FORTUNE+ VIDEO SPONSORED CONTENTS ADVERTORIALS FORTUNE AUDIO Fortune Careers New TRADE AFRICA New

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

The Cost of Capital Is a Public-Health Emergency for Africa

The annual meeting of the World Health Organisation's member states, May's 78th World...

The BRICS+ Should Not Miss the Africa Opportunity

The 10 current BRICS+ members, more than most countries, can empathise with the econo...

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

Legal, Policy Volatility Turns Promises into Headwinds

Jul 12 , 2025

Political leaders and their policy advisors often promise great leaps forward, yet th...

Civil Society Feels the Squeeze as Reform Era Unravels

Jul 5 , 2025

Six years ago, Ethiopia was the darling of international liberal commentators. A year...

Soaring Taxes Fail to Plug Holes as Audit Reveals Enduring Waste

Jun 28 , 2025

Meseret Damtie, the assertive auditor general, has never been shy about naming names...

Expanding Federal Budget Tests Limits of Fiscal Discipline

Jun 21 , 2025

A well-worn adage says, “Budget is not destiny, but it is direction.” Examining t...

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

Half a Century of Impact

On a cold Saturday afternoon last week, we gathered to honour a couple who have profoundly shaped both my life and my husband's, not just sp...

Rise Without Ruin

At times, the pursuit of opportunity quietly takes on a ruthless tone. Success begins to feel like a zero-sum game, where someone must lose...

Life Matters

Lessons in Bureaucracy

Navigating bureaucracy often feels like moving through a labyrinth, where logic falters and clarity dissolves. The rules change with bafflin...

The Nuances of Baby Carrying

Each morning, just beyond the compound gates, a familiar image greets the day: a mother walking briskly with her baby snug in a front carrie...