The second addition to the real estate financing initiative for the benefit of low- and middle-income people

Mr. Chairman of the Board of Directors Cairo, 12 May 2014 Bank

Greetings,

Further to my letter dated 6 March 2014, attached with the detailed rules and procedures for the decision of the Board of Directors of the Central Bank of Egypt dated 18 February 2014 regarding the activation of the real estate financing sector for low- and middle-income people, and in light of the Central Bank of Egypt's commitment to facilitating the implementation of the initiative, I would like to inform you of the following:

1. According to what was stated in the fourth item of the detailed rules and procedures attached to you, these are the rules for dealing with Treasury bills within the framework of the aforementioned initiative.

2. The dates of the monthly repayment schedules for the required amount stated in item /4a1/ are to be amended to become "... the last business day at the end of each quarter...." instead of "... the first business day after the end of each quarter ...".

3. The meaning of housing projects - included in the periodic letter issued on 26 March 2014

$$\text{Any residential unit eligible for mortgage and compliant with the conditions of the initiative.}$$

This, and in light of the numerous complaints received from customers who are directed by bank employees to the Central Bank to inquire about the conditions of the initiative, which reflect their lack of awareness of its terms, I would like to draw attention to the necessity of ensuring the awareness of employees in bank branches - especially customer service employees - and encouraging them to guide customers correctly, even in the event that the bank is not participating in the initiative, in order to ensure that complete information reaches customers and they benefit as much as possible.

Please accept my highest regards, Hesham Ramzy Abdel Hafez

Rules for dealing with Treasury bills within the framework of the Central Bank of Egypt's initiative to activate the real estate financing sector for low- and middle-income people

First: The bank submits a SWIFT message 599 MT for the required amount for each type separately (low-income - middle-income) to the BIC (CBEGEGCXBKO) with the priority level "URGENT".

• Start writing CMMS in the first line of Field 21, then specify the following: a. (MG) for middle-income initiative customers. b. (ML) for low-income initiative customers.

• The value of the amount required in the message represents the total loans granted to its customers during the previous month of the request up to the date of closing the CMMS system (5 business days before the end of the month).

Second: The bank specifies Treasury bills in the first message (low-income - middle-income) with the face value and maturity date using the same method followed in REPO operations according to the rules regulating Repo transaction agreements dated 16/3/2011, where the total current value of the submitted Treasury bills represents what is shown in the first item.

The content of the message (Field 79) is as stated in Attachment No. (1).

Third: It is observed that the maturity dates of the submitted Treasury bills against the required amount exceed the duration of the REPO operation by at least one week.

Example:

• A required amount for a period of 3 months starting on 4/1, the maturity date of the submitted Treasury bills is 91 days + one week.
• A required amount starting on 5/1, the maturity date of the submitted Treasury bills against it is two months + one week according to the end date of the operation due to the difference in the number of days in months.
• A required amount starting on 6/1, the maturity date of the submitted Treasury bills against it is one month + one week according to the end date of the operation due to the difference in the number of days in months.

Fourth: On the first business day after the end of the determined quarter (4/1, 7/1, 10/1, 1/1), the bank submits two SWIFT messages for each type (low-income - middle-income):

a. The first message for each type as stated in the first item. b. The second message for each type is a Rollover message (extension of the required amount that the bank obtained in the previous three months, e.g., 4/1, 5/1, 6/1) in order to renew Treasury bills from the perspective of their maturity dates and validity according to the third item, or to replace any Treasury bills for coverage according to the bank's wish.

• The second message (extension of the required amount - Rollover) represents the net of the face value of the amounts granted in the previous months, minus: o Installments paid to the Central Bank for that period. o Early repayment/sale of the unit for that period, if any.

The amount required for extension on the CMMS system screen must match the amount stated in the SWIFT message.

• Regarding the message type, in addition to what is indicated in the first item: o It is done in (CMMSMOG) for middle-income. o It is done in (CMMSMOL) for low-income.

The aforementioned messages are submitted until 10:00 AM on the first business day of the month, and the content of the message (Field 79) is as stated in Attachment No. (1).

Generally, the bank must observe accuracy in selecting Treasury bills regarding their face values, maturity dates, and submission dates, so that the bank's request for each type or the extension of the previously granted amount is facilitated. In case of non-compliance with the previous procedures, the Central Bank has the right to take all procedures and measures it deems appropriate.

(Attachment 1)

Reference is made to CBE Board of Directors decree dated 18/02/2014, CBE Governor circular dated 19/02/2014 and CBE rules and detailed procedures respect (activation of real estate sector for limited and moderate-income initiative) and their amendments if any, we hereby sell of the following treasury bills in EGP. And undertake to re-purchase them by the end of Repo transaction according to amount required or granted in the above mentioned initiative Amount Required ----------------------

Maturity date	Face Value of T-Bills
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