Following years of speculation, the federal government has decided to allow foreign investors into the financial sector. Last week, the Council of Ministers approved a policy to allow foreign banks to operate in the country. It is the first step in permitting foreign involvement in the financial sector since the Dergue regime forced all foreign banks to cease operations nearly five decades ago. Regulators have been putting measures in place to strengthen domestic banks, whose numbers have swelled to nearly two dozen over the past year. This includes raising the minimum capital threshold by 10 fold to five billion Birr. Some private banks are in the clear. Awash Bank leads its peers with 11 billion Br in subscribed capital. Dashen and the Bank of Abyssinia follow with close to seven billion Birr each. Two months ago, Amhara Bank joined the industry with a cool six billion Birr in paid-up capital, the first bank to achieve such a monumental feat in the first year of operation.
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