Sep 17 , 2022
The promoters of Damot Bank have decided to dissolve the would-be financial institutions after struggling to raise enough equity to meet the central bank's minimum paid-up capital threshold. Only three of over two dozen banks under formation managed to meet the window deadline to raise half a billion Birr in equity last November. Their promoters have since been forced to raise 10 times as much, dissolve or seek other options. Damot's promoters had begun raising equity in October 2020. Regulators have granted private banks in operation a seven-year window to comply with the updated capital threshold. Several, such as Awash Bank and the Bank of Abyssinia, have already met the requirement. However, most have yet to secure the equity. The issue is more pressing in light of a decision from a recent decision by the Council of Ministers permitting foreign investors into the financial sector for the first time in five decades.
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