FORTUNE+ VIDEO SPONSORED CONTENTS ADVERTORIALS FORTUNE AUDIO Fortune Careers TRADE AFRICA Election 2026 New TIME REMAINING UNTIL ETHIOPIA’S NATIONAL ELECTION 0Days 0Hours 0Minutes 0Seconds

Fortune Logo

Parliament Approves Law Allowing Entry of Foreign Banks

Dec 17 , 2024

Parliament has approved the Banking Business Proclamation, permitting foreign banks to enter and operate in Ethiopia.

The new legislation allows foreign banks to establish subsidiaries, purchase shares in local banks, and open branches or liaison offices. However, the law prohibits foreign investors from owning more than 40pc of shares in local banks. It also limits the combined shareholding of foreign nationals and foreign-owned Ethiopian organizations to 49pc of a local bank’s total shares.

The law stipulates that foreign banks can employ foreign nationals as senior executives but mandates the inclusion of resident Ethiopians on their boards.

The Council of Ministers approved the draft legislation in June. The government plans to issue banking permits to five foreign investors over the next five years.

However, some MPs opposed the bill arguing that the domestic banking sector, which suffers from a shortage of working capital and foreign currency, is not ready to face competition from foreign banks. They also stated that the central bank lacks the capacity to regulate foreign financial institutions effectively. Three MPs voted against the proclamation.

National Bank of Ethiopia (NBE) Governor Mamo Mihretu defended the law, stating that opening up the banking sector to foreign investors will benefit domestic banks. He said that the NBE has spent the past three years preparing regulatory mechanisms to oversee foreign banks.

Put your comments here

N.B: A submit button will appear once you fill out all the required fields.



Related Posts

Share This Post
Linkedin
Google+


Most read

Latest News

Editor's pick

Commentaries

Preparing for Trade-Based Financial Risks Beyond CBE's Record Numbers

Few financial institutions on the African continent have expanded their market presen...

For Small Firms, the World Has Already Arrived

A small business does not need to cross a border to face international competition. I...

Fineline

Leaders of the National . . .

Leaders of the National Election Board are in a charm offensive mood, of a sort. Last week, they organised a rare tour for members of the me...

When the country’s most. . .

When the country's most senior diplomats and envoys return back to their posts after two-week debriefings, they leave behind a point or two...

Editorial

Ethiopia Needs a Peace Premium the IMF Cannot Supply

Jul 11 , 2026

At a market stall, reform arrives without a communique. It comes as a higher transpor...

The New Gold Standard Comes with a Warning Label

Jul 4 , 2026

In the goldfields of the Benishangul-Gumuz Regional State, Ethiopia's balance-of-paym...

The Rent Law Protects No One Well. Time to Rewrite It.

Jun 27 , 2026

The federal legislative house rushed through one of the country's most contentious ho...

The Budget Bill Asks the Most from Citizens with the Least Slack

When Parliament takes up the appropriation bill, federal legislators will receive a d...

Gallery

Parliament Approves New Cabinet Members

Oct 6 , 2021

Parliament Approves New Cabinet, Incorporates Opposition Leaders Lawmakers have approved today the nominations of 22 ministers, including three opposition leaders. Two MPs have voted against, while 12 abstained...

2020 in Posterity

Jan 5 , 2021

TIGRAY VOTES DESPITE "NULL & VOID" THREAT

Sep 9 , 2020

IN-PICTURE: LAUREATE'S RECEPTION  

Dec 14 , 2019

PM Abiy Ahmed (PhD) at a Gala Dinner Called for the Awarding of the Félix Houphouët-Boigny Peace Prize

May 6 , 2019

Faces, Voices of Addis Abeba

Apr 26 , 2019

Sunday With Eden

A Body Trapped in Tomorrow

A medical doctor friend recently shared an area of research that had captured her attention. "Our bodies can't always tell the difference...

The Quiet Breakdown of Tax Fairness in Addis Abeba

Tax is the lifeblood of any modern state. It funds roads, schools, hospitals, security and the services p...

Life Matters

Borrowing From Tomorrow to Survive Today

The other day, I was having coffee with a friend, let's call her Maya: when she confessed something that...

Children Always Know More Than Parents Think

There is a familiar and exhausting mathematics to raising more than one child. It is the daily calculatio...