Central Bank Issues Digital Banks Licensing and Supervision Rules
To complement the country’s efforts to support innovation and transformation of the digital economy, the Central Bank has issued the rules for licensing, registering and supervising digital banks, which represents an important step to keep pace with global developments in the fintech industry and meet the needs of customers in the Egyptian market.
The new rules come in the light of the provisions of the Central Bank and Banking System Act, promulgated by Law No. 194 of 2020, which touched upon the concept of digital banks and their banking services through digital channels or platforms using modern technology.
Licensing requirements for digital banks include not less than 2 billion source and payable capital in case of all bank business with the exception of financing major companies, with the possibility of financing these companies provided that the capital is increased to 4 billion pounds as well as that the majority shareholder is a financial institution with a prior business in similar activities at least 30% of the total capital value.
Among the requirements for obtaining the permit received was a detailed feasibility study involving the identification of target segments and planned products. as well as information technology plans, plans and strategies for cybersecurity, knowing that digital banks are subject to the same rules and regulations for the supervision and supervision of banks operating in the Arab Republic of Egypt, Laws and regulations on combating money-laundering and the financing of terrorism, as well as some other requirements, are consistent with the nature of their work.
Those instructions support the realization of the State’s vision of becoming a less critical society and promote financial inclusion and create a supportive climate for the fintech industry Digital banks develop and make available products and services remotely and with high quality commensurate with the needs of all segments of society. including micro, small and medium enterprises and the youth group, with the aim of facilitating access to these products and services in a quick and easy manner.
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