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 Banking Reform and
Liberalization :-
The banking sector plays a
crucial role in the development process of Egypt. The banking sector
consists of commercial banks, which are local banks and non-local
banks. It also includes specialized banks and financial
institutions operating in the fields of investment and credit for
industry, agriculture, housing and rural development. In addition,
there are branches affiliated to these banks and institutions.
Deepening this sector and its reform would lead to higher rates of
economic growth. This mechanism is achieved mainly through the role
of the banking sector in mobilizing more savings and channelling
them to better investment allocation. This, in turn, would lead to
higher productivity and more capital accumulation. To achieve these
results, an efficient banking system, prudential controls and a
friendly, non-distorted macroeconomic framework are requirede Banking industry in Egypt is amongst the oldest and
largest in the region.
Banking reform started as part of the open door policies in
the mid seventies when foreign banks were allowed to operate in Egypt. Later in
the nineties, as part of Egypt's economic and financial reform program, the
banking sector was completely liberalized, while banking supervision was further
strengthened in accordance to international standards .
The Government of Egypt has been currently undertaking a
comprehensive reform strategy for the financial sector as a
whole and the banking system in specific. The goal of
banking reform was creating an efficient banking sector
which offers better quality services .The financial reform
measures taken in the early 1990s emphasised reform of the
monetary and fiscal policies, not the revamping of financial
institutions.
Egypt is currently moving steadily towards becoming the
biggest financial center in the region. Owing to the
flourishing privatization program and the prospering
domestic bond market, banks have encountered new investment
fields which helped them diversify their portfolios and
lower their financial risks. Meanwhile, most banks expanded
on providing non traditional services such as brokerage,
investment consultations, asset valuation and sales, and
mutual fund operations which also helped improving capital
market services.
Banking reform was primarily based on promoting transparency
and use of adequate accounting and supervision standards.
According to the Law, banks are required to publish their
financial statements on quarterly basis in compliance with
the Accounting Standards (IAS). In addition, the Law
requires all banks to be audited by two different
independenl auditors, with auditors changing every two years.
In addition, Laws are periodically reviewed with the aim of
refining legislation to foster competitiveness in the
sector. To this effect, the new income tax law No. 5/1998
closed a chronic loophole which provided banks and financial
institutions with a double tax exemption through deducting
interest income from the tax base and use the proceeds in
purchasing tax free securities. The provisions of the new
law aim to spur innovation and healthy competition among
banks to engage in productive activities and extend loans to
customers and smaller businesses.
In June 1998, major amendments to the Banking Law which
permitted private ownership in public banks were ratified by
the Parliament. Individual banks invited international
financial houses for internal valuations and ratings. Later
in mid 1999, the Central Bank of Egypt and the General
Assembly of the two real estate banks approved the first
bank mergering in Egypt by merging the "Credit Foncier
Egyptien" and the "Arab Land Bank" into one financial
entity.
With a view to strengthening the Central bank role and
independence, the Ministry of Economy in cooperation with
CBE drafted a new Central Bank Law which aims towards
institutionalizing the Central Bank independence and
defining its role in determining the monetary policy.
Government efforts to reform monetary and fiscal policies
have gained momentum in 2001 when the cabinet agreed to
prioritise the modification of laws governing the
performance of the banking sector. In addition, drafts of
two key banking laws -- the Central Bank and National
Investment Bank laws -- were endorsed.
The first of these was an amendment to the law governing the
performance of the Central Bank of Egypt (CBE). Under the
amendment, the CBE would have full independence in drawing
up monetary policies and greater supervisory powers over the
banking system in Egypt.
The second bill aimed to alter the role of the state- owned
National Investment Bank (NIB) in boosting development and
fighting recession.
The cabinet's decision to amend the CBE law has been widely
hailed as a progressive step in Egypt's economic history.
The year 2007 witnessed the operation of the first credit
information company by the participation of more than 32
banks. Besides, the first release of stocks presented by the
Egyptian Pound succeeded, as the coverage volume reached
250% in the world money markets which reflects their
confidence in the Egyptian economy.
Work Hours at Branches
In Egypt
From 8:30 AM till 2:00 PM.
Branches are open until 5:00 PM
Banks Licensed to Carry
out E-banking
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