Circular Letter Dated June 25, 2026 Supplementing the Circular Regarding the Establishment of a Specialized Fraud Management Department in Banks

Cairo, June 25, 2026
To the Esteemed Member, Board of Directors / Bank

Greetings,

In supplement to the Circular Letter dated April 2, 2026 regarding the establishment of a specialized department for managing and combating fraud in banks, and in light of inquiries received from some banks regarding the scope of application of the aforementioned instructions—particularly concerning technical inspection works for internal and external fraud cases, and the extent of its relation to the competencies of other departments and entities within the bank, as well as legally mandated competencies of the Anti-Money Laundering and Counter-Terrorist Financing Unit—I wish to highlight the following:

1. The work of the specialized fraud management department in the bank shall focus on establishing the foundations, policies, mechanisms, and regulations necessary to monitor and follow up on banking operations of all types from a fraud management perspective.
2. Continuous coordination between the specialized fraud management department in the bank and various relevant departments within the bank, including the Compliance Department, without conflicting with the competencies of those departments.
3. The technical inspection works stipulated in the previously issued instructions by the Central Bank refer to works related to determining the nature of the fraud incident under inspection, the means of its commission, and deficiencies or loopholes associated with it, and its connection to internal or external fraud risks, without extending to the competencies of the concerned departments in the bank or related entities. This includes the Compliance Department, which is responsible for inspecting operations related to fraud and notifying the Unit thereof in suspected cases, whether linked to money laundering or primary crimes, or terrorist financing, or attempts to carry out these operations regardless of their value, where the Unit, exclusively by law, is responsible for receiving these cases.
4. The inspection process conducted by the bank's fraud management department shall not prevent any of the bank's departments from exercising their original competencies in accordance with the bank's internal policies and procedures, including handling suspected cases of money laundering crimes or primary money laundering crimes (including fraud crimes) or terrorist financing crimes.
5. The necessity of defining roles, separating authorities, and creating a general framework ensuring continuous coordination, and providing mechanisms to ensure that the specialized fraud management department notifies the Compliance Department, which in turn inspects and notifies the Unit regarding these cases.
6. The current scope of competencies of the Central Fraud Management Department shall consist of preventing fraud crimes through conducting research, studies, and reviewing international best practices, assessing related risks, and raising awareness among supervised entities regarding financial fraud and methods to mitigate it.
7. Pursuant to Law No. 80 of 2002 and its amendments, executive regulations, and relevant supervisory instructions, the Anti-Money Laundering and Counter-Terrorist Financing Unit, exclusively by law, is responsible for receiving, analyzing, and directing reports regarding any operations suspected to constitute proceeds of primary crimes (including fraud and embezzlement) or involving money laundering or terrorist financing, or attempts to carry out these operations regardless of their value.
8. The Central Fraud Management Department at the Central Bank of Egypt receives from fraud management departments in banks operating in Egypt—according to the competencies of those departments outlined above—everything that assists the Central Department in combating fraud to perform its aforementioned competencies.
9. The position of Fraud Management Officer may not be combined with any other function.

Kindly be informed of the full compliance with the above.
Yours sincerely,
Tarek El-Kholi