Regulatory Alerts2017-01-16
A circular letter dated January 11, 2017 amending the conditions for listing “supportive loans (deposits)” in accordance with the instructions of the capital adequacy standard.
In Cairo, Egypt, on January 11, 2017, the Chairman/Chief Executive of the Bank stated that he would like to refer to the guidelines issued by the Central Bank of Egypt (CBE) on December 24, 2012 regarding the minimum standard of bank capital under the implementation of BASEL II which includes components of the second tranche of the Basel II standards. Due to some international and development banks with multiple mandates, as defined by their bylaws (December 2/1/2013 to January 2/2014), they were allowed to provide loans for Egyptian banks according to the instructions mentioned above. Therefore, in a meeting of CBE's Board of Directors on December 28, 2016, the sixth paragraph of those guidelines was amended to state that if a loan (or debt) is obtained either directly from shareholders or the Central Bank of Egypt or any international/multilateral development bank, certain conditions apply. In line with this change and to ensure compliance, loans (debts) supported by either the CBE or other entities with follow-up processing will be subject to the guidelines issued on December 24, 2012. The amendment also confirms that such loans (debts) may not carry specific terms or conditions tied to the sources of funding and shall flow according to the guidelines issued by the CBE on December 24, 2012.