Chapter One: Approvals for the Issuance of New Savings Systems

In light of the Board of Directors of the Central Bank of Egypt decision dated March 27, 2001, regarding the exclusion of balances of savings systems with a term of three years or more - based on the contract term - from the cash reserve ratio, for which approval was previously granted by the Central Bank of Egypt, the following must be observed:

1. The issuance of new savings systems by banks must be accompanied by obtaining approval from the Central Bank of Egypt on the terms of issuance, including the rules governing the repayment of customers' savings within these systems before the maturity date, and the minimum duration after which withdrawal from the system is permitted.

2. Banks must continue to provide the Supervision and Inspection Sector with all rules applicable to the currently implemented savings systems and the balances of each system on a quarterly basis.

Furthermore, to allow the continued exclusion of balances of existing savings systems with a term of three years or more - based on the contract term - held at banks from the cash reserve ratio, which were previously approved before the issuance of the aforementioned decision, the following controls must be observed for new issuances of these systems:

1. The minimum duration after which withdrawal from the system is permitted before the maturity date must not be less than six months.

The return rate on the certificate must be either:
A. Fixed throughout the duration of the certificate (with the possibility of defining periodic intervals for adjusting the fixed rate to apply to new issuances, not existing ones).

B. Variable, provided that the method of calculating the variable rate is clarified based on a margin linked to the Central Bank of Egypt's credit and discount rate or any of the prevailing treasury bill rates on the date of the start of the periodic return payment period (monthly - quarterly - semi-annually - annually).

1. For increasing-value savings systems (with cumulative returns) where returns exceed the nominal value of the certificate and are paid entirely at the end of the certificate's duration, the basis for calculating this return (whether simple or compound) must be specified.

2. The return must be recalculated for certificates redeemed before the maturity date based on the return rate applied to new issuances, inversely proportional to the elapsed duration of the certificate minus a margin determined in advance by the bank for the certificate's term.

3. The return rate on a loan secured by the certificate must be determined at no less than the return rate granted to the certificate on the date of borrowing, plus 2%.

4. The necessity of full disclosure when advertising new issuances, according to their main characteristics and terms, so that the customer public can identify them before subscribing to them.