Egypt - Apply for a Banking Business license

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Procedure

Obtaining a Bank Business license include the following steps

Step I -

Book an appropriate name with the Commercial Registrar of Companies and write to the Centrl Bank to seek approval for the name. The name should incorporate the words Commercial Bank, ie "XYZ BANK". or "XYZ COMMERCIAL BANK".

Step II -

Register with the Ministry of Finance in Egypt.

Step III -

Attend a First meeting with the organizers and keep with you a Signed minutes of the first meeting along with attendance sheet.

Step IV -

Submit a prospectus which is a printed statement that describes and forecast the course or nature of the Commercial bank along with expected risks distributed to the prospective investors.

Step V -

Write an application requesting to open a blocked subscription account indicating the name of the Bank(s)Branch(es)

Step VI -

A Duly completed application form as specified under the Bank proclamation of the Directives for organizing a Bank and project manager. Attach a Questionnaire test for organizing a bank and project Manager.

Step VII -

Attach Evidences of payment of investigation.

Step VIII -

A duly completed application form together with all enclosures as stated in the baking supervision Directives.

Step IX -

Attach the evidence of paid up capital which includes certificate of deposits in a blocked account and evidence of valuation of contribution in Kind if any.

Step X -

Attach a list of names nationality,address,number and value of subscribers shares of founder to be published in a local Newspaper in Egypt.

Step XI -

After the name has been approved by the Central Bank of Egypt, register the company and after making a formal application to the Director, Bank Supervision Department, Central Bank of Egypt in a duly completed FORM/CBK/FXD1 attaching the following documents:

• non-refundable application fee of EGP 10,000 (bankers cheque payable to the Central Bank of Egypt);
• a certified copy of a statement of affairs of the applicant;
• a certified copy of the applicants memorandum and articles of association;
• a certified copy of the applicants certificate of incorporation;
• a feasibility study including financial projections for three years (balance sheet, profit and loss account and cash flow statements), organizational structure, physical location and postal address;
• bank statements of the Commercial Banks shareholders and directors for a period of six months prior to the date of application;
• duly completed fit and proper forms for the shareholders, directors and principal officers of the bank;
• credit reports from a credit reference bureau for the shareholders, directors and the principal officers of the Bank;
• a declaration by the applicant that none of its directors and/or shareholders has ever been declared bankrupt, participated in the management of a collapsed institution, convicted by any court of competent jurisdiction in Egypt or elsewhere of a criminal offence involving fraud, money laundering, tax evasion, or any other act of dishonesty;
• a declaration by the applicant that none of its directors and/or shareholders holds a similar position or role in any other Commercial Banks;
• an undertaking by the applicant to comply with the provisions of the Central Bank of Egypt Act, the Regulations, the Commercial Banks Guidelines and any instructions/ directions issued by the Central Bank of Egypt regarding the establishment and operations of Commercial bank at all times; and
• A Business plan stating, financial analysis,banking sectoral analysis, business Environment,organization charts,strategic and operation plan,source of capital, accounting policies,technology competency, products and services.
• any other information as may be required by the Central Bank of Egypt.

Step XII -

• pay the licence fee of EGP30,000 to the Central Bank of Ethiopia by bankers cheque;
• transfer the non-interest bearing deposit of US$30,000 to the Central Bank of Egypt offshore account;
• invite the Central Bank of Egypt to inspect the Banks premises prior to commencement of business.

Step XIII -

Upon fulfillment of the above requirements or otherwise the Central Bank shall:

• issue a Banking licence to the applicant; or
• inform the applicant in writing that the application has been declined and advise the unsuccessful applicant that an appeal to the Central Bank for review of the decision to decline may be lodged within 30 days from the date thereof.

Step XIV -

On receiving the license from the Central Bank of Egypt, the applicant must obtain the certificate of commencement of Business from the Commercial registrar of companies,and submit a copy to the Central Bank of Egypt.

• Notify the Central Bank of Egypt of its Shareholders,directors and Staff of the Commercial bank including the following details:

• Names
• Residential Address
• Specimen signature
• Recent passport size photos endorsed by the Bank Directors.

Note

Banks may only terminate their activities after obtaining of the approval of the Central Bank, and the Central Bank has the right to reject the appointment of the members of the board of directors of banks, and of their top managers.

The Central Bank has the right to cancel the registration of banks and branches of foreign banks operating in Egypt if they contravene the Banking Law, or if they adopt policies that harm the general economic interest or the interest of their depositors or their shareholders.

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Required Documents

• Completed application and other accompanying documents;
• Investigation fee paid during submission application;
• Publish a notice of intention to engage in banking business in widely circulating newspapers;
• A minimum of one-fourth of the subscribed shares shall be fully paid in cash;
• Minimum paid-up capital paid in cash and deposited in a blocked account in a bank in the name of the prospective bank; (recently the National Bank has raised the minimum paid up capital to half a billion birr from 75 million birr.)
• Directors, the chief executive officer and senior executive officers of the bank shall meet the qualification criteria prescribed by the Central Bank of Egypt;
• The premises, security arrangements and cash vault meeting Central Bank of Egypt standard.
• A duly completed application form.
• Proper book keeping Register

Office Locations & Contacts

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Eligibility

• Commercial Banks may be established by any eligible corporate body or corporation duly licensed by the Central Bank of Egypt to accept Deposit,lend money,issue money to clients, buy foreign currency and draft and sell foreign currency.
• Commercial banks applicant must be an Egyptian Nationality or foreign resident but residing in Egypt.
• All Individual or company registered for banking Business in Egypt with the registrar of Companies.

Fees

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Validity

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e.g. Birth Certificate Valid Forever

Documents to Use

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Sample Documents

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Processing Time

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Related Videos

Videos explaining the procedure or to fill the applications. 
Attach videos using the following tag <&video type="website">video ID|width|height<&/video&> from external websites.
Please remove the "&" inside the tags during implementation.
Website = allocine, blip, dailymotion, facebook, gametrailers, googlevideo, html5, metacafe, myspace, revver, 
sevenload, viddler, vimeo, youku, youtube
width = 560, height = 340, Video ID = Can be obtained from the URL of webpage where the video is displayed.
e.g In the following url "http://www.youtube.com/watch?v=Y0US7oR_t3M" Video ID is "Y0US7oR_t3M". 

Instructions

• The Central Bank has broad powers in the affairs of banks. It can suspend or remove a CEO, director or other senior executives,
• It also can suspend voting right of an influential shareholder when he fails to fulfill the ethical requirements of the Central Bank.

• No person shall carry out a Banking business unless he/she is in possession of a Banking Business License.
• A person who fails to contravenes or fail to comply with section 1 shall be guilt of any offence and shall be dealt with in accordance with Financial laws

Required Information

• Full Name of Applicant
• Address of Applicant
• Location of Commercial bank
• License Number
• A tax clearance certificate.
• Evidence of provisional tax payment
• Full names, addresses and designations of the employees of the commercial Bank.
• Proof of legal identification. Your national driver's license or international passport are the best for this.
• Proof of legal address. House rent receipts, and utility bills stating your house address are acceptable.
• Bank statement. Not all Authorities require this except for further verification purpose or alternatives.
• Utility Bill Receipt. Some Authorities require this to further verify your legal identity and proof of social responsibility.

Need for the Document

Banking is a rapidly growing industry in Egypt.The Central Bank of Egypt has not issued a new commercial banking license since 1979. Currently the only way for a new commercial bank, whether foreign or domestic, to enter the banking business or market (except as a representative office) is to purchase an existing bank.

Central Bank of Egypt is apparently reluctant to license new domestic banks as it regards the number of existing ones large enough for establishing a competitive market.

As part of its 2004 plan to restructure the banking sector, the government has sold shares in several joint venture banks to foreign banking entities.

There are 3 state owned commercial Banks in Egypt(Banque Misr, Banque du Caire, National Bank of Egypt) and these three banks control at least 40 percent of the banking sector's assets. The rest are private commercial banks; Commercial Bank of Egypt is the largest, controlling the majority assets of the industry.

All specialized banks are state owned and are assigned the task of providing long term finance for real estate, agricultural and industrial development.

Despite strict government regulations through lending quota, bond buying, windfall tax and increased capital requirements, banks are reporting strong profit and paying high dividends.

The proper licensing and supervision of banks and the banking system in Egypt are under the National bank of Egypt of the Banking business Law no 88 of 2003 (the Banking Law). The National Bank of Egypt was established in 1957 by Banking LAW NO. 163 OF 1957.

Information which might help

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Other uses of the Document/Certificate

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e.g. Birth Certificate can be used as proof of identity.

External Links

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Others

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