Regulatory Alerts2021-11-15
Added · Updated
Licensing and Supervision of Banking Business Directive for Foreign Currency Intermediation by Bank No. SBB/82/2021 (1st Replacement)
This Directive repeals Directive No. SBB/77/2020 and establishes the terms for banks operating in Ethiopia to engage in foreign currency intermediation by borrowing externally and lending to foreign currency generating activities. Banks must secure external loans with a minimum six-month grace period and two-year repayment term, denominated in specific currencies, and maintain a 5% reserve and 15% liquidity ratio against foreign currency liabilities. The regulation imposes a 10% penalty on loans violating structural requirements and a 20% penalty on funds not utilized for approved purposes, while mandating weekly and monthly reporting of reserves, liquidity, and loan portfolios to the National Bank of Ethiopia effective December 1, 2021.