Banking Business Proclamation No. 1360/2025

FEDERAL NEGARIT GAZETTE

OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA


፴፩ኛ ዓመት ቁጥር ፳፰	31th Year No.28
አዲስ አበባ መጋቢት ፲፪ ቀን ፳፻፲፯ ዓ.ም	ADDIS ABABA 12th ,March , 2025

ማውጫ | Content

አዋጅ ቁጥር ፲፫፻፷/፳፻፲፯ | Proclamation No. 1360/2025 የባንክ ሥራ አዋጅ..................................................ገጽ ፲፯፯፻፸ | Banking Business Proclamation..........Page 17770

PROCLAMATION No. 1360/2025

A PROCLAMATION TO PROVIDE FOR BANKING BUSINESS

WHEREAS, banks play an important role in economic development through mobilization of funds and channeling same to various sectors and occupy a central place in the payment and settlement system of the country's economy;

WHEREAS, opening the banking sector for foreign investment with a carefully designed legal and regulatory framework, is believed to improve competitiveness and efficiency of the sector and contribute to sustainable economic growth;

WHEREAS, it is found essential to have an effective resolution regime that provides the resolution authority that is, National Bank with a broad range of powers and options needed to resolve a bank considered no longer viable and has no reasonable prospect of becoming so in a manner that does not cause severe systemic disruption and loss;

WHEREAS, the banking business, if not properly managed, would have the potential to generate financial system and macroeconomic instability;

WHEREAS, the cost of financial system and macroeconomic instability to the general public and the Government is significant;

WHEREAS, it is found essential to continually ensure safety, soundness and stability of the banking business by having a comprehensive legal framework for the licensing and supervision of the banking sector which is well aligned with the current and emerging development of the sector;

NOW, THEREFORE, in accordance with Article 55(1) of the Constitution of the Federal Democratic Republic of Ethiopia, it is hereby proclaimed as follows.

PART ONE

GENERAL

1. Short Title
This Proclamation may be cited as "Banking Business Proclamation No.1360/2025"

2. Definitions
In this Proclamation unless the context requires otherwise:

5/ "Bank" means a private or state owned bank, a foreign bank subsidiary or a branch of a foreign bank licensed by the National Bank to undertake banking business;

6/ "Banking Business" means any business that consists of the following activities:

a) receiving deposits from the public through means that National Bank, through a Directive or Practice, has declared to be an authorized manner of receiving funds;

b) using the funds referred to in paragraph (a) of this Sub-Article, in whole or in part, for the account and at the risk of the person undertaking banking business, for loans, asset based financing or investments in a manner determined by National Bank Directive or practice;

c) the buying and selling of gold and silver bullion and foreign exchange;

d) the transfer of funds to other local and foreign persons on behalf of the banks themselves or their customers;

e) the discounting and negotiation of promissory notes, drafts, bills of exchange and other evidence of debt;

f) interest free banking service;

g) agent banking service;

h) digital financial services;

i) issuance of guarantee; and

j) any other activity recognized as customary banking business, which a bank engaged in the activities described from paragraph (a) to (i) of this Sub-Article, may be authorized to undertake by the National Bank.

7/ "Bank Group" means both domestic and foreign bank and all of its subsidiaries, branches, affiliates and holding company, wherever located, that the National Bank determines to be taken into account for the purpose of implementing this Proclamation;

8/ "Beneficial Owner" means any natural person who ultimately owns or controls a customer or an account, the person on whose behalf a transaction is being conducted, or the person who ultimately exercises effective control over a legal person or arrangement;

12/ "Chief Executive Officer" means a person, by whatever title that person may be referred to, who is primarily responsible for the day-to-day management of the affairs of a bank;

13/ "Commercial Code" means Commercial Code of Ethiopia Proclamation No. 1243/2021;

14/ "Crisis" means significant deterioration of a bank's financial condition in respect of financial soundness indicators in a manner threatening its solvency or stability and could potentially disrupt the broader financial system as determined by National Bank;

18/ "Director" means any member of the board of directors of a bank, by whatever title he may be referred to;

19/ "Domestic Bank" means a bank incorporated in Ethiopia; and is conducting banking business in Ethiopia;

25/ "Foreign Bank" means a bank or a bank group incorporated under the laws of a country other than Ethiopia with a banking license issued from its home country regulator and conducts its banking business in its country of incorporation or other jurisdictions as the case may be;

26/ "Foreign Bank Branch" means deposit or non-deposit taking branch of a foreign bank, having no separate legal existence;

30/ "Foreign National of Ethiopian Origin" means a person with valid identification card obtained pursuant to Providing Foreign Nationals of Ethiopian Origin with Certain Rights to be Exercised in their Country of Origin Proclamation No.270/2002 attesting that he is foreign national of Ethiopian origin;

36/ "Illiquid" means the financial condition of a bank where such bank becomes unable to meet its short term obligations;

37/ "Independent Director" means non-executive member of the board who does not have any management responsibilities within the bank, who is not shareholder of the bank and is not under any other influence, internal or external or political that would impede the board members exercise of objective judgment;

43/ "Investment Bank" means as defined under Capital Market Proclamation No.1248/2021;

44/ "Liquidation" means the winding-up process that includes collecting, valuing, and converting the assets of a failed bank or a bank decided to be liquidated to cash to satisfy the claims of its creditors;

47/ "Merger" means a voluntary or statutory fusion of two or more banks where one or more banks lose their existence and a new bank is formed;

48/ "National Bank" means the National Bank of Ethiopia;

54/ "Qualification of Competency" means education, experience, competence, fitness and propriety as determined by Directive to be issued by National Bank;

59/ "Resolution Plan" means a comprehensive document prepared by National Bank detailing the characteristics and critical functions of a likely to fail or failed bank and puts forward preferred resolution strategy and tools to be employed with the view of protecting depositors, minimizing the losses to the resultant liquidation estate, ensuring continuity of critical functions and avoid threat to the stability of the financial system;

62/ "Significant Ownership" means direct or indirect shareholding of two or more percent of the total subscribed capital of a bank by a person;

66/ "Strategic Investor" means a foreign bank or a bank group with inbuilt good reputation in its country of incorporation or owned by the Government of the country where it was incorporated or International Development Finance Institution, private equity fund or other similar entities to be determined by National Bank and meet the minimum vetting criteria to be set by National Bank Directive;

PART TWO

LICENSING BANKING BUSINESS

3. Requirements for Banking Business License and Authorization

1/ No person shall engage in banking business in Ethiopia without obtaining banking business license or authorization from the National Bank.

4/ Without the prior written approval of National Bank, no bank shall:

a) transact a banking business at any other place than that authorized by National Bank, or close or relocate an existing place of business;

b) introduce new banking products and services;

c) effect major changes in its line of business;

6/ Notwithstanding paragraph (a) of Sub-Article (4) of this Article, upon securing authorization by the National Bank, a bank may engage in short time saving mobilization campaigns for a short period, or provide banking services at special event and/or cash collection services at customer's premises.

4. Preconditions of Licensing

1/ The following conditions shall be fulfilled, as appropriate, to obtain a banking business license:

a) a duly completed application form and other accompanying documents as specified by National Bank Directive, shall be submitted;

b) an investigation fee, as determined by National Bank, shall be paid at the time of submitting the application;

5. Issuance of License

1/ The National Bank shall decide on a banking business license application within 90 days from the last date of receipt of all information to be submitted in accordance with Article 4 of this Proclamation.

6. Commencement of Operation

A bank to which a license is granted shall:

1/ fulfill, before commencing operation, sound information management and internal control systems, including those related to the detection and prevention of criminal activities, risk management policies and procedures, and human resource organization and such other essential obligations to carry out banking business as determined by a Directive to be issued by National Bank; and

2/ commence its operation within twelve months from the date of issuance of the license.

PART THREE

MODES OF FOREIGN NATIONALS PARICIPATION IN BANKING BUSINESS

10. Banking Business by Foreign Nationals

1/ General Provisions:

a) A foreign bank which is well established, reputable and financially sound may be allowed to establish partially or fully owned foreign bank subsidiary or open a foreign bank branch or a representative office or acquire shares of a bank.

c) Notwithstanding the provisions of Sub-Articles 1(a) and 1(b) of this Article, direct shareholding by a strategic investor in an existing or a new domestic bank shall be limited to forty percent of total subscribed shares of a bank; and such holding by non-strategic foreign national natural person and foreign juridical person shall be limited to seven percent and ten percent of subscribed shares of a bank, respectively.

d) Notwithstanding the provisions of Sub-Article 1(c) of this Article, aggregate shareholding by foreign nationals and foreign-owned Ethiopian organizations in a bank shall be limited to 49 percent of the total subscribed shares of a bank.

j) Notwithstanding the provisions of Sub-Article 1 (i) of this Article, foreign-owned Ethiopian organizations fully or partially owned by foreign nationals may repatriate any proceeds in accordance with percentage shareholding initially paid in foreign currency.

2/ Banking Business by Foreign Bank Subsidiary:

a) The minimum initial capital required to establish a foreign bank subsidiary shall be determined by National Bank Directive;

3/ Banking Business by Foreign Bank Branch:

a) A foreign bank may be allowed to open deposit taking or non-deposit taking foreign bank branch intending to be funded by other sources including borrowings in Ethiopia, but may not be allowed to open both types of branches at the same time;

4/ Operation of Representative Office:

A representative office of a foreign bank shall engage only in representational functions such as liaison, marketing, research and other similar activities as may be determined by National Bank Directive.

11. Banking Business by a Foreign National of Ethiopian Origin

Notwithstanding the provision of Article 10 of this Proclamation, the manner of share purchase in a bank in Birr or establishment of a bank by a person considered as foreign national of Ethiopian origin as per the relevant law or by an enterprise fully owned and established by these individuals and preferred to be treated as domestic investor shall be determined by National Bank Directive; however, any proceed or income generated from this investment shall not be transferred abroad in foreign currency.

PART FOUR

SHARES AND SHAREHOLDER MEETINGS

12. Shares and Register of Shares

1/ Bank shares shall be of one class and registered as ordinary shares of the same par value.

2/ Notwithstanding the provisions stipulated in other laws regarding the dematerialization and recording of securities in an electronic format, a bank shall keep a register of shares as determined by National Bank, which shall show names, addresses and gender of shareholders; number and amount of subscribed and paid shares and voting right.

13. Limitations on the Acquisition of Shares

1/ Unless explicitly provided in this Proclamation and with exception of the Federal Democratic Republic of Ethiopia:

a) A natural person shall not directly hold more than seven percent of a bank’s total subscribed shares; and

b) A juridical person shall not directly hold more than ten percent of a bank’s total subscribed shares.

14. Shareholders General Meeting

1/ National Bank may assign observers to attend any general shareholders meeting or board meetings of a bank.

PART FIVE

EMPLOYEES AND DIRECTORS OF A BANK

16. Employment of Foreign Nationals in a Bank

1/ A bank, after securing approval from the National Bank, may be allowed to employ foreign nationals for chief executive officer or senior executive officer positions or other positions requiring specialized knowledge or expertise through recruitment or staff transfer, on contract with a maximum term of five years. The maximum number and/or percentage share of foreign employees in a bank may be determined by National Bank Directive.

4/ A bank after hiring or assigning foreign national through staff transfer shall ensure that knowledge and skill transfer to Ethiopian nationals is made adequately and satisfactorily and assignment of foreign national employees shall be made in a manner that ensures proper transfer of knowledge and skill to Ethiopian nationals.

17. Appointment of Directors and Executive Officers of a Bank

1/ Without prejudice to the provisions of Sub-Article (1) of Article 18 of this Proclamation, a director shall be a person with honesty, integrity, diligence, and good reputation and able at all times to pass the qualification of competency prescribed in the relevant Directive to the satisfaction of the National Bank.

5/ National Bank may issue Directive on:

a) competence to be fulfilled by directors;

b) the minimum number and composition of directors, including independent directors in the membership of the board of a bank;

18. Prohibitions

1/ No person who has been convicted of breach of trust or a fraud, whether in Ethiopia or elsewhere may be a director or an employee of a bank.

19. Cessation of Banking Management Functions

Any person who is a director or chief executive officer or senior executive officer or otherwise participates, directly or indirectly, in the management of a bank shall cease to exercise such function if:

1/ he or the business organization in which he is a director or executive officer, has instituted bankruptcy proceedings or declared bankrupt, or his or the business organization assets have been sequestrated because of bankruptcy or been foreclosed by a bank because of failure to repay a loan granted by the bank;

20. Suspension and Removal Measures to be Taken by National Bank

1/ National Bank may, for sufficient cause, suspend or remove a director, a chief executive officer or a senior executive officer of a bank.

PART SIX

FINANCIAL OBLIGATIONS AND LIMITATIONS

21. Maintenance of the Required Capital

1/ The minimum capital and reserves to be maintained by banks and the rules for their computation shall be determined by National Bank Directive.

23. Maintenance of Adequate Liquidity and Reserve Balance

1/ A bank shall maintain adequate liquid assets in accordance with the Directive to be issued by National Bank.

24. Provisioning, Depreciation Loss Coverage and Amortization Requirements

1/ Provisions shall be made by a bank for the following items:

a) loans and advance that are impaired or other uncollected receivables;

4/ A bank shall amortize its capitalized expenditure within a maximum period of five years.

25. Limitations on Certain Banking Business Services

1/ The conditions and limitations on investments of banks, loans or other credit facilities, guarantee or any other commitment or contracts given by a bank, directly or indirectly to a person, including related parties shall be determined by National Bank Directive.

27. Appointment of External Auditors

1/ A bank shall appoint external auditors; and the appointment of such auditors shall be approved by National Bank. National Bank shall have the power to reject and rescind the appointment of an external auditor who is deemed to have inadequate expertise or independence, or is not subject to or does not adhere to established professional standards.

28. External Audit Report

1/ The auditor of a bank shall submit to the National Bank a complete audit report, including audit findings and recommendations, within the time limit set by National Bank.

2/ The National Bank, if not satisfied with the external audit report, may in collaboration with pertinent regulatory organ initiate and order a second audit or require the prompt appointment of a new auditor who shall make an independent audit.

PART EIGHT

INFORMATION DISCLOSURE, REPORT SUBMISSION AND EXAMINATION OF BANKS

29. Report Submission and Information Disclosure

1/ Every bank shall submit to the National Bank duly signed financial statements and other reports as prescribed by it, in accordance with reporting template, submission modality and time period determined by National Bank.

3/ The exhibition and publishing of financial statements pursuant to Sub-Article (2) of this Article shall occur within two weeks after the annual ordinary general shareholders' meeting.

30. Examination of Banks

1/ In addition to off-site examination, the National Bank may, periodically or at any time, without prior notice, make, or cause to be made, an on-site examination of a bank.

31. Examination Report

1/ The draft examination report shall be communicated to the examined bank and the examined bank shall be given an opportunity to express its views on the report.

32. Prompt Corrective Actions

1/ Where an off-site or on-site examination of a bank results in a finding that the bank has failed to comply with the relevant laws and Directives or with the terms and conditions of license or has engaged in unsafe or unsound practices or activity that could pose risk to the bank or to the banking system or engaged in practices detrimental to the interests of depositors or has serious weaknesses in its corporate governance, the National Bank may:

c) instruct in writing corrective actions to be taken by the bank;

j) cause the down grading or closure of existing branches or sub-branches, as appropriate;

PART NINE

MERGER, ACOUISITION AND TRANSFER OF SIGNIFICANT OWNERSHIP, ASSETS AND LIABILITIES

33. Merger and Acquisition

1/ A bank shall not enter into a voluntary merger without the prior written approval of the National Bank.

34. Significant Ownership Transfer

1/ Any share transfer or purchase that causes significant ownership in a bank shall be approved by National Bank prior to being recorded in the share register.

35. Assets and Liabilities Transfer

1/ Unless it is under normal course of business; a bank shall not carry out assets and liabilities transfer to another bank; or shall not enter into any agreement for the sale or disposal of its business, without prior written approval of the National Bank.

PART TEN

RESOLUTION, LICENSE REVOCATION AND LIQUIDATION

36. Recovery Plan

1/ A bank shall draw up a recovery plan which shows the measures to be taken to restore its financial position in the event of severe situations of stress.

37. Resolution Plan

1/ National Bank, being a resolution authority, shall, in consultation with Ethiopian Deposit Insurance Fund, draw up a resolution plan for systemically important bank as determined by the National Bank and for other banks under severe distress as may be necessary.

38. Crisis Management

1/ A national crisis management committee chaired by National Bank and comprising of relevant stakeholders including Ministry of Finance, Ethiopian Deposit Insurance Fund, Ethiopian Capital Market Authority, and other similar institutions to be determined by National Bank, shall be established so as to exchange information, develop and implement crisis management framework and enhance coordination and cooperation among different institutions.

39. Appointment of Official Administrator

1/ National Bank may appoint an official administrator for a bank if:

a) The required capital adequacy ratio of the bank falls by fifty percent from the minimum set by National Bank and/or its paid up capital is eroded by fifty percent;

2/ Notwithstanding the provisions of Sub-Article (1) of this Article, National Bank may approve the request of a bank to be put under official administration as supported with resolution of the bank’s shareholders and appoint official administrator accordingly.

40. Qualifications of Official Administrator

1/ An official administrator shall be of the highest professional qualifications and personal integrity, as determined by National Bank.

41. Term of Office for Official Administrator

A bank may remain under official administration for a period of six months effective from the date specified in the notice as stipulated under Article 39 (3) hereinabove for first instance; and the National Bank may extend the period for two consecutive periods of three months each, if it deems it necessary to rehabilitate the bank.

43. Powers and Duties of the Official Administrator

1/ An official administrator appointed pursuant to Article 39 of this Proclamation shall be vested with the full and exclusive powers and duties of shareholders general meeting, board of directors and management and assume control of the bank under official administration; and no action may be taken by other bodies on behalf of the bank without the prior approval of the official administrator.

44. Review Against Appointment of Official Administrator

1/ Shareholders of a bank holding in the aggregate at least twenty-five percent of the voting shares of the bank may submit a request for review to the Federal High Court against the appointment of an official administrator within thirty days after the date on which the official administration is announced in newspaper pursuant to Sub-Article (3) of Article 39 of this Proclamation.

45. Oversight Over Official Administrator

1/ The official administrator shall be accountable only to the National Bank and shall at any time act in accordance with the approved action plan, instructions and guidance from the National Bank and relevant laws.

46. Suspension of Dividends

The official administrator shall immediately suspend the payment of any dividends or other form of capital distribution to shareholders and any payment to directors other than for salaries or services provided to the bank.

47. Suspension of Rights

1/ National Bank may impose a moratorium or suspend some or all payments by a bank under official administration except for payments to central clearing counter parties and to payment, settlement and clearing systems.

48. Rehabilitation Options for Official Administrator

1/ In order to implement recapitalization, the official administrator, with the approval of National Bank, may reduce the value of shares held by shareholders regardless of any prohibition in any existing laws.

49. Termination of Official Administration and/or Official Administrator

1/ An official administration shall be terminated at the expiry of the first instance period or any extension made thereof as specified under Article 41 of this Proclamation.

50. Revocation of License

1/ National Bank may revoke the license of any bank immediately if:

a) it is confirmed that the licensing of the bank was made on the basis of false or wrong information;

b) the bank has failed to commence operations within twelve months following the grant of the license;

51. Appointment of Liquidator

1/ National Bank shall appoint a liquidator to take control and liquidate a bank if it has revoked the license of the bank as stipulated under Article 50 (1) and (2) of this Proclamation.

52. Review Against Appointment of Liquidator

1/ Shareholders of a bank holding in the aggregate at least twenty-five percent of the voting shares of the bank may request a review to the Federal High Court against the appointment of a liquidator within thirty days after the date on which the liquidation is announced in newspaper pursuant to Article 51(2) of this Proclamation.

53. Qualifications of Liquidator

1/ A liquidator to be appointed by National Bank shall, in the opinion of the National Bank, be of the highest professional qualifications and personal integrity.

54. Remunerations for the Service of Liquidator

1/ The amount of remunerations for services of a liquidator shall be determined by National Bank.

55. Duration of Liquidation

1/ The duration of liquidation of any bank shall be determined by National Bank.

56. Effects of Appointment of Liquidator

Upon the publication of the appointment of a liquidator to a bank by the National Bank in newspaper of wider circulation and its website pursuant to Sub-Article (2) of Article 51 of this Proclamation:

1/ No action may be taken on behalf of the bank without the prior approval of the liquidator;

57. Repudiation of Contracts

1/ The liquidator may, within thirty days of the date of appointment, repudiate any non-performed or partially performed contract if it is believed that the fulfillment of the contract is burdensome for the bank in consideration of protecting the interests of depositors.

58. Powers and Duties of the Liquidator

1/ A liquidator appointed pursuant to Article 51 of this Proclamation shall be vested with the full and exclusive powers and duties of management and control of the bank under liquidation.

59. Preliminary Procedures for Liquidation of a Bank

1/ The liquidator shall have unrestricted access to and control over the offices, books of account, other records and other assets of the bank.

60. Decision on Claims

1/ Within two months after the last day for filing objections specified in the notice referred to in Sub-Article (8) of Article 59 of this Proclamation, the liquidator shall:

a) reject any claim if he doubts the validity thereof;

61. Finalization of Schedule of Allowable Claims and Distribution

1/ Any depositor or creditor or shareholder of the bank may file an objection to the content of the schedule of allowable claims before the final date for objections announced pursuant to Sub-Article (2) of Article 60 of this Proclamation.

62. Priorities in Payment of Claims

1/ In any liquidation of the assets of a bank, secured claims, if any, shall be paid in accordance with their terms to the extent of the realization if proceeds are lower than the claim. Other claims shall have priority against the general assets of the bank in the following order:

a) Remuneration of the liquidator and necessary and reasonable expenses incurred by him in implementing the provisions of this Proclamation;

63. Conclusion of Liquidation

1/ Once all assets of the bank have been disposed of in accordance with the provisions of this Proclamation, the liquidator shall prepare a report on the transactions and liquidations carried out under the liquidation, and submit it to National Bank for approval.

64. Review Against Actions of Liquidator

1/ A request for review against the action of any liquidator may be brought before the Federal High Court within thirty days from the date on which such action has been taken.

65. Voluntary Liquidation

1/ A bank shall not enter into voluntary liquidation without resolution of general meeting of its shareholders as per relevant laws and prior written approval by National Bank.

66. Applicability of Other Laws

The provisions of the Commercial Code and other relevant laws shall be applicable with respect to official administration and liquidation of banks in so far as they are not inconsistent with the provisions of this Part.

PART ELEVEN

MISCELLANEOUS PROVISIONS

67. Establishment of Subsidiary

1/ National Bank may allow a bank to establish a subsidiary.

68. Establishment of a Specialized Bank

1/ National Bank may allow for the establishment of a specialized bank; or the conversion of a specialized bank to conventional bank or vice versa.

69. Insolvent Bank

Any insolvent bank shall not accept deposits.

70. Engagement in Non-Banking Undertakings

1/ A bank shall not engage in non-banking undertaking.

71. Examination Fee

National Bank, in accordance with a Directive to be issued for this purpose, may require a bank under its supervision to cover the cost of off-site and on-site examination.

72. Unclaimed Liabilities

1/ A bank holding any account of liabilities which have not been claimed, the principal balance of which has not increased or decreased, for which pass-book or other records have not been presented or any correspondence has not been made, for fifteen consecutive years shall transfer the fund in such account to the National Bank.

73. Know-Your-Customer Standards

The National Bank may issue a Directive prescribing standards on a bank’s due diligence in knowing its customers and reporting of suspicious transactions.

74. Relation Between Banks and Insurance Companies

1/ Transactions, including the provision of loans, the acceptance of deposits and the provision of banking and insurance services, between a bank and an insurance company shall be undertaken on the same terms and conditions as provided to any other person.

75. Security Measures and Data Management

1/ In order to protect the confidentiality, integrity, and availability of customer data, a bank shall implement and maintain a comprehensive data security program, including:

a) maintenance of appropriate physical, logical, and administrative safeguards to prevent unauthorized access, disclosure, alteration, or destruction of customer data;

77. Advertisement by a Bank

1/ National Bank may, at any time, direct a bank to withdraw, amend or refrain from announcing radio or television advertisement, digital advertisement, a poster, billboard, brochure, circular, or other document, and advertisement in a newspaper or magazine that it considers to be false, misleading, deceptive, offensive or detrimental to the safety and soundness of a bank or banking system.

78. Loan and Foreign Currency Portfolio Limits

National Bank may issue a Directive on loan and foreign currency portfolio allocation limits of a bank.

79. Cross Border Borrowing, Lending and Investment

1/ A bank may be allowed to borrow from foreign sources, and conditions for such borrowings shall be determined by National Bank Directive.

80. Outsourcing Banking Activities

The minimum conditions and requirements for outsourcing of activities by a bank shall be determined by National Bank Directive.

81. Accessibility and Suitability of Banking Services for Persons with Disabilities

1/ A bank shall provide accessible and suitable banking services for persons with disabilities.

82. Interest Free Banking Service

1/ Without prejudice to the requirements specified under the provisions of this Proclamation, the National Bank shall issue Directive to prescribe additional conditions and requirements for the licensing and supervision of an interest free bank and for supervising an interest free bank and a bank providing interest free banking window in respect of the peculiar nature and modality of interest free banking service from that of conventional banking service.

83. Protection of Financial Service Consumers

Minimum conditions for financial service consumers’ protection by banks and other related issues shall be determined by National Bank Directive.

84. Cooperation and Coordination with Similar Cross-Border and Domestic Authorities

1/ The National Bank, in consultation with relevant Government bodies as appropriate, may conclude an agreement with domestic or foreign regulatory, resolution, or monetary authority for the purpose of coordinating, cooperating, and exchanging information concerning any of the following matters:

85. Implementation of International Banking Supervision Principles and Standards

National Bank may issue Directives to implement Basel Committee for Banking Supervision Principles and Standards; and other international standards on banking supervision that are supposed to enhance safety, soundness and stability of Ethiopian banking system.

87. Protection of Board Members, Employees and Agents of the National Bank from Personal Liability

1/ Any board member, employee or agent of the National Bank may not be subject to any personal liability or any other claim for their bona fide acts done for the purpose of carrying out this Proclamation and other laws related to the authority and functions of the National Bank.

89. Implementation of Regulatory Sandbox

1/ With the objective of fostering financial innovation and promoting financial inclusion, National Bank may establish and implement a regulatory sandbox framework that will enable testing and introduction of new and innovative banking services and products to the market.

90. Penalties

1/ Any person who contravenes the provisions of Sub-Article (1) of Article 3 of this Proclamation shall be punished with a fine of Birr 20,000 in respect of each day on which the contravention continues and with a rigorous imprisonment from 10 to 15 years.

91. Power to Issue Regulation and Directive

1/ The Council of Ministers may issue Regulations necessary for the implementation of this Proclamation.

2/ The National Bank may issue Directives necessary for the implementation of the Proclamation and Regulation issued pursuant to Sub-Article (1) of this Article.

92. Transitional Provision

Notwithstanding the provisions of this Proclamation, Foreign Nationals of Ethiopian Origin who have acquired shares in bank in accordance with Banking Business Proclamation No 592/2008 (As amended by Proclamation No 1159/2019) shall be entitled to be treated as a domestic investor, in accordance with relevant laws.

94. Repealed and Inapplicable Laws

1/ Banking Business Proclamation No. 592/2008 and Banking (Amendment) Proclamation No. 1159/2019 are hereby repealed.

95. Effective Date

This Proclamation shall enter into force up on the date of publication in the Federal Negarit Gazette.

Done at Addis Ababa, On this 12th Day of March, 2025

TAYE ATSKE SELASSIE
PRESIDENT OF THE FEDERAL
DEMOCRATIC REPUBLIC OF ETHIOPIA