Egypt will issue a new banking law to regulate the Egyptian banking sector and the work of the Central Bank of Egypt (CBE). The new law includes 170 articles divided into 6 branches, Al Mal News reported.

However, the legislation has not reached the Egyptian Cabinet yet, Prime Minister, Sherif Ismail, stated, adding that one should not judge a law by its first draft, Al Mal News further informed.

The new act gives the CBE a broader surveillance on money exchange and money transfer institution, credit risk guarantee institutions, credit granting entities, credit rating companies, service outsourcing companies, as well as companies and agencies working in the field of payment systems and services.

Additionally, it increases the license and bank supervision fees 10 times to reach EGP 100,000 for every head office  , and EGP 50,000 for every branch or agency. The CBE will have the right to increase or decrease this fee by 25%. The fee should be deposited in an account of the supervision department at the CBE. The account is regulated by the CBE’s governor.

The new banking legislation further includes conditions that should be fulfilled while choosing heads and board members of the banks operating in Egypt. The conditions include the independency of the bank’s CEO from working, being a key contributor, and from representing any banking institution in the previous 3 years, which means that current banking CEO would be excluded from the coming CEO assigning. The assigned CEO should not have any up to 4th degree relatives in the board, and should not have any benefits that go in contract with the assigned CEO duties. Furthemore, the new head should not receive any additional payment from the bank, except the payment received for being a member of the board of directors.

Moreover, the banking law has limited the course renewal of the board members for only one time, instead of keeping it open for renewal as before.

The new law’s committee announced the necessity of reviewing some terms of the banking law as the committee members agreed on the cancellation of article no.109, which will result into excluding all current banking heads and depriving the banking sector from their experience.