Regulatory Alerts2021-08-31
Added · Updated
Investment on DBE Bonds Directive No. SBB/81/2021
The National Bank of Ethiopia requires all commercial banks operating in Ethiopia to invest a minimum of 1% of their outstanding loans and advances in Development Bank of Ethiopia (DBE) Bonds annually until the cumulative holding reaches 10% of total outstanding loans and advances. The directive establishes that DBE bonds carry a three-year maturity and an interest rate at least two percentage points higher than the minimum saving deposit rate, with annual interest payments guaranteed by the Federal Government of Ethiopia. Commercial banks must submit investment reports to the National Bank within three days of investment, while the Development Bank of Ethiopia must submit interest reports by July 3 each year. Failure to report by the deadline or submitting fraudulent figures subjects the entities to penalties under Proclamation No. 591/2008, and the directive entered into force on September 1, 2021.