Regulatory Alerts2021-04-25
Added · Updated
Capital Goods Finance Operational Modality (Amendment) Directive No. CGFB/11/2021
The National Bank of Ethiopia amends the Capital Goods Finance Operational Modality Directives by adding Article 3.5, which requires periodic lease installment payments to be set in writing with a detailed schedule in Ethiopian Birr. Article 4.1 is replaced to mandate that companies establish internal policies addressing capital goods financing needs for the manufacturing sector and Small and Medium Enterprises, including the allocation of specific portfolio percentages. Article 6.2 is updated to allow foreign companies to borrow from foreign sources in accordance with External Loan and Supplier's Credit Directives No. FXD/47/2017 and its amendments. These changes enter into force on June 15, 2021.
የኢትዮጵያ ብሔራዊ ባንክ NATIONAL BANK OF ETHIOPIA ADDIS ABABA LICENSING AND SUPERVISION OF THE BUSINESS OF CAPITAL GOODS FINANCE COMPANIES
"Capital Goods Finance Operational Modality (Amendment) Directive No. CGFB/11/2021"
Whereas, it is found necessary to amend capital goods finance operational modality Directives No. CGFB/09/2019;
Now, therefore, in accordance with the powers vested in it under Article 18 (4) of Capital Goods Leasing Business Proclamation No. 103/1998 as amended by article 6 of the Capital Goods Leasing Business (Amendment) Proclamation No. 807/2013, the National Bank of Ethiopia has issued this Directive.
1. Short Title
This Directive may be cited as "Capital Goods Finance Operational Modality (Amendment) Directive No. CGFB/11/2021".
2. Amendments
Capital Goods Finance Operational Modality Directives No. CGFB/10/2019 is hereby amended as follows:
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A new article 3.5 is added following article 3.4 of the Directive: "3.5. In a lease agreement between the lessee and the company, the periodic lease installment payment shall be set in writing with detail schedule of payments during the lease term in Ethiopian Birr".
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Article 4.1 and 4.2 of the Directive are deleted and replaced by the following new article 4.1: "4.1. A company shall clearly put in place in its internal policy and procedure on how to address/serve the capital goods financing need of manufacturing sector and
አድራሻ፡ ሱዳን ጎዳና ፖ.ሣ.ቁ. 5550/2048 ፋክስ ቁጥር 0115 51 45 88 ስልክ ቁጥር 0115 51 74 30 አዲስ አበባ ADDRESS: SUDAN STRCET P.O.BOX 5550/2048 FAX No. 0115 51 45 88 TEL. No. 0115 51 74 30 ADDIS ABABA TELEGRAPHIC ADDRESS: NATIONBANK CODES-USED PETERSON 3rd & 4th ED BENTLEY'S 2nd PHRASE A.B.C. 6th EDITIO E-mail: nbe.excd@ethionet.et Website. www.http://www.nbe.gov.et
የኢትዮጵያ ብሔራዊ ባንክ National Bank of Ethiopia
Small and Medium Enterprises including allocation of a certain percentages of its portfolio".
- Article 6.2 is deleted and replaced by the following new article 6.2:
"6.2. Notwithstanding sub-article 6.1 of the Directive, a foreign company can borrow from foreign sources in accordance with External Loan and Supplier's Credit Directives No. FXD/47/2017 and its subsequent amendments thereof".
3. Effective Date
This Directive shall enter into force as of the 15th day of June 2021.
Yinager Dessie (PhD) Governor
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