactions within the competence of the council decision to grant the loan Chairman of the Board, which is an affiliated person of the association, was approved at the meeting of the lending committee of 09/17/2015.
Not being complied with the requirements of section. 43 of prudential rules for the entire period subject to the control board of the association did not provide development and approval of the investment policy of the association.

In the context of updating the NCFM Decision no. 39/10 08.08.20149 license from SCA. "SOFMICROCREDIT" the inclusion in the annex to the license branch "Drochia" and monitoring its activity, there is not ensuring compliance with the requirements of art so far. 12 para. (1) and paragraph. (2) art. 40 para. (2) m) of Law no. 139-XVI of 21.06.2007, pt. 5 and pt. 9 of the Regulation on requirements to administrators and savings associations loan, approved by NCFM Decision no. 63/6 of 25.12.200710 on the need to appoint and confirm by NCFM driver (administrator) subsidiary in question.

9Monitorul ________________________________________ Oficial 2014, no. 249-255, art.
1230 10Monitorul Oficial, 2008, no. 37-39, art. 90

Respected art requirements. 8 paragraph. (2) of Law no. 190-XVI from 26.07.2007 "On preventing and combating money laundering and terrorist financing," 11 69 transactions related data acceptance / repayment of savings deposits and granting a loan transaction made in cash through an operation or through several operations amounting to over 100.0 thousand in different periods, were not remitted Money Laundering Prevention and Combating Service.

11Monitorul ________________________________________ Oficial, 2007, no. 141-145, art. 597

Based on the above, pursuant to art. 1, art. 3, art. 4 art. 8 letters b) and lit. f) art. 9 paragraph. (1) d) and lit. j) art. 22 para. (3), art. 25 para. (2) of Law no. 192-XIV of 12.11.1998 "On the National Commission of Financial Market" 12 Art. 9 paragraph. (2) e) art. 46 para. (1), para. (2) and. (5) art. 49 para. (1) c) of Law no. 139-XVI of 21.06.2007, norms of financial prudence, ________________________________________

12Republicată in the Official Gazette of the Republic of Moldova, 2007, no. BIS 117-126


NATIONAL FINANCIAL MARKET COMMISSION DECIDES
:

1. It initiates the accountability contravention of the Executive Director of SCA. "SOFMICROCREDIT" under the Contravention Code of the Republic of Moldova.
2. SCA is prohibited. "SOFMICROCREDIT" accepting savings deposits while the share of borrowings and related interest expired more than 30 days in total loan portfolio makes up over 5.0 percent and savings deposits exceed twice the amount of institutional reserve.
March. It warns administrators SCA. "SOFMICROCREDIT" the need for unconditional respect laws and regulations and provisions prescribing the following:
- take the necessary measures to eliminate violations found during the inspection within 12 months from the date of entry into force of this decision;
- Appointment and confirmation of the manager (manager) subsidiary "Drochia" under the law, within 90 days of the effective date of this decision.
4. Resolve Money Laundering Prevention and Combating Service SCA control materials. "SOFMICROCREDIT" on 70 unreported transactions under the law on combating money laundering and terrorist financing to take the attitude according to competence.
May. HER. "SOFMICROCREDIT" will present the National Commission of Financial Market Monthly reports on measures taken for the enforcement pt. 3, duly supported by copies of supporting documents.
June. Control over the execution of this decision is the responsibility of the General Directorate of collective investments and microfinance.
July. This decision shall enter into force upon adoption, will be published on the official website of the National Commission of Financial Market (www.cnpf.md) and in the Official Gazette of the Republic of Moldova.


COMMISSION VICE NATIONAL FINANCIAL MARKET Nina Dosca