Chapter One: Rules for Licensing and Registering a Foreign Bank or Branch

-1 Licensing Conditions 1:

1-1 The applicant must adopt one of the following legal forms:

1-1-1 An Egyptian joint-stock company with all its shares fully paid and registered, and with a capital of no less than five billion Egyptian pounds or its equivalent in free currencies.

2-1-1 A branch of a foreign bank whose headquarters has a specific nationality and is subject to the supervision of a supervisory authority in the country where its headquarters is located, and with a capital of no less than one hundred and fifty million US dollars or its equivalent in free currencies allocated for the activity of the foreign bank branch in the Arab Republic of Egypt.

2-1 Clear ownership structure, including Related Parties, ensuring the identification of the Ultimate Beneficial Owner and verification of the legitimacy of the source of funds.

3-1 The licensing must not conflict with the general economic interest of the State.

4-1 The licensing must not violate competition rules and prevent monopolistic practices.

5-1 The trade name adopted by the bank must not be identical or similar in a way that causes confusion with the name of another bank or establishment.

6-1 Competence of the financial and economic feasibility study, including a statement of the purpose of establishment, its work plan, the nature of activities and services it will perform, and a market study demonstrating its ability to mobilize and invest savings.

7-1 Integrity, good reputation, and financial soundness must be present in the concerned parties (such as founders, ultimate beneficiaries of corporate founders, members of the Board of Directors, and senior executives).

8-1 In the event that the foreign bank or foreign financial institution obtains a credit rating from one of the global credit rating agencies (Moody's, S&P, Fitch Ratings), documentation confirming this must be submitted.

In addition to the above, the following conditions apply to the branch of a foreign bank or the Egyptian joint-stock company affiliated with a foreign bank or a foreign financial institution:

The headquarters must have a specific nationality.

Central Bank of Egypt Deputy Governor's Letter dated November 14, 2021 1 1

The headquarters must have policies to combat corruption, bribery, money laundering, and terrorist financing.
The headquarters must be subject to the supervision of the corresponding supervisory authority in the country where it is located, and obtain approval from that authority to operate in the Arab Republic of Egypt.
The corresponding supervisory authority must apply the principle of consolidated supervision and express no objection to applying the principle of joint supervision with the Central Bank.

1-2 Submit an application to the Central Bank to obtain initial consent to take steps to establish a bank or branch of a foreign bank, accompanied by the documents referred to in item (3) below, and proof of payment of the application examination fee of one million pounds for the bank taking the form of an Egyptian joint-stock company or fifty thousand US dollars for the branch of a foreign bank.

2-2 The application is submitted to the Board of Directors of the Central Bank to issue a decision regarding it, and the application is decided within ninety days from the date of submission of complete required documents for the bank taking the form of an Egyptian joint-stock company. The Board of Directors may extend this period for a similar period in the case of a bank taking the form of a foreign bank branch. In that case, the cooperation policy agreed upon between the Central Bank and the relevant foreign authority in the country where the headquarters is located is observed, for coordination between them in the field of supervision and oversight.

3-2 In case of rejection of the application, the concerned parties are notified thereof within thirty days from the date of the rejection decision.

1-1-3 A copy of the draft Articles of Association including a statement of the names, nationalities, and addresses of the founders and the share of each in the capital, and copies of the Articles of Association of the founders who are legal persons.

2-1-3 A statement clarifying the ownership structure, including Related Parties, ensuring the identification of the Ultimate Beneficial Owner and verification of the legitimacy of the source of funds, and a statement of the percentage of shares to be offered in a public subscription.

3-1-3 A statement of the participation percentage of each founder and the related parties in other financial institutions inside and outside the Arab Republic of Egypt, in accordance with the concept of Related Parties stipulated in the Central Bank and Banking System Law.

4-1-3 Documentation confirming that none of the founders, major shareholders, members of the Board of Directors, or ultimate beneficiaries are included in lists related to sanctions (local and international).

5-1-3 A certificate confirming that no bankruptcy or insolvency judgments, or any crime against honor, have been issued against any of the founders.

6-1-3 A statement of the proposed name of the bank in Arabic and foreign languages, accompanied by a certificate of non-confusion issued by the Ministry of Supply and Internal Trade (Commercial Register).

7-1-3 The bank's objectives, duration, and address of its headquarters.

8-1-3 The financial and economic feasibility study of the bank for a period of no less than five years, including in particular:
1-8-1-3 The purpose of establishing the bank.

2-8-1-3 The services the bank will provide.

3-8-1-3 A market study demonstrating the bank's ability to mobilize and invest savings, as well as the targeted categories and numbers of customers.

4-8-1-3 The estimated budget and the bases and expectations relied upon in its preparation.

5-8-1-3 The bank's work plan and expansion plan in its activities, the number of branches planned to be established in the Arab Republic of Egypt, and the plan for disseminating digital banking services.

6-8-1-3 The proposed organizational structure of the bank.

7-8-1-3 Human resource development plan and ways to develop career paths, including training programs to increase security awareness among bank employees and customers to mitigate the risks of social engineering attacks.

8-8-1-3 The bank's policies, including at a minimum credit and investment policies.

9-8-1-3 A statement of the infrastructure and technical data of the electronic systems to be used - according to the products and services intended to be provided - including:

Core Banking Systems.
ATMs and their systems and their security plan.
Cloud Computing/Hosting systems, mentioning the data stored, if any.
An accredited certificate confirming the suitability, efficiency, effectiveness, and ability of the bank's electronic system to support the bank's activities.
The systems used for the services and products intended to be provided, as well as the plan for direct technical linkage with the systems.
A plan for monitoring and following up security incidents, clarifying the mechanisms and procedures to be followed, including securing personal and credit data of bank employees and customers, and the requirements necessary to secure the infrastructure of the systems.

10-8-1-3 Competence and clarity of internal control, risk management, and governance plans and work systems, as well as the plan for applying sustainable finance rules and the strategy and policy intended to be followed in conducting its affairs, including:

The cybersecurity strategy and the general policy for managing related risks.
A plan to activate security audit procedures on all systems, whether through internal management or an external company.
A business continuity plan necessary to ensure the continuity of providing various services at the bank.

9-1-3 In the case of banks taking the form of an Egyptian joint-stock company and affiliated with a foreign financial institution, the following must be submitted:
1-9-1-3 The services that the headquarters will provide to the foreign financial institution on its behalf, if any.

2-9-1-3 Applications and systems related to screening names against negative lists and combating money laundering and terrorist financing (local and global) (transfer applications, Know Your Customer applications, and applications for monitoring high-risk transactions related to customers).

10-1-3 Any other documents requested by the Central Bank.

2-3 For the branch of a foreign bank:

1-2-3 Approval from the headquarters of the foreign bank branch to establish a branch in the Arab Republic of Egypt.

2-2-3 Approval from the competent authority in the country to which the headquarters is subject to open the branch, with its confirmation that the bank (1) is licensed to operate, (2) maintains a sound financial position, (3) complies with the supervisory standards and controls applied by that authority.

3-2-3 Submission of documentation confirming that none of the founders, major shareholders, members of the Board of Directors, or ultimate beneficiaries are included in lists related to sanctions (local and international).

4-2-3 A financial and economic feasibility study for the next five years for the branch, as well as work plans and expansion in its activities and the number of branches planned to be established in the Arab Republic of Egypt.

5-2-3 A copy of the Articles of Association of the headquarters, certified by the competent authority under which it is subject, accompanied by an Arabic translation from an approved translation office.

5 6-2-3 A copy of the bank's financial statements for the last five financial years and the auditors' reports thereon.

7-2-3 The services that the headquarters will provide to the foreign financial institution on its behalf, if any.

8-2-3 A statement of the applications and systems related to screening names against negative lists and combating money laundering and terrorist financing (local and global) (transfer applications, Know Your Customer applications, and applications for monitoring high-risk transactions related to customers).

9-2-3 The commitments required from the headquarters of the foreign bank branch:
1-9-2-3 An unconditional guarantee from the headquarters of the foreign bank branch for all deposits at the branch and creditors' rights and all other obligations of the branch, with the commitment of the headquarters to compensate the branch for any losses that may be revealed by its financial statements for any financial year which may lead to non-compliance with the minimum regulatory requirements, especially those related to the capital adequacy standard, within one month at most from the date of approval by the branch's auditors of these statements.

2-9-2-3 The branch's commitment to Egyptian laws, regulations, decisions, and instructions issued by the Central Bank.

10-2-3 A power of attorney issued by the headquarters in the name of the responsible manager of the branch and his deputy, certified by the Egyptian Ministry of Foreign Affairs, and obtaining the approval of the Governor of the Central Bank for them before appointment.

11-2-3 Competence and clarity of the strategy and policy intended to be followed, as well as governance and internal control plans, and risks, as well as the plan for applying sustainable finance rules, in addition to work systems and procedures for all activities of the branch.

12-2-3 The proposed organizational structure for the branch of the foreign bank in the Arab Republic of Egypt and its plan for establishing branches, as well as the human resource development plan and ways to develop career paths.

13-2-3 Any other documents requested by the Central Bank.

1-4 Bank Licensing Procedures:

1-1-4 The applicant for the bank license, who has been granted initial consent, must submit the application to the Governor of the Central Bank. The necessary steps for establishment must be taken within one year from the date of notification to the concerned parties of the mentioned decision; otherwise, the consent is considered null and void. The Board of Directors of the Central Bank may extend this period for a similar period from the date of expiration of the initial consent for establishment.

2-1-4 The following documents necessary for licensing and registration in the Banks Register are attached to the licensing application:
1-2-1-4 A bank deposit certificate confirming the deposit of an amount of 5 billion pounds at least or its equivalent in free currencies for the bank's capital account.

2-2-1-4 A copy of the bank's tax card and commercial register.

3-2-1-4 A copy of the preliminary contract of the bank and its Articles of Association, and the page published with the establishment decision.

4-2-1-4 A statement of shareholders clarifying Related Parties, ensuring the identification of the Ultimate Beneficial Owner and verification of the legitimacy of the source of funds.

5-2-1-4 A statement of the names and data of senior executives (members of the Board of Directors and CEOs according to the forms prepared for this purpose, provided that they meet the competence and technical suitability conditions required for senior executives).

6-2-1-4 A certificate from the Ministry of Justice confirming that no bankruptcy or insolvency judgments, or any crime against honor, have been issued against any of the founders or candidates for membership on the Board of Directors and senior executives who hold Egyptian nationality.

7-2-1-4 The names of the bank's auditors, who must be among those registered in the Auditors Register at the Central Bank.

8-2-1-4 A statement of the equipment, facilities, and real estate necessary for its work, with compliance with what was stated in the instructions regarding security policies and procedures for securing the banking system issued in May 2018.

9-2-1-4 Proof of payment of an inspection fee for the bank amounting to five hundred thousand pounds for the headquarters, two hundred and fifty thousand pounds for each branch, and one hundred thousand pounds for each agency or small branch.

3-1-4 The bank licensing application is submitted to the Board of Directors of the Central Bank to issue a decision regarding it within sixty days from the date of submission of the application with the required documents. The Board of Directors may extend this period for a similar period.

4-1-4 The licensing applicant is committed to notifying the Central Bank of Egypt immediately in the event of any change in the data provided in the licensing application.

5-1-4 If the applicant fails to fulfill the requirements within ninety days from the date of the mentioned notification, his right to this application is forfeited.

6-1-4 The decisions issued by the Board of Directors of the Central Bank of Egypt regarding licensing are published in the Official Gazette at the expense of the licensed bank, in addition to the Central Bank's website.

7-1-4 In the event of rejection of the licensing application by a decision of the Board of Directors of the Central Bank, the applicant is notified thereof within thirty days from the date of its issuance.

2-4 Procedures for Licensing the Branch of a Foreign Bank:

1-2-4 The applicant for the license of the branch of a foreign bank, who has been granted initial consent, must submit the application to the Governor of the Central Bank. The necessary steps for establishment must be taken within six months from the date of notification to the concerned parties of the mentioned decision; otherwise, the consent is considered null and void. The Board of Directors of the Central Bank may extend this period for a similar period from the date of expiration of the initial consent for establishment.

2-2-4 The following documents necessary for licensing and registration in the Banks Register at the Central Bank are attached to the licensing application:
1-2-2-4 A bank deposit certificate confirming the transfer of an amount of no less than one hundred and fifty million US dollars or its equivalent in free currencies for the capital account of the branch of the foreign bank, allocated to conduct its activity in the Arab Republic of Egypt.

2-2-2-4 A copy of the tax card and commercial register.

3-2-2-4 A statement of shareholders for the foreign bank or foreign financial institution, clarifying Related Parties, ensuring the identification of the Ultimate Beneficial Owner and verification of the legitimacy of the source of funds.

4-2-2-4 A statement of the names of the responsible manager of the branch and his deputy and the senior executives responsible for activities according to the forms prepared for this purpose, provided that they meet the competence and technical suitability conditions required.

5-2-2-4 A certificate from the Ministry of Justice confirming that no bankruptcy or insolvency judgments, or any crime against honor, have been issued against any of the candidates for senior executive positions who hold Egyptian nationality.

6-2-2-4 The names of the auditors, who must be among those registered in the Auditors Register at the Central Bank.

7-2-2-4 A statement of the equipment, facilities, and real estate necessary, with compliance with what was stated in the instructions regarding security policies and procedures for securing the banking system issued in May 2018.

8-2-2-4 Proof of payment of an inspection fee amounting to twenty-five thousand US dollars for the headquarters, ten thousand US dollars for each additional branch, and five thousand US dollars for each agency or small branch.

3-2-4 The application for licensing is submitted to the Board of Directors of the Central Bank to issue a decision regarding it, according to the cooperation policy agreed upon between the Central Bank and the competent authority in the country where the headquarters of the foreign bank to which the branch belongs is located, for coordination between them in the field of supervision and oversight. The application is decided within sixty days from the date of submission of the application with the required documents mentioned above. The Board of Directors may extend this period for a similar period.

4-2-4 The licensing applicant is committed to notifying the Central Bank of Egypt immediately in the event of any change in the data provided in the licensing application.

5-2-4 If the applicant fails to fulfill what is required of him within ninety days from the date of the mentioned notification, his right to this application is forfeited.

6-2-4 The decisions issued by the Board of Directors of the Central Bank regarding licensing are published in the Official Gazette at the expense of the licensed bank, in addition to the Central Bank's website.

7-2-4 In the event of rejection of the licensing application by a decision of the Board of Directors of the Central Bank, the applicant is notified thereof within thirty days from the date of its issuance.

-5 Registration of the Bank or Branch of a Foreign Bank:

1-5 The licensed bank and its branches and agencies are registered in a special register prepared for this purpose at the Central Bank of Egypt.

2-5 The data registered in the mentioned register includes the following:
1-2-5 The registration number and the date of the Board of Directors' decision.

2-2-5 The full and abbreviated name of the bank or branch of the foreign bank in Arabic and foreign languages.

3-2-5 The legal form of the bank.

4-2-5 The date of establishment.

5-2-5 The date of commencement of activity.

6-2-5 The original and renewed duration of the foreign bank.

7-2-5 The number and date of the Official Gazette issue in which the decision of the Board of Directors of the Central Bank of Egypt approving the licensing was published.

8-2-5 The authorized and paid capital of the licensed bank or the capital allocated for the activity of the branch of the foreign bank in the Arab Republic of Egypt.

9-2-5 The legal reserve and other reserves of the foreign bank or any reserves allocated for the branch of the foreign bank in the Arab Republic of Egypt.

10-2-5 The bonds and financing certificates authorized to be issued by the bank and the branch of the foreign bank, their maturity dates, and supporting financing and its conditions.

11-2-5 The address of the headquarters of the bank or the main branch for the branch of the foreign bank in the Arab Republic of Egypt.

12-2-5 The network of branches of the bank in the Arab Republic of Egypt or the network of branches for the branch of the foreign bank in Egypt.

13-2-5 The network of branches of Egyptian banks abroad.

14-2-5 Financial institutions affiliated with Egyptian banks abroad.

15-2-5 Representation offices affiliated with Egyptian banks abroad.

9 16-2-5 A statement of the names and data of senior executives, according to the forms prepared for this purpose.

17-2-5 The names and data of the responsible manager for the management of the branch of the foreign bank in the Arab Republic of Egypt and his deputy, and senior executives, according to the form prepared for this purpose.

18-2-5 The names of the auditors.

3-5 Any modification to the previous data is registered on the form prepared for this purpose.

4-5 The approval of the Governor of the Central Bank of Egypt must be obtained before starting to establish each branch or agency and before opening and practicing the branch or agency's bank activities.

-6 Modification of Registration Data:

The procedures for modifying registration data are subject to the following:
1-6 Notification to the Central Bank of any modification intended to be made in the partnership contract or Articles of Association. The modification may not be submitted to the General Assembly - in cases requiring the Assembly's approval - except after obtaining initial consent from the Central Bank. The modification is not applied except after approval by the General Assembly and its approval by the Board of Directors of the Central Bank and its annotation in the Banks Register.

2-6 Notification must be made of any modification in the data submitted when requesting registration. The notification is submitted according to the "Request for Modification of Registration Data" form, supported by the necessary documents. The modification is not applied except by modifying the registration data of the bank with the approval of the Central Bank and its annotation in the Banks Register.

3-6 It is prohibited to announce any modifications included in the applications submitted to the Central Bank before notifying the concerned bank of documentation indicating the Central Bank's approval and its annotation in the Banks Register.

4-6 The Central Bank notifies the bank requesting the modification of the approval decision for the modification within fifteen days from the date of the decision issuance by any means approved by the Central Bank.