Chapter Two: Rules Governing the Credit Registration System (1) at the Central Bank of Egypt

The Central Credit Registration System contains detailed information and aggregates for debtors from banks, financial leasing partners, and consumer finance partners whose debts exceed the threshold approved by a resolution of the Board of Directors of the Central Bank of Egypt of EGP 30,000 or more. The system also contains negative lists for customers who have been subject to negative decisions regarding their accounts below this threshold. The Central Credit Registration System has been linked with the Central Bank's Core Banking System and the Line On communication system.

In light of the provisions of Law No. 88 of 2003 concerning the Central Bank of Egypt and the Banking Sector, its executive regulations, and the subsequent obligation for financial leasing and consumer finance partners to provide credit account data to the Central Bank, along with the need to update procedures, enhance transparency, and facilitate the work of banks, financial leasing partners, and consumer finance partners, all current and previous resolutions issued by the Board of Directors of the Central Bank of Egypt and periodic circulars issued by the Department of Collecting Commercial Credit Data since the establishment of the department until today, as well as reviews and amendments, have been compiled to simplify matters for banks, financial leasing partners, and consumer finance partners.

Articles 65, 66, and 67 of Law No. 88 of 2003 concerning the Central Bank of Egypt and the Banking Sector provided the legal basis for the Central Credit Registration System for bank customers, financial leasing partners, and consumer finance partners. Articles 30, 32, and 33 of the Executive Regulations of the Law specified the content and procedures for collecting credit data and statistics.

Footnotes:

1. Collection of Laws and Directives dated May 19, 2005; Resolution of the Board of Directors of the Central Bank of Egypt dated April 26, 2005; and subsequent periodic circulars.
2. Collection of Laws and Directives dated January 20, 2009.
3. Collection of Laws and Directives dated February 22, 2006. Regarding Minister of Interior Decision No. 1723 of 2008, the validity period of the National ID is six years and must be renewed within three months from the expiration date calculated from the issue date. This applies to IDs issued between 1997-2001, where renewal must occur within three months of the following year's issue date without regard to the issue year. Example: An ID issued in March 1998 must be renewed by October, November, December 2009, and remains valid until December 2009.
4. Collection of Laws and Directives dated May 20, 2009.
5. Letter from Senior Advisor to the Governor dated February 11, 2007.

The Board of Directors of the Central Bank of Egypt issued a resolution during its meeting held on April 26, 2005, organizing the rules for the Egyptian Central Bank's Credit Registration System and the attached forms.

First: Required Documents and Declarations from Customers When Applying for Financing or Credit Facilities

Article 62 of Law No. 88 of 2003 concerning the Central Bank of Egypt and the Banking Sector stipulates that anyone seeking financing or credit facilities from banks, whether individuals or legal entities, must declare the status of the establishment, ownership, or shareholding in joint-stock companies and the degree of relationship, if any, and the balances of debts owed to other banks. Providing these documents and declarations is mandatory, and consideration may be given to them only if their authenticity is verified.

Banks, financial leasing partners, and consumer finance partners must require customers applying for financing or credit facilities to provide the following documents and declarations:

1. A signed declaration from the applicant of the bank, financial leasing partner, or consumer finance partner detailing the nature and volume of their dealings with each other, clarifying the names of those they deal with and the volume of dealings with each. The bank must ensure that the purpose of this declaration is not to evade or conceal credit data and the consequences thereof, including disqualification from obtaining the requested facility.

2. A declaration from the applicant specifying the related parties.

3. Identity proof documents for the customer and related parties, guarantors, and joint partners, as follows: a) A copy of any official identity document, preferably the National ID number. For Egyptians, an identity certificate issued within two months and thirty days prior to the issuance date (for individuals); for foreigners, a passport and residence permit; and for non-resident customers eligible for financing or credit facilities, a declaration mentioned below and confirmed by declarations dated February 2006. Note: Regarding the validity of the National ID for non-resident individuals belonging to banks and determining data and the Central Bank of Egypt's credit registration system, and customer data for banks and participating partners for acceptance and credit classification approved by the Board of Directors of the Central Bank of Egypt on January 17, 2006: To make available to banks the data found in the credit registration system for non-resident individuals exceeding credit limits up to EGP 1 million, an agreement was reached with the Ministry of Interior to use the National ID numbers of these customers as a secure encrypted medium transmitted to the Central Bank of Egypt for verifying customer identities without credit balances, such as internal reference number/name/address/National ID/passport number/date of birth... at a cost of 50 piasters per query. This service provides National ID data for each query to the credit registration system at the Egyptian Central Bank for customers with active accounts. b) A recent extract from the Commercial Register for centers of companies, with the extraction date matching or preceding the application date for financing, increase, or renewal. c) A copy of the Official Gazette announcing the establishment decision and the statute for all partners and amendments thereto, or government decree and public entity charter. d) A recent extract from the Commercial Register for foreign branches, with the extraction date matching or preceding the application date for financing or credit facilities, or a license to practice profession for foreign partners. e) A copy of the Official Gazette announcing the establishment of associations, foundations, and establishments.

Footnote 4: Collection of Laws and Directives dated May 20, 2009. Footnote 5: Letter from Senior Advisor to the Governor dated February 11, 2007.

Second: Accessing Aggregated Customer Data and Related Parties Before Granting Financing or Credit Facilities

Paragraph Two of Article 67 of Law No. 88 of 2003 concerning the Central Bank of Egypt and the Banking Sector stipulates that every bank must consult the aggregated data for any person or entity it intends to finance, based on a request from this data, as stipulated in Paragraph Four of Article 33 of the Executive Regulations of the Law. The Central Bank must provide aggregated data for every person or entity requesting financing and their related parties. Banks are obligated to consult this data before granting credit, increasing, renewing, or modifying terms, and before accepting deposits.

Banks, financial leasing partners, and consumer finance partners must consult the aggregated data for the customer and related parties as follows:

1. Consultation must be conducted through the Central Bank's Credit Data System.
2. Consultation must be performed by authorized employees named by the Central Bank with their job titles.
3. Consultation must be done by the employee handling the customer's financing request. Banks must obtain approval before granting credit, increasing, renewing, or modifying terms.
4. Consultation must be based on the original identity documents of the customer.
5. Every bank must consult the aggregated data for the customer, related parties, joint partners, and guarantors before granting financing, increasing, renewing, or modifying terms, regardless of whether the guarantee was provided on the financing date or any subsequent date. Banks must also consult aggregated data for customers receiving credit facilities below the declaration threshold.
6. Financial leasing partners and consumer finance partners must consult aggregated data for customers and related parties.
7. The aggregated data consulted before approving credit facilities must be the latest data available in the Central Bank's Credit Data Center.
8. It is mandatory to consult the data for declaring the granting, increasing, renewing, or modifying terms of credit in the current year, retaining the obtained data for future reference and according to internal controls.
9. Banks must consult aggregated data for customers' obligations and limits entered into them.
10. Banks must refer to the Department of Collecting Commercial Credit Data for inquiries regarding customer consultation or inability to obtain aggregated data using Form "Request for Inquiry About a Customer for Financing or Credit Facilities No. (1) of 6" attached, along with the customer's identity proof documents.
11. Consultation of credit data for non-resident individuals must be done without a maximum limit by participating partners for credit acceptance, without resorting to the Central Credit Registration System.
12. Banks, consumer finance partners, and financial leasing partners must obtain credit data for Medium and Small Enterprises where the granted credit does not exceed EGP 1 million from any of these banks and partners participating in credit acceptance and the Central Bank's Credit Registration System.

Third: Entering New Customer Data into the Central System

Paragraph (a) of Article 33 of the Executive Regulations of Law No. 88 of 2003 concerning the Central Bank of Egypt and the Banking Sector stipulates that banks, financial leasing partners, and consumer finance partners must enter data into the system electronically for every person or entity, as determined by the Central Bank's authorized employees with their job titles.

Entering new customer data into the system involves:

1. Banks, financial leasing partners, and consumer finance partners must enter new customer data, guarantors, and joint partners from the Central Bank's Credit Data System or on the first day the financing or credit facility was granted, to obtain customer codes immediately after registering all data.
2. Entry and approval of new customer data must be done by one or more authorized employees named by the Central Bank with their job titles.
3. Entry of new customer, guarantor, and joint partner names and personal data must be based on recent identity proof documents confirming the accuracy of this data.
4. Banks, financial leasing partners, and consumer finance partners are fully responsible for the accuracy of entered customer data and must establish necessary systems for review and approval.
5. Banks, financial leasing partners, and consumer finance partners must notify the Department of Collecting Commercial Credit Data simultaneously with entering new customer data, providing: a) For new customer/guarantor/joint partner (individual or legal entity): Form "New Customer/Guarantor/Joint Partner Data Card (Nature of Activity/Consideration) No. 2 of 6" containing:
   • Date: Day/Month/Year.
   • Bank/Partner Data: Name/Branch/Governor.
   • Customer Data: Individual: Name/Date of Birth/Address/Nationality. ID Number/Type/Issue Date: National ID for Egyptians, Passport/Residence Permit for Foreigners, Residence Permit for Non-Residents. Legal Entity: Name/Address/Legal Form/Activity. Commercial Register Number/Issue Date/Official Gazette or Official Document Number. International Standard Industrial Classification (ISIC) per letter from Deputy Governor dated April 14, 2008.
   • Date of commencement of business with the bank.
   • Names of Guarantors and Signature Dates.
   • Names of Joint Partners. b) Copies of identity proof documents confirming customer, guarantor, and joint partner data. The Department of Collecting Commercial Credit Data will verify the accuracy of data entered by banks and partners and confirm the acquisition of customer codes from the Central Bank's Credit Data System.

Footnote 6: Collection of Laws and Directives dated February 22, 2006.

6. Banks, financial leasing partners, and consumer finance partners must continuously maintain all customer, guarantor, and joint partner data, updating it based on supporting documents, and committing to notify the Department of Collecting Commercial Credit Data within five days of changes such as:
   • Change of customer name, address, or activity/legal form.
   • Withdrawal of a joint partner.
   • Expiration of guarantees.
   • Merger.
   • Death of the customer.
7. Banks, financial leasing partners, and consumer finance partners must inform the Department of Collecting Commercial Credit Data upon opening a new branch to obtain the branch code from the Central Bank's Credit Data System.

Fourth: Disclosure of Related Parties of Customers Applying for Financing or Credit Facilities

Banks must obtain a declaration from the customer specifying related parties, defined in Law No. 88 of 2003 concerning the Central Bank of Egypt and the Banking Sector, and the Board of Directors' resolution dated April 26, 2005. Timeframes were expanded for banks to disclose related parties for customers receiving credit facilities, including:

1. A declaration for financing or credit facilities from individuals or legal entities stating the status of the establishment, ownership, or shareholding in joint-stock companies, degrees of relationship, and balances owed to other banks. This declaration is mandatory when granting credit, and its accuracy may be verified. The declaration specifies related parties and must be updated upon renewal, increase, or modification of limits.

2. Each bank must establish a banking inquiry system and a unified model covering all available customer credit data and related parties, assigned to banking inquiry officers. The inquiry model must be completed annually upon granting, renewing, or increasing limits for a customer, accompanied by the attached declaration.

3. Banks must consult aggregated credit data for customers and related parties before granting financing or credit facilities. Banks may request this data. Consultation must be conducted through the Central Bank of Egypt's Credit Data System by authorized employees named by the Central Bank, using original identity documents for the customer. Consultation uses a standardized format containing:

   • Codes of banks where related parties were registered.
   • Balance of each related party at each bank.
   • Location of each related party's transactions involving liabilities.
   • Location of each transaction with banks disclosing balances. This consultation completes data held by each bank based on customer declarations and banking inquiry data, including financial statements and explanations of related parties, cross-referenced with the Central Bank's Credit Data System, and supported by relevant documents.

4. Enter customer and related party data electronically into the Central Bank of Egypt's Credit Data System by authorized employees named by the Central Bank, with notification to the Department of Collecting Commercial Credit Data of customer and related party data from the earliest signed declaration completing data in Form "Declaration of Related Parties of Customers Receiving Financing or Credit Facilities End of Period... No. 3 of 6", supported by documents including:

   • For Individuals: Copy of National ID for Egyptians, Passport for Foreigners.
   • For Legal Entities: Recent Commercial Register extract for partners, Shareholder Registry and Minutes for Joint Stock Companies. The Managing Director of the bank is responsible for notifying the aforementioned Department of customer and related party data in the form supported by documents, and each bank designates an officer responsible for entering data for granted shares.

5. Annually, upon granting, renewing, or increasing limits for customers, provide credit data to the Central Bank of Egypt for customers and related parties.

Related parties include those controlling the customer's affairs, including non-resident individuals, partners, and guarantors. The definition of control in Article 51 of Law No. 88 of 2003 includes ownership of shares enabling board representation or control over board decisions or management of public entities. Control extends to relatives up to the second degree. For legal entities, control includes representation on the board or shareholding, whether individual or legal, or joint control leading to control of public entities or boards.

Banks, financial leasing partners, and consumer finance partners must electronically enter data for every person or entity and related parties in the Central Bank of Egypt's Credit Registration System.

To improve system efficiency for the current year, guarantors and sureties not previously registered with the customer were made available to banks since the initiation of guarantor registration, under the screen "Related Parties Registered Under Bank Name Without Customers," requiring banks to:

• Confirm this registration and complete guarantor details and approve the registration.
• Ensure officers register all related parties and balance data for customers, including new customers, upon determination and approval, and report changes in related parties.
• Continue notifying the Department of Collecting Commercial Credit Data with Forms Nos. (2-6), (6-3) included in the aforementioned provisions, indicating whether related parties existed at the declaration date.
• The Managing Director of the bank is responsible for notifying the mentioned Department of customer and related party data in Form (6-3) supported by documents, and each bank designates an officer responsible for entering data for granted shares.

Footnote 7: Collection of Laws and Directives dated April 6, 2010. Footnote 8: Collection of Laws and Directives dated April 6, 2010.

Fifth: Rules and Procedures for Sending Data (Monthly Declaration) on Centers of Customers Receiving Financing or Credit Facilities

Paragraph Four of Article 65 of Law No. 88 of 2003 concerning the Central Bank of Egypt and the Banking Sector stipulates that every bank must send data to the Central Bank on centers of every person receiving financing or credit facilities. Paragraph (b) of Article 33 of the Executive Regulations of the Law obliges banks, financial leasing partners, and consumer finance partners to send data from the Central Bank's Credit Data System at intervals specified by the Central Bank Governor's resolution.

Footnote 9: Collection of Laws and Directives dated November 14, 2006. Footnote 10: Letter from Governor of the Central Bank of Egypt dated February 22, 2006.

Data (declarations) from centers of customers receiving financing or credit facilities from the Central Bank's Credit Data System are sent as follows:

1. Data must be sent monthly on the granting of financing or credit facilities or the month in which data was prepared, no later than the second day of the following month after the approval date for granting financing or credit facilities or the month data was prepared periodically.
2. Declaration must be made for every person receiving financing or credit facilities exceeding EGP 30,000, whether individual or legal entity. In case of bank failure to comply with the above timelines, a financial penalty will be imposed on banks delaying submission of declarations as follows:
   • Deposit of one million pounds without interest to the Central Bank of Egypt in case of delay in submitting monthly declarations beyond the period specified by the Board of Directors of the Central Bank of Egypt in its resolution dated April 26, 2005, i.e., the second day of the following month after approval for granting financing or credit facilities or the month data was prepared periodically.
   • In case of repeated delay by the bank in submitting monthly declarations for the next year, deposit of two million pounds without interest for that period. This resolution takes effect from November 2006 for foreign customers.
3. Declaration must be made for every Egyptian customer, and any foreigner with a residence permit in Egypt, as well as non-residents.
4. Declaration must be made for the individual customer and each of their sole establishments separately.
5. Declaration must be made for every joint partner or guarantor or co-borrower in cases of joint borrowing, and commitments of each must be recorded within the limits of credit facilities authorized for the customer.
6. If a joint partner or guarantor has more than one guarantee/collateral for a single branch, a separate declaration must be made for each joint partner or guarantor, even if guarantees or collaterals change for that branch.
7. Declaration must be made for customers of each branch separately.
8. In case a customer has a credit balance below the declaration threshold with more than one branch of the same bank, and the total credit reaches the declaration threshold, declaration must be made.
9. In case of joint borrowing with multiple banks, declaration must be made proportionally for the financing or credit facilities granted to the customer.
10. Declaration must continue for partners undergoing liquidation, adding the phrase "under liquidation" after the partner's name.
11. In case of customer death, declaration must continue, adding the word "deceased" after the customer's name.
12. In case of granting financing or credit facilities to government units, local authorities, or public entities other than issuing or purchasing bonds/shares of any of them, declaration must be made for the unit marked as "Public Entity."
13. Declaration must be based on the outstanding balance of each month for every person receiving financing or credit facilities.
14. Declaration must be made for debtor balances exceeding the declaration threshold in the month they appeared in these balances.
15. The basis for declaration is the authorized amount, disregarding the utilized amount, so declaration continues even if the customer's limit falls below the declaration threshold until full repayment of debt.
16. Declaration amounts must be in Egyptian Pounds, rounded to the nearest pound.
17. Banks, financial leasing partners, and consumer finance partners must send data (declarations) monthly to the Central Bank's Credit Data System via Form "Monthly Declarations on Financing Balances and Credit Facilities End of Period... No. 4 of 6" containing: a) Bank/Partner Name and Number - Branch Name and Number - Governor Name and Number. b) Month and Year to which data relates. c) Customer Name and Code - Address - Nationality / Activity
    • Legal Form. d) Limits of authorized financing and credit facilities granted to the customer and utilized amounts for each financing and credit facility type and guarantee types shown in the table below. Monthly Distribution:
    18. The following are exempt from declaration: a) Credit facilities granted to banks. b) Guarantors whose guarantees are cash deposits, treasury bills/bonds, government securities held as collateral, or government guarantees with values equal to their guarantees.
    19. Complete declaration data must be collected, and banks, financial leasing partners, and consumer finance partners are fully responsible for sent data.
    20. Banks, financial leasing partners, and consumer finance partners must...

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