Chapter Four: Prohibition of the Bank Accepting Its Capital Shares as Collateral or Dealing in Them

And the controls for liquidating movable or immovable property whose ownership devolves to the bank in satisfaction of a debt owed to it.

First: Prohibition of the Bank Accepting Its Capital Shares as Collateral or Dealing in Them 1

It is incumbent upon the bank, in accordance with the provisions of Law No. 88 of 2003 regarding the Central Bank and the banking system, and the instructions issued by the Monetary Control Committee, not to accept its own shares as collateral for any debt, nor to deal in them in any way. This is also in accordance with the provisions of Law No. 159 of 1981 concerning joint-stock companies, partnerships limited by shares, limited liability companies, and single-person companies. The bank shall not purchase its own shares, nor shall it accept them as a pledge or collateral for any debt owed to it, nor shall it deal in them in any way.

Second: Controls for Liquidating Movable or Immovable Property Whose Ownership Devolves to the Bank in Satisfaction of a Debt Owed to It by a Third Party

It is incumbent upon the bank, in accordance with the provisions of Law No. 88 of 2003 regarding the Central Bank and the banking system, and the instructions issued by the Monetary Control Committee, to liquidate any movable or immovable property whose ownership devolves to the bank in satisfaction of a debt owed to it by a third party, in accordance with the following controls:

-1 The bank shall dispose of the movable or immovable property that has devolved to it within a period not exceeding one year from the date of its acquisition.

-2 If the bank is unable to dispose of the movable or immovable property within the aforementioned period, it must obtain the approval of the Central Bank of Egypt to extend this period for a similar period, provided that the bank provides sufficient justification for this extension. The bank may also sell the property at a price not less than its appraised value, in accordance with the provisions of Article (1) of this regulation.

Law No. 16 of 2008 regarding the Central Bank and the banking system, and the instructions issued by the Monetary Control Committee, stipulated that the bank may, in cases of necessity, extend the period for disposing of the acquired property for a period not exceeding 10% of the year, and this extension must be approved by the Central Bank. In 2010, the Monetary Control Committee issued instructions that allowed the Central Bank to grant the bank an extension for a period not exceeding one year, provided that the bank provides sufficient justification for this extension, and that the property is sold at a price not less than its appraised value. The bank must also provide the Central Bank with a report on the measures taken to dispose of the property, and the reasons for the delay in its disposal.

-1 The bank shall dispose of the movable or immovable property at a price not less than its appraised value, in accordance with the provisions of the laws and regulations in force.

-2 The bank shall dispose of the movable or immovable property at a price not less than its appraised value, in accordance with the provisions of the laws and regulations in force, and in accordance with the instructions issued by the Central Bank of Egypt. The bank shall also provide the Central Bank with a report on the measures taken to dispose of the property, and the reasons for the delay in its disposal.

The bank shall be subject to penalties in case of non-compliance with the provisions of this regulation. The penalties shall be determined by the Central Bank of Egypt, and may include fines, suspension of banking activities, or revocation of the banking license.

The Central Bank of Egypt may issue any necessary instructions or clarifications to implement the provisions of this regulation.

1. Decision of the Board of Directors of the Central Bank of the Governor, dated 6/1/2008, regarding the controls for liquidating movable or immovable property whose ownership devolves to the bank in satisfaction of a debt owed to it.
2. Decision of the Board of Directors of the Central Bank, dated 24/1/2012, regarding the controls for liquidating movable or immovable property whose ownership devolves to the bank in satisfaction of a debt owed to it.
3. Decision of the Board of Directors of the Central Bank, dated 22/1/2010, regarding the controls for liquidating movable or immovable property whose ownership devolves to the bank in satisfaction of a debt owed to it.
4. Decision of the Board of Directors of the Central Bank, dated 6/1/2008, regarding the controls for liquidating movable or immovable property whose ownership devolves to the bank in satisfaction of a debt owed to it.