A circular dated April 2, 2026 regarding the establishment of a specialized department to manage and combat fraud in banks

Cairo on: April 2, 2026
Mr. Professor / Chairman of the Board of Directors Bank Greetings, In the context of the Central Bank's keenness to maintain the stability and safety of banks under its supervision, and given the threat that fraud risks pose to the stability of the banking sector, especially in light of rapid technological developments and increased reliance on electronic transactions and digital financial services. And in an endeavor to enhance the Central Bank's supervisory role and support banks' ability to confront various types of fraud and mitigate related risks, the Central Bank's Board of Directors, in its session held on March 31, 2026, approved the following:
Mandating all banks operating in the Arab Republic of Egypt to establish a specialized department for fraud management and combat, reporting directly to the Head of the Risk Sector, and whose work is submitted through the Risk Sector to the Risk Committee of the Board of Directors periodically. The responsibilities of the fraud combat department generally include: developing fraud combat policies and controls, conducting technical examination of internal and external fraud, monitoring all fraudulent practices across all banking or digital products, ensuring the integrity of retail banking documents for large, medium, small, and micro companies, in addition to examining counterfeit mandatory currencies. The general framework for the work of this department is as follows, at a minimum:

1. Developing a fraud combat strategy and policy for the bank and having it approved by the Board of Directors.
2. Conducting an objective and independent assessment of fraud risks related to various bank operating procedures, and ensuring the effectiveness of controls through studying the policies and procedures applied for fraud risk assessment.
3. Establishing a mechanism for continuous supervision and monitoring from a fraud combat perspective on banking operations of all types and products at all stages that include these banking operations, in line with laws and instructions.
4. Combating various fraudulent practices on digital payment systems by monitoring the movements of customers and contracted merchants on these systems, which include, for example: continuous monitoring of transactions (bank cards of all types – various payment acceptance systems such as point-of-sale and electronic wallets and e-commerce – digital services, etc.).
5. Receiving reports of internal and external fraud cases and conducting technical examinations for cases reported to this department or discovered during various operations in cooperation with the relevant sectors.
6. Carrying out technical examinations of internal fraud cases, with other relevant sectors taking charge of their affairs thereafter based on the findings of the technical examination.
7. Examining counterfeit mandatory currencies (banknotes).
8. Preparing separate reports for each fraud case and establishing a database of detected fraud cases within the bank, along with corrective plans to ensure non-recurrence of fraud.
9. Ensuring the existence of procedures that demonstrate the continuous commitment of external parties contracted with the bank to the bank's fraud combat policies and procedures, with these included in the contracts signed with those parties.
10. Establishing internal warning lists including those involved in fraudulent acts, whether customers, companies, suppliers, employees, and others, according to a sufficient supervisory mechanism that ensures the adequacy, safety, and neutrality of data entry processes into these lists, and establishing a mechanism for checking warning lists before conducting banking transactions or operational or administrative work.
11. Creating a general framework that ensures coordination between the fraud combat department and other bank departments such as Internal Audit, Internal Control, Compliance, Customer Rights Protection, Information Security, Legal, Human Resources, etc.
12. Working on conducting awareness programs about various fraudulent practices for all bank employees (whether appointed or assigned outsourcing services) in addition to special programs for customers.
13. The bank shall complete all necessary procedures to obtain prior approval from the Central Bank before appointing a new fraud combat officer, according to the competence and technical suitability conditions for key officials in banks. For current managers responsible for fraud combat, their data shall be provided to the Central Bank in preparation for their registration in the Central Bank's records.
14. Commitment to reporting fraud cases to the Central Bank of Egypt through the reporting system of the Central Department for Combating Fraud and Financial Crimes or any newly developed means.
    Banks are granted a six-month grace period to comply with these instructions.
    Please accept our highest regards,
    Tarek El Kholy