Bank limits raised

Doaa A. Moneim, Monday 5 Sep 2022

The Central Bank of Egypt has raised its limits on deposits and withdrawals at Egyptian banks, reports Doaa A. Moneim

Bank limits raised
Setting caps on deposits and withdrawals was a step towards a cashless economy


Clients at banks working in Egypt are now able to withdraw up to LE150,000 from their accounts in one day, compared to LE50,000 beforehand, according to a circular issued by the Central Bank of Egypt (CBE) earlier this week.

Those using ATMs can withdraw cash to a daily limit of LE20,000. The CBE also cancelled the limits it had set on cash deposits via bank branches or ATMs.

The limits were introduced in March 2020 as part of efforts to deal with the Covid-19 pandemic and to prevent crowds gathering around ATMs. They also encouraged people to rely more on cashless and contactless payments.

The CBE set the daily limit for cash deposits and withdrawals from bank branches at LE10,000 for individuals and LE50,000 for enterprises at that time. It set a limit of LE5,000 for cash deposits and withdrawals from ATMs, which it said would reduce crowding, particularly during payroll and pension disbursements.

A month later, the CBE raised the daily limit for cash withdrawals from ATMs to LE20,000 and then LE50,000.

The recent actions had been introduced because the Covid-19 crisis has receded, the CBE said. They are the first to be announced under the leadership of CBE Acting Governor Hassan Abdallah who entered office on 18 August after a presidential decree.

The deposit and withdrawal caps have also contributed to pushing e-payment and cashless transactions in Egypt. The number of e-wallets grew in the Egyptian market over the past three years to a record 26 million, up from nine million in previous years, with 23 banks introducing related services, according to CBE figures announced in March 2022.

Transactions using e-wallets rose to LE268 billion in value over the same period, up from LE88 billion in previous years, according to CBE Sub-Governor Ehab Nasr. Meanwhile, e-commerce transactions almost doubled to post LE30 billion, up from LE16 billion.

E-transactions using e-points of sales (PoS) increased during the same period to LE170 billion in value, up from LE110 billion in previous years, while the number of POSs grew by 978 per cent over the past three years to reach 740,000.

As a result of these transactions, the government collected a total of LE662 million in fees and other dues.

Ali Metwalli, an economist and risk analyst at Infospectrum, said he believes the CBE took the action to meet the requirements of the loan the government aims to close with the International Monetary Fund (IMF).

He explained that the IMF tends to want to ease limits on banking transactions. Prime minister Mustafa Madbouli said last week that Egypt was in the final stage of arrangements regarding a new deal with the IMF, which the country requested on the onset of the Russian-Ukrainian conflict.

Raising the withdrawal limits will help businesses affected by the limited daily access-to-access liquidity, he said.

Banking expert Hani Abul-Fotouh said that setting caps on deposits and withdrawals was a test period in the transformation towards a cashless economy as one of the key objectives of the CBE’s financial inclusion policy.

He cited CBE data published in March that showed that the number of ATM machines has increased by 37 per cent over the past three years and the number of payment cards had risen to 54 million up from 30 million.

E-wallets had jumped to 26 million from nine million, he said.

“These numbers reflect a tangible success in terms of cashless transactions that the CBE can bank on over the coming years,” Abul-Fotouh said.

Metwalli said that raising the limits would not slow efforts to depend more on cashless transactions as the CBE still allows clients to deposit, transfer, and withdraw money from ATMs without paying fees.

*A version of this article appears in print in the 1 September, 2022 edition of Al-Ahram Weekly.

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