Industry Initiative Instructions

Dear Mr. / Chairman of the Board of Directors Bank

Greetings,

Continuing the Central Bank of Egypt's support for the national economy and the development and activation of various economic sectors, given the importance of the Industry sector as a pillar of the economy, contributing to the national income and providing employment opportunities, the Central Bank of Egypt has deemed it necessary to establish a mechanism for banks to deal with non-compliant clients in the industrial sector.

In light of the above, the Board of Directors of the Central Bank of Egypt issued a decision in its meeting held on June 2, 2015, outlining the general framework for this initiative, which consists of guiding determinants through which banks study each case individually and take the appropriate decision as follows:

1. The initiative is limited to non-compliant clients, with the exception of certain client categories listed exhaustively in the decision of the Board of Directors of the Central Bank of Egypt in its meeting held on January 3, 2012: clients whose debts were written off without a discharge of liability, and clients subject to judicial procedures, unless the clients in any of the previous cases agree with the creditor banks to conclude a settlement or installment plan.

2. In the event that a bank grants non-compliant clients - whom the bank sees merit in rescuing - new credit facilities, the provision formed for the new limit can be calculated at a rate of 5%, during the period of the initiative, while observing the basis of amortization calculation in accordance with the rules for preparing and presenting financial statements for banks and the principles of recognition and measurement.

3. Installment plans implemented starting from the date of issuance of the initiative and during its validity period are not considered within the framework of Classification 1 of Settlements.

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

4. Coordination may take place between lending banks for the same client in the application of the initiative, provided that this is done under the supervision of the bank holding the largest debt.

This, and in the event that banks apply any of the above, the following must be observed:

a- Studying the status of each client individually, taking into account the clients' ability to repay and studying future cash flows to cover debt service.

b- Conducting sensitivity (Sensitivity Analysis) tests and putting alternative plans to face potential scenarios and mitigate associated risks.

c- The possibility of restructuring existing facilities for the purpose of extending the repayment period and alleviating the burden on clients 2.

d- Submitting a quarterly report to the Central Bank of Egypt regarding clients who have been included in the initiative.

The guiding determinants mentioned above shall apply from the date of the decision of the Board of Directors of the Central Bank of Egypt in its meeting held on May 24, 2005, concerning the rules and bases for creditworthiness assessment and provision formation, and the decision of the Board of Directors of the Central Bank of Egypt in its meeting held on January 3, 2012, regarding the amendment of the rules governing the credit registration system at the Central Bank of Egypt, for a period of one year, with full compliance.

Please accept our highest respect.
Hesham Ramses Abdel Hafiz