Regulatory Alerts2017-01-16
A circular dated December 28, 2016 regarding some clarifications regarding monthly income when calculating the value of loan installments for consumer purposes.
In February 2016, the Central Bank of Egypt issued a directive regarding the ratio of installment payment to monthly income for personal loans and residential and real estate loans. The Central Bank has been closely monitoring its implementation and found that certain banks have violated these rules by granting car loans without verifying the applicant's monthly income. The bank has emphasized that the income verification process should continue when extending personal loans, especially for vehicle financing. Additionally, a borrower's gross income includes all sources of income, including those not recorded on official documents, according to the Deputy Governor's guidelines in March 2016. Any deviation from these directives must be reported urgently.