Regulatory Alerts2024-01-18
A circular dated January 18, 2024 regarding extending the target percentages for companies and micro, small, and medium enterprises until December 31, 2024.
In Cairo on January 18, 2024, the Chairman/Chairman of the Board of Bank Al-Takamul stated that, taking into account the published Annual Report on February 22, 2021, which mandated banks to increase their reserve funds and guarantee facilities (direct and indirect) for small, micro, and medium-sized enterprises at a rate of up to 10%, 20% or 25% according to the Central Bank in December 2020. Furthermore, referring to the annual report dated December 15, 2022, concerning the validity period of these mandates as per the published Annual Report on February 22, 2021, which originally had a one-year term ending December 31, 2023, the Central Bank Board meeting held on January 16, 2024 approved the following measures: 1. Extending the duration of the aforementioned rules by one year until December 31, 2024, requiring banks to achieve a 25% reserve ratio in accordance with the Central Bank as of December 31, 2020 for small, micro, and medium-sized enterprises. Allocating 10% of this amount for funding small businesses, valid for an additional year ending December 31, 2024. 2. Providing full flexibility to banks in fulfilling all types of guarantees related to the allocated indirect loan guarantee facilities in line with the unsecured studies conducted for clients, as well as obtaining certificates if necessary. 3. Continuing the remaining provisions that were not amended. Please note the importance of compliance with what has been stated. I respectfully request your high regard and understanding.