Regulatory Alerts2013-05-22
Controls for banks practicing bancassurance activity
The Central Bank of Egypt (CBE) has imposed a number of restrictions on banks participating in the financing of imports and foreign trade, as stipulated in Article No. 5 of its bylaw No. 273 for the year 1944. In light of this, CBE has called on banks to resolve outstanding cases with their clients before applying any new measures or changes in their client terms. The Central Bank's Board of Directors approved the amendment of Article No. 5 of its bylaw No. 273 for the year 1944, concerning the supervision and control of banks participating in foreign trade financing. According to this article, if a bank intends to cease such operations or change its relationship with importing or exporting clients, it should notify the Central Bank, through the Supervisory Department, at least three months before the planned date for implementation. The central bank has informed the banks that participate in foreign trade financing about the importance of complying with this new regulation and communicating any changes to their clients, especially since banks have a responsibility to maintain the stability of financial markets. In light of this new rule, the CBE emphasized the need for timely coordination between the banks and its clients regarding any forthcoming decisions related to foreign trade financing operations. CBE has announced that it will continue implementing this regulation in accordance with the Egyptian laws. The governor of the Central Bank is Hisham Ramez.