Chapter One 1 Work Rules in the System Corridor Price Framework

The Board of Directors of the Central Bank of Egypt issued a decision in its meeting held on February 8, 2005, to establish the System Corridor Price Framework for transactions between banks, replacing the previous framework for the Monetary Committee of the Central Bank of Egypt. This framework consists of a System Corridor Price, which is the reference price for banks to borrow from the Central Bank of Egypt. The maximum limit of the System Corridor Price is the maximum borrowing rate, and its minimum limit is the minimum lending rate. The Monetary Committee of the Central Bank of Egypt may raise or lower these prices at any time, and the Central Bank of Egypt will publish them on its website immediately after the Monetary Committee meeting.

The following are the work rules under this system:

1. Banks must notify the Central Bank of the System Corridor Dealings (Reuters) for any transaction within the working day until 12:00 PM EGP.

2. Accepted Collateral in Transactions:

   • Collateral must be accepted for transactions in the upper phase, meaning the liquidity of the bank (in the absence of the bank's liquidity in the loan reoffering transaction before the reverse transaction for the loan return) is determined by the bank's liquidity.

   $\mathbb{N} \leq -\varepsilon$

   According to the following formula:

   Bank Liquidity =
   1 Bank Capital * ( ------------------------------------------- ) (The Interest Rate Approved by the Central Bank * The Remaining Period from the Acquisition Date) + 1 365 100

   1 Monetary Committee Decision No. (1) dated March 31, 2005 Loan Amount = Bank Liquidity * (100% - The Margin Approved by the Central Bank at 3%)

   • As of March 17, 2007, the addition of the ninth paragraph of the regulations for banks regarding the Central Bank of Egypt in the open market transactions to the conditions for using collateral for transactions in the upper phase, which are the conditions listed in paragraph (2) of Monetary Committee Decision No. (1) dated March 31, 2005.

3. The Bank's Ability to Provide Upper Phase Facilities:
   The bank is allowed to provide facilities in the upper phase up to the third hour of the working day, and in the fourth hour up to the borrowing rate.

4. Transaction Amount:
   The borrowing and lending transactions for the upper phase are provided with a minimum amount of one million pounds. These transactions are considered loan transactions for the upper phase if they comply with the return of the loan.

5. In case of non-acceptance of collateral for borrowing transactions:
   The transaction will be executed only after the bank notifies the Central Bank of its inability to provide the collateral within three working hours. If the bank fails to provide the collateral to the Central Bank within three working hours, the transaction is considered accepted. If the transaction is a loan for the upper phase, it will lead to an increase in the bank's balance to the excess balance, and the transaction will be executed immediately upon the bank's notification of its inability.

6. Interest Rate Calculation Basis:

   • The borrowing interest rate for the upper phase = The Amount Borrowed × The Annual Interest Rate for Borrowing for the Upper Phase × 1

   ---

   360

   The lending interest rate for the upper phase = The Amount Lent × The Annual Interest Rate for Lending for the Upper Phase × 1 ------------------------------------------- 360

7. Execution of Transactions:

   • For borrowing transactions, the Central Bank of Egypt deducts the amount of the borrowing transaction from the current account of the borrower on the day of the borrowing transaction, plus the interest amount to the current account on the day of the transaction, plus the current account amount. If the day of deduction is greater than the date of addition to the current account, the interest is calculated based on the number of days of the transaction.
   • For lending transactions, the Central Bank of Egypt adds the amount of the transaction to the current account of the borrower on the day of the transaction, plus the amount of the transaction multiplied by the interest rate on the day of the transaction. The Central Bank of Egypt deducts the interest amount from the current account on the day of the transaction. If the day of deduction is greater than the date of addition to the current account, the cost is calculated based on the number of days of the transaction.

8. The amount of the loan for the upper phase is subject to a maximum discount rate of the local currency.

9. The bank must submit the Egyptian Banking Standard Model to the center of the transaction, which includes a separate column for the loan for the upper phase in the return of the loan for the upper phase in the deduction column.

10. These rules are considered effective as of June 5, 2005, and the facilities for loan reoffering for the upper phase are considered effective from that date.