Officials at the central bank have turned down a formal request for the extension of a deadline to meet new capital requirements for financial institutions gearing up to join the banking industry. Three weeks ago, the promoters of seven banks racing to enter the industry submitted a letter to the National Bank of Ethiopia (NBE), appealing for additional time to raise half a billion Birr in paid-up capital needed to acquire a license. A directive issued by the central bank earlier this year dictated new entrants that had already begun selling shares to the public had to meet the minimum threshold by mid-September. It came as a blow when Yinager Dessie (PhD), governor of the NBE, expressed that there is no intention of extending the deadline having communicated the decision to the requesters in a letter written last week. The financial institutions that submitted the request, including Jano, Ge'ez, and Afro banks, will now be forced to seek mergers to meet the requirements by the deadline next month, raise five billion Birr in paid-up capital, or dissolve. Two interest-free banks, Ramis and Zad, have already agreed to a merger, with the former having raised 400 million Br in paid-up capital while the latter has raised a little over 80 million Br.

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