CBE Issues Rules for Licensing Digital Banks

The Central Bank of Egypt (CBE) issued Wednesday, the rules for licensing, registering, controlling and supervising digital banks, which represents an important step that keeps pace with global developments in the financial technology industry and meets the needs of customers in the Egyptian market, in continuation of the state's efforts to support innovation and transformation of the digital economy.

According to a statement by the bank, the new rules come in light of the provisions of the Central Bank and Banking System Law promulgated by Law No. 194 of 2020, which touched on the concept of digital banks and their banking services through digital channels or platforms using modern technological technologies.

The licensing requirements for digital banks include that the issued and paid-up capital should not be less than two billion pounds in the case of practising all the business of banks, except for financing large companies, with the possibility of financing those companies provided that the capital is increased to 4 billion pounds, as well as that the largest shareholder must be a financial institution with precedent in similar activities at least 30% of

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Among the requirements for obtaining the license received was the provision of a detailed feasibility study that includes the identification of target segments and the products to be made available, as well as information technology plans, cyber security plans and strategies.

Digital banks are subject to the same rules and controls for control and supervision applied to banks operating in the Arab Republic of Egypt, and the same laws and controls for combatting money laundering and terrorist financing, in addition to some other requirements consistent with the nature of their work.

These instructions support the realisation of the state's vision to transform into a less cash-based society, and work to enhance financial inclusion, and create a supportive climate for the financial technology industry. 

Digital banks develop and make available banking products and services in a distinguished distance and with high quality commensurate with the needs of all segments of society, including micro, small and medium enterprises and youth, with the aim of providing these services in an easy and simplified way.