Egypt’s parliament – the House of Representatives – resumed on Sunday discussing a new government-drafted law on the Central Bank of Egypt (CBE) and the banking sector.
MPs approved articles 64 and 65 which regulate the licensing of foreign banks in Egypt.
Article 65 states that for a foreign bank to be licensed in Egypt, its branch should have a capital of $150 million, be subject to the supervision of the central bank of the country in which its headquarters are located, that it receives permission from this central bank as a precondition to perform in Egypt, and that it accepts that its activities in Egypt be overseen by the CBE.
It also states that the activities of a foreign bank in Egypt should not go in conflict with the state’s general economic interests.
“It shouldn’t be involved in any monopolistic and anti-competition practices,” Article 65 says, adding that “a foreign bank should also have a clear structure of ownership and its money must come from legal sources.”
To achieve this objective, a foreign bank asking for a licence in Egypt should submit a feasibility study showing the nature of its activities and services, and also submit a study on the local market showing how it will be able to mobilise savings from individuals and how it will use them.
The name of a foreign bank operating in Egypt should be distinct and not be similar in any way to the names of any other banks.
Egypt’s parliament began on 4 May discussing a new 294-article law regulating the performance of the CBE and the banking sector.
The law, which has been in the works since 2017, was approved in principle.
According to a report prepared by parliament’s economic affairs committee, the law aims to reinforce the supervisory powers of the CBE in terms of raising its capital to EGP 20 billion to help it exercise its financial obligations.
The law also tackles the CBE’s roles in licensing foreign banks and representation offices in Egypt.
It stipulates that banks operating in Egypt should have capital of at least EGP 5 billion and branches should have capital of at least $150 million.
The law is expected a get a final approval from MPs on Sunday.