Regulatory Alerts2017-09-15
Added · Updated
Limitations on Investment of Banks (2nd Replacement) Directive No. SBB/65/2017
The National Bank of Ethiopia repeals Directive No. SBB/60/2015 and imposes limits on bank investments, prohibiting direct engagement in insurance and non-banking business while allowing equity holdings of up to 5% in a single insurer and up to 10% in a single non-banking entity. Aggregate equity investments in all non-bank businesses, including insurance, are capped at 10% of a bank's net worth, and investments in real estate acquisition and development are limited to the same threshold without prior National Bank approval. Banks must report equity investments to the regulator within 30 working days and develop internal investment policies covering risk management and diversification, with specific exemptions for interest-free banking funded by restricted accounts and pre-existing investments.