Regulatory Alerts2020-03-20
A circular dated March 20, 2020 following the instructions issued regarding precautionary measures to confront the effects of the Corona virus.
In light of the Coronavirus (COVID-19) outbreak and the subsequent decisions by Central Bank of Egypt, the government is taking further measures to help citizens, businesses, and banks to manage financial issues during this challenging time. Here is a summary of what these measures are: 1. The Egyptian government announced that it will provide EGP 100 billion (around $6.5 billion) through the Central Bank of Egypt (CBE). This fund aims at supporting affected businesses, citizens and banks. 2. The CBE decided to cut the main operation rate by 3 percentage points to 9.25%. This will help reduce financing costs for businesses and individuals. 3. The decision of the government in increasing the maximum loan-to-deposit ratio from 10% to 15% will help banks manage their liabilities efficiently. 4. The Egyptian Authority (HE) has suspended the activity of non-bank financial institutions, including credit bureaus. This suspension is due to the need for these financial institutions to support citizens and businesses through this difficult period. 5. CBE will suspend the activity of non-banking financial institutions, including credit reporting agencies for a month starting from March 30, 202. 6. The government has decided not to impose any fines or penalties on banks during these challenging times. 7. The Central Bank of Egypt (CBE) will allow the extension of personal and business loans by up to six months for businesses and individuals who have been affected due to the spread of the Coronavirus (COVID-19). 8. CBE has decided to cut interest rates on deposits, savings accounts, and loans offered by banks to citizens and businesses. Here are the new rates: - Personal Deposit Accounts: 0% - Business Deposit Accounts: 0% - Personal Savings Accounts: 0% - Business Savings Accounts: 0% - Personal Loan Accounts: New rates will be set by the banks. - Business Loan Accounts: New rates will be set by the banks. 9. CBE decided to reduce the fees that banks charge their clients for some banking services, which include card management and money transfer services. Here are the new reduced fees: - ATM withdrawal: EGP 1 instead of EGP 5. - Banking Services Charges (Excluding Money Transfer and Card Management Services): EGP 30 instead of EGP 40. 10. The Central Bank of Egypt (CBE) has decided not to impose any additional fees or charges on banks during these challenging times. These measures aim to support citizens, businesses, and banks while ensuring financial stability and transparency within the banking system in Egypt during the Coronavirus (COVID-19) pandemic.