Circular dated December 7, 2015 regarding the initiative to deal with retail loans for workers in the tourism sector

Cairo: December 7, 2015

Dear Mr. Chairman of the Board of Directors,

Greetings,

In light of the Central Bank of Egypt's role in supporting the national economy and activating various economic sectors, and given the conditions the Egyptian economy is undergoing and the impact on many sectors, foremost among which is the tourism sector, considering that this sector represents a pillar of the economy and a source of foreign currency, the Central Bank of Egypt had previously issued an initiative to support the tourism sector through its letter dated March 13, 2013.

In light of the continued impact on the tourism sector, which negatively reflected on the emergence of some arrears among regular customers granted loans for consumer purposes, the Central Bank of Egypt deemed it necessary to consider postponing these maturities, considering that the delay in payment during this period resulted from extraordinary circumstances beyond the customers' will, which does not necessitate forming provisions as stipulated in the principles of evaluating customer creditworthiness and forming provisions issued by the Board of Directors' resolution of the Central Bank in its meeting held on May 24, 2005.

Accordingly, the Central Bank of Egypt's initiative to support workers in the tourism sector was issued through the resolution of its Board of Directors in its meeting held on December 3, 2015, containing the following:

The general framework of the initiative consists of guiding determinants through which banks study each case individually and make the appropriate decision regarding it as follows:

1. Allowing banks the possibility of deferring maturities of loans for consumer purposes and mortgage loans for regular workers in the tourism sector only, to the Personal Housing Center for a period of 6 months from the date of maturity starting from October 1, 2015, without calculating late fees for that period.

2. That this deferral does not result in considering these facilities as irregular, considering that the non-payment during this period resulted from extraordinary events that affected customers' ability to pay, with banks observing the aforementioned when notifying the Egyptian Credit Bureau (score-I) and upon implementing the credit registration system at the Central Bank of Egypt.

3. Commitment by banks to update their Know Your Customer (KYC) data and verify the accuracy of data provided by customers regarding their current employment, which must be within the following tourism activities:

• Accommodation hotels and tourism projects,
• Travel agencies, booking, and tour services,
• Land tourist transport,
• Restaurants, beverages, and recreational activities in tourist areas,
• Air passenger transport activity.

Banks wishing to benefit from the initiative must notify the Central Bank of Egypt in advance.

Please accept our highest respect.

Gamal Nagm

According to the principles of forming customer creditworthiness and forming provisions issued by the resolution of the Board of Directors of the Central Bank of Egypt in its meeting held on May 24, 2005.

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