Regulatory Alerts2017-03-02
A circular dated March 1, 2017 regarding temporary facilities granted in foreign currencies
First, it is essential to note that the Egyptian government has taken several measures to protect and support its banks and their clients during this challenging period. Some of these measures include: 1. The Central Bank of Egypt (CBE) injected liquidity into the banking system, offering loans at a 2% interest rate and allowing banks to refinance their short-term debts. 2. The CBE has allowed banks to extend credit facilities for individuals affected by the Coronavirus pandemic. 3. Banks are required to conduct financial solidity studies for each client to determine their ability to repay their outstanding loans within the agreed upon installments. 4. The government will subsidize the interest rate on loans provided by banks to small and medium-sized enterprises (SMEs) affected by the pandemic. 5. The CBE has postponed the repayment of existing credits for six months, with a possibility of extension up to one year. 6. The CBE has exempted some companies from having to pay their due interest on loans within the first two years of receiving the loan. This measure is expected to benefit those companies that have not requested an increase in loans. 7. In terms of companies ranked **second and third,** the Central Bank will provide: - 1. Banks are required to conduct financial solidity studies for each client to determine their ability to repay their outstanding loans within the agreed upon installments. - 2. The government will subsidize the interest rate on loans provided by banks to small and medium-sized enterprises (SMEs) affected by the pandemic. - 3. Companies ranked **second** may benefit from: - 1. Banks are required to conduct financial solidity studies for each client to determine their ability to repay their outstanding loans within the agreed upon installments. - 2. The government will provide a subsidy on the interest rates charged by banks on existing credits for up to six months, with the possibility of extension up to one year. - 3. In light of the recent changes in currency exchange rates, banks must take into consideration the fluctuations that have occurred since November 2016. I would like to remind everyone about the importance of adhering to all previous measures and anything else that may be required in this situation. Please accept my sincere appreciation for your understanding and cooperation."