Central Bank Initiative to Support the Tourism Sector

Mr. Chairman /

Chairman of the Board Bank

Greetings and then,

In light of the pioneering role played by the Central Bank of Egypt and the banking sector in supporting the national economy and developing and stimulating various economic sectors, and given the importance of the tourism sector as a pillar of the economy, as it is a major contributor to national income and a primary source of foreign currency, and given the current circumstances and the crisis the sector is going through, the Central Bank of Egypt has deemed it necessary to establish a mechanism to contain this crisis and direct banks to deal with it at the present time.

Based on the foregoing, the Central Bank of Egypt has decided to issue an initiative to support the tourism sector, especially credit facilities granted to clients for the purpose of financing the following activities:

• Hotels and tourism projects (excluding those established for sale),
• Travel, booking, and tourism trip services and agencies,
• Land tourism transport,
• Restaurants, beverages, and entertainment activities in tourist areas, This includes regular and irregular clients, with the exception of certain client categories mentioned in the decision of the Board of Directors of the Central Bank of Egypt at its meeting held on January 3, 2012, including but not limited to: clients whose debts have become irrecoverable without discharge of liability, clients who have stopped paying, and clients involved in legal proceedings, unless the clients in any of the aforementioned cases agree with the creditor banks on a settlement or rescheduling.

We outline below the general framework for this initiative, represented by guiding determinants through which banks will study each case individually and make the appropriate decision as follows: 1.1 Granting a grace period of up to one year, during which all existing dues (for long-term and/or short-term facilities and/or overdrafts) will be deferred, in addition to capitalizing the return on facilities to the principal debt and not calculating late interest on deferred installments. In all cases, the following shall be observed: a. Regular facilities - as recorded in the banks' records on that date - shall not be considered irregular throughout the grace period. b. Banks are permitted to reclassify clients who were classified as irregular clients retroactively from January 1, 2013, and the resulting refund of marginal returns. c. Existing provisions shall not be affected, provided that each bank is free to form the necessary provisions and set aside returns for a period not exceeding 3 months during the grace period and take the necessary measures as deemed appropriate by the bank.

.2 The aforementioned grace period is considered an additional period to the remaining period allocated for the creditworthiness rating of category 7 (risks requiring special attention / List Watch) (9 months), in accordance with the basis for assessing creditworthiness and provisioning.

1.3 Rescheduling that occurs during the grace period will not be considered for inclusion in settlement clients.

In case of reduction 1.4 Reducing the interest rate without a minimum limit, and without including the client among settlement clients, and without being bound by the minimum pricing rate over the discount rate, for a maximum of two years from its date.

.5 In the event that the bank grants new credit facilities to irregular clients - whom the bank deems it beneficial to float - the provision for the new limit can be calculated at 5% during the grace period, while adhering to the basis for calculating impairment in accordance with the rules for preparing and presenting financial statements of banks and the principles of recognition and measurement.

.6 Coordination can be made between the lending banks for the same client in applying the initiative, provided that this is done under the supervision of

The bank with the largest debt. In the event that banks apply any of the foregoing, the following must be observed:

a. Study the situation of each client individually, taking into account the impact of the current crisis on the clients' ability to pay, the quality of the credit granted to them, and studying future cash flows to cover debt service. b. Conduct sensitivity analyses and develop alternative plans to confront potential scenarios and mitigate associated risks. c. The possibility of restructuring some facilities to extend the repayment period and alleviate client burdens 2.

Decision of the Board of Directors in its meeting held on January 3, 2012, regarding the amendment of the rules governing the registration system at the Bank 1 (Article One / First / Items 5 and 8)

The guiding determinants set forth in this decision shall apply from [Date] with full adherence to the decision of the Board of Directors of the Central Bank held on May 24, 2005, regarding the rules for assessing creditworthiness and provisioning, and the decision of the Board of Directors of the Central Bank of Egypt held on January 3, 2012 regarding the amendment of the rules governing the credit registration system at the Central Bank of Egypt, after the expiry of the grace period.

And please accept our highest regards Hisham Ramz Abdel Ghaffar

In a manner that does not conflict with the regulations for granting [Regulation Name] issued by [Issuing Authority] and the internal [Policy Name] policy. 2