Subject: Client Alert: Egypt’s New Banking Law: Projects & Finance – The Securities Regime

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Egypt's New Banking Law
Alert#2: Projects & Finance - The securities Regime
Sharkawy & Sarhan Newsletter 
Issue 117, 2 November 2020
The new banking law 194/2020 was issued and published on 15 September 2020 (“New Banking Law”). This new law is set to achieve several key goals, in particular, to ensure that Egypt’s banking system keeps pace with international standards of best practice and to ensure that the required legal framework is in place so as to allow for and facilitate the development and modernisation of the payments system. This is an essential pillar in achieving the Government’ s economic expansion plan driven by increased financial inclusion and digital transformation.

In this alert, we explain changes in respect of collateral, dealings in foreign currency and digital banks.

Click here to view our first alert on Payments, Fintech & Electronic Evidence.

Stay tuned for our next alert in this series on the New Banking Law: Alert#3: Banking M&As – The Implications of the New Banking Law on M&A Transactions.

1. The Securities Regime:

  • The New Banking Law designated the Central Bank of Egypt (the “CBE”) as the competent authority for granting licenses to Egyptian banks, foreign banks and international financial institutions to allow these entities to obtain commercial enterprise mortgages (article (106) of the New Banking Law). Previously, article (10) of Law 11/1940, cancelled by the New Banking Law, granted this licensing authority to the Minister of Trade and Industry. The licensing process through the CBE is expected to be much easier and faster than previously, given the practical approach of the CBE and its familiarity with dealing with banks and financial institutions. It is unclear whether existing license holders will need to obtain a new license from the CBE or whether the old licenses will continue to apply. Clarification on this point is expected over the next few months. The New Banking Law provides a grace period of 1 year from the date of issuance for entities to comply. We therefore anticipate that institutions requiring new licenses from the CBE will also benefit from such a grace period of 1 year.

Ahmed Haggag - Partner

Noha Eissa - Associate

Building 2, Gamal Abdel Nasser Axis,Fifth Settlement, Postal Code 11865, Cairo, Egypt.
Tel : +202 2322 5400
Fax : +202 2322 5401

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