Regulatory Alerts2021-05-15
Added · Updated
Minimum Capital Requirement for Banks (Amended) Directive No. SBB/78/2021
The National Bank of Ethiopia sets the minimum paid-up capital for obtaining a banking business license at Birr 5 billion, fully paid in cash. Existing banks with capital below this threshold must raise their capital by June 30, 2026, and submit an action plan within 30 days of the directive's effective date. Banks under formation or in the process of share subscription, as well as microfinance institutions relicensing as banks, may initially operate with Birr 500 million but must reach the Birr 5 billion requirement within seven years of commencing operations. All licensed banks must maintain a capital to risk-weighted assets ratio of at least 8% at all times, and failure to meet the minimum capital requirement may result in receivership or dissolution.