CBE bans use of bank credit for capital financing and dividend payments

CAIRO - 21 June 2026: The Central Bank of Egypt (CBE) has directed banks not to extend any credit facilities to finance the capital of companies under incorporation or to cover increases in share capital.

The directive also prohibits the use of bank financing for cash dividend distributions and employee bonus shares, as part of efforts to strengthen controls over the use of credit across the banking sector.

In a circular issued following approval by the CBE Board of Directors on 17 June 2026, the central bank said the move aims to ensure that credit is directed toward productive economic activities in line with sound banking standards.

The CBE noted that the decision reinforces earlier instructions issued in March 2003, which barred short-term credit lines for financing company incorporation capital or completing required capital contributions, as well as guidance issued in September 2021 prohibiting financing of cash dividends to employees or shareholders.

The central bank stressed that banks must fully comply with the ban on financing capital payments for companies under incorporation or capital increases, as well as cash dividends and bonus shares, in order to ensure lending is focused on operational and investment purposes.