Circular dated January 6, 2021 regarding local transfers in the Egyptian pound

Cairo on: January 6, 2021 Dear Sir/Chairman of the Board, Greetings,

With reference to the circular letter dated June 21, 2020, which included the necessity of supporting infrastructure and transfer departments in banks to enable the execution of customer transfer requests on the same day, thereby gaining their trust and encouraging them to reduce the use of circulating cash, and in light of the efforts made to enhance financial inclusion, particularly regarding the development of payment systems to strengthen the necessary infrastructure to raise the efficiency of banking transactions and make them available at appropriate prices,

Among them is the execution of financial transactions through bank transfers, which aims to be executed in the shortest possible time as they represent the best and easiest alternative to cash transactions.

Furthermore, in support of the above, the Board of Directors of the Central Bank of Egypt, in its meeting held on December 27, 2020, decided the following:

"First: Banks must comply with the following when providing the Egyptian pound transfer service to their customers:

1. Regarding bank customers' requests to transfer to accounts of the same bank party, submitted through branches or one of the electronic channels, those requests are executed within a maximum of two hours from the time of the customer's request, and on the same working day as the customer's request date or according to the customer's right.

2. Regarding transfer requests to accounts of another bank party, submitted through branches or one of the electronic channels, they are executed as follows: a. Regarding the transfer order sending bank:

• Customer requests submitted during branch working hours or through electronic channels around the clock are received.

• The transfer order is sent to the beneficiary bank on the same working day and within a maximum of two hours from the time of receiving the customer's request.

• For customer requests received by banks after 2:00 PM, the bank must send the transfer order to the beneficiary bank as soon as possible and within a maximum of two hours from the start of the next working day.

b. Regarding the beneficiary bank: The addition to the beneficiary's account must be on the same working day as the transfer request date or according to the customer's right, and within a maximum of one hour from the time the bank receives the transfer order.

The compliance with the above-mentioned timeframes is exempted for any operations requiring credit approvals, or any operations suspected by the Central Bank of Egypt's banking regulatory controls regarding combating money laundering and terrorist financing, as issued in 2008 and its amendments, as well as any other risks deemed by the bank.

In this regard, it was decided to increase the number of daily settlement sessions (Same Day Settlement windows) for the Central Bank of Egypt Automated House Clearing system from two sessions to four sessions during the day starting February 1, 2021.

3. Cancellation of the fees collected by the beneficiary bank for incoming transfers.

4. Sending a monthly report to the Office Supervision Sector of the Central Bank of Egypt according to the forms that will be provided to banks later in this regard.

5. Activating direct linkage with the systems (Straight-Through Processing - STP) in outgoing and incoming transfers.

6. Regarding the above items, banks are granted a period to align their status lasting three months for item number 2 and six months for item number 5.

Second: When applying the above, the following shall be observed:

1. Activating reliance on the International Bank Account Number (IBAN) with a view to obligating banks to use it in executing all transfers in a later stage, as follows:

• The necessity of completing the notification of customers with their International Bank Account Numbers as soon as possible.

• The responsibility of the sending bank for the transfer is to verify the validity of the IBAN number before executing any transactions.

• The receiving bank for the transfer must verify the correctness of the beneficiary's data.

2. Disclosing fees and charges related to the transfer service through all possible means (for example: in customer reception halls at bank headquarters or branches, or on its website, or in various media, or in private correspondence and bulletins sent to customers) in accordance with what was mentioned in Article No. 88 of Law No. 194 of 2020 issuing the Central Bank and Banking System Law and the instructions regarding bank customers' rights. In this regard, customers are kindly requested to be informed of those expenses and fees as a cash value, for transfers made through branches or electronic channels.

3. The cost of the banking tariff collected from customers when using electronic payment means must be lower than that prescribed for paper transfers provided through branches.

4. The cost of transfers executed using the Automated Clearing House (ACH) system (as a local network) must be lower than those executed using global networks.

5. Considering that the Central Bank of Egypt Automated House Clearing system is used when executing Egyptian pound transfers, provided that customers are provided with confirmation of the transfer execution through any of the means available to the bank.

Please be kind enough to alert to the full compliance with the above.

And please accept our highest respect and appreciation,

The Governor