CAIRO - 16 July 2023: The Central Bank of Egypt’s (CBE) decision to issue regulations for licensing and registration of digital banks, as well as their supervision and oversight, is an excellent step that aligns with Egypt's digital strategy, according to the Chairman of Banque Misr, Mohamed El-Etreby.
Etreby added in a statement - Egypt Today received a copy of- that it aims to enhance financial inclusion, build a competitive digital economy, expand financial technology, and utilize digital solutions in providing financial services.
For his part, Vice Chairman of Banque Misr and Chairman of Egypt Digital Innovation Company, Akif El-Maghraby, stated that they have been preparing for this step early on by establishing Egypt Digital Innovation Company, a subsidiary of Banque Misr, which is responsible for launching the first digital bank in Egypt.
“This is to provide electronic banking services and deliver an unparalleled and robust banking experience. It also aims to create alternative channels for banking services that are more accessible and advanced, attract new customer segments, especially the youth, and represents a significant leap in the banking services provided by Banque Misr, a pioneer in banking services in Egypt and the Arab region,” he added.
Sherif El-Behery, CEO of Egypt Digital Innovation Company, added, "We have been keen to leverage international experiences in digital banking and have formed partnerships with leading global companies specializing in digital banking and digital transformation. We have also partnered with global companies specialized in digital payments. Additionally, we have brought in experts from the banking, technology, and communications sectors to deliver a unique experience. Therefore, we are proud to be ready to operate the services of the first digital bank in Egypt."
Earlier in July, the CBEt issued regulations for licensing, registration, supervision, and oversight of digital banks, representing an important step that aligns with global developments in the financial technology industry and meets the needs of customers in the Egyptian market.
According to a statement by the CBE, the new regulations are in line with the provisions of the Central Bank Law and the Banking Law issued under Law No. 194 of 2020. They address the concept of digital banks and the banking services they provide through channels or digital platforms using modern technology.
The statement added that the licensing requirements for digital banks include a minimum issued and paid-up capital of two billion Egyptian pounds if they engage in all banking activities except financing large corporations. However, these corporations can be financed provided that the capital is increased to four billion Egyptian pounds. Additionally, the largest shareholder must be a financial institution with prior experience in similar activities, representing at least 30 percent of the total capital value.
The statement further explained that among the licensing requirements is the submission of a detailed feasibility study, which includes identifying the target segments and planned products, as well as information technology plans, cybersecurity plans, and strategies. Digital banks are subject to the same rules and regulations applied to operating banks in the Arab Republic of Egypt, including those related to combating money laundering and financing terrorism, in addition to other requirements that are consistent with their nature of work.
The statement emphasized that these instructions support the state's vision to transition to a society with less reliance on cash, while enhancing financial inclusion and creating a supportive environment for the financial technology industry. Digital banks develop and provide banking products and services remotely and with high quality, tailored to the needs of all segments of society, including micro, small, and medium-sized enterprises, and the youth category. The aim is to facilitate access to these products and services quickly and easily.
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