Reducing the cash deposit for documentary credits or promissory notes for the account of merchants for trading or for the account of government agencies from 100% to 50%

Greetings and after,

I would like to refer to the letter from Dr. the Governor dated March 9, 1999, which contained a summary of what was agreed upon during the meeting held with the gentlemen heads of boards of directors of banks and executive members on March 2, 1999, including the necessity for banks to obtain a cash deposit of 100% for documentary credits opened to finance the import of goods for the account of merchants for trading purposes or for the account of government agencies, and to obtain a deposit at the same ratio in the case of enhancing bills presented against supplier facilities to import these goods for the account of those entities, or to meet any obligations on the bank, including issuing guarantee letters regarding import operations for the account of merchants and government agencies. As for documentary credits for importing goods for non-trading purposes, such as what factories import of capital goods or production supplies and raw materials, etc., there are no restrictions whatsoever except the usual banking rules, and in light of the developments that have taken place since then, it may be appropriate, taking into account the results of the credit studies conducted by your bank, to limit the cash deposit in the cases presented to 50% effective from July 1, 2010, with confirmation of the following:

1. The necessity to observe the credit granting guidelines issued by the Central Bank of Egypt.

2. The importance of having complete information about the types of imported goods, their importance to the local market, and the client's ability to dispose of them within a suitable time period.

3. The bank's review of its credit policy on a periodic basis to amend it according to market developments and changes, ensuring coverage of risks arising from these operations.

Please be so kind as to alert regarding the full compliance with what is stated in this letter.

Accept the highest respect,

Gamal Najm

Cairo on: June 30, 2010

Greetings and after,

I would like to refer to my letter dated June 28, 2010, regarding the cash deposit required to be provided by the client in cases of opening documentary credits or enhancing bills presented against supplier facilities or issuing guarantee letters to import goods for the account of merchants for trading purposes or government agencies.

In light of the inquiries received from some banks, I would like to inform you that each bank, according to its credit policy and the studies it conducts regarding its clients, may determine the cash deposit ratio in these cases on a case-by-case basis with a minimum of 50%.

Please be so kind as to be informed and alert regarding the full compliance with what is stated in this letter.

Accept the highest respect and appreciation,

Gamal Najm