Regulatory Alerts2022-04-28 | CBE4.1Added · Updated
CBE Regulation Book 4.1 - Controls Granting Credit Financing Activity Of Real Estate Development Companies
The Central Bank of Egypt establishes credit controls for banks financing real estate development companies constructing residential units for sale, requiring full segregation of project funds, mandatory feasibility studies, and specific leverage ratios for capital adequacy calculations. The regulation permits banks to discount commercial papers without recourse against developers under strict conditions, including a minimum 50% payment of the assessed value, a maximum six-year repayment term, and a 10% cash deposit for returned papers. Financing limits are capped at 1:3 leverage for non-recourse paper financing and 50 billion EGP for the entire sector, with specific reporting and risk assessment obligations for banks.
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