Egypt’s new banking law to boost development: Economic experts

When passed, the new banking bill will boost development in Egypt, being revolutionary in terms of dealing with the challenges that the fiscal and banking system is facing, said the co-founder and manager partner of Khodeir Partners for Consultations, Mohamed Khodeir.

Khodeir’s comments came during a roundtable discussion on Wednesday held to tackle the new banking law and its role in enhancing Egypt’s economic development.

The draft was prepared by the Central Bank of Egypt to maintain, according to experts, the banking sector’s safety and supervise banks more closely. The bill was submitted to parliament in late 2019 and it is currently discussed in the parliament after the approval of its Economic Committee.

Khodeir said the banking system is Egypt’s economic backbone, with more than EGP 4 trillion of deposits and approximately EGP 2 trillion of granted loans. Banks also introduced about EGP 9 billion over five years for 18,000 private sector enterprises that have ventured into the banking sector recently.

Loans that have been granted to small projects accounted for 14 percent of the whole sum, which is suitable if compared to the labour force in the domestic market, estimated at 28 million workers, according to Khodeir.

“The Central Bank of Egypt has already moved forward to cope with the challenges that the Egyptian economy witnesses on the ground. It launched a package of initiatives that aim to counter the industrial sector’S pitfalls and released the new banking law that includes key paths towards economic prosperity,” Khodeir added.

The new banking law will strengthen the governance of the central bank and maintain its independence. Moreover, it will enhance the investment sector, including the investment banks, and boost supervision over the banking system to upgrade the banking sector and cope with the likely risks.

Meanwhile, Ahmed Kotb, head of the Disputes Settlement Department at Khodeir Partners for Consultations, said the new banking law will allow banks to buy real-estate units with debts and to collect the debts from the previous owner of the unit, which alleviates the burden on debtors.

Source: Al-Ahram Weekly