NBE issued new directive requiring commercial banks to raise paid-up capital to 5 billion Birr


Mereja Media

The National Bank of Ethiopia (NBE) has issued the long-awaited directive requiring commercial banks to raise their minimum paid-up capital to 5 billion Birr.

This is a ten-fold increase from the previous 500 million birr paid-up capital requirement to establish a commercial bank in Ethiopia.

The directive has given a five year grace period for existing banks to raise their paid capital to 5 billion Birr.

Those banks which are under establishment are advised to merge and meet the required initial paid up capital.

The increase in a paid capital was meant to tackle growing risks of the time but experts claim huge capital cannot be a guarantee to avoid failure or default.

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