Circular dated August 6, 2020 regarding allowing banks to own shares in companies providing payment services and payment operators without a maximum limit

Cairo on: 6 August 2020

Mr. Chairman of the Board of Directors

Greetings,

With reference to the circular letter issued on August 24, 2004, on the instructions of the Central Bank of Egypt's Board of Directors meeting held on July 27, 2004, which prohibited banks from owning shares in non-financial companies exceeding 40% of the issued capital, and allowing banks to own shares in financial companies without a maximum limit, while exempting financial companies from the provisions of this circular.

In light of the current developments in the financial market, which resulted from the emergence of companies operating in the field of providing financial services, such as payment service companies and payment operators, which are considered in the same category as financial companies, the Board of Directors of the Central Bank of Egypt, in its meeting held on July 28, 2020, has decided the following:

"Allowing banks to own shares in payment service companies and payment operators without a maximum limit, provided that they are considered as financial companies mentioned in item (3) of the instructions issued pursuant to the decision of the Board of Directors of the Central Bank of Egypt in its meeting held on July 27, 2004."

Furthermore, we wish to emphasize what was stated in the circular letter issued on May 13, 2014, that in the event of a bank's participation in any financial or non-financial company with a percentage exceeding 5% of the issued capital, prior approval from the Central Bank of Egypt is required before taking the actual action to participate with an amount not less than one-fifth of the approved share in the proposed company.

Please accept our highest regards,

Tarek Amer