NBE Demands Investment-Grade Rating for Foreign Banks

Jun 29 , 2025

The National Bank of Ethiopia (NBE) has issued a new directive requiring foreign banks to hold an investment-grade rating of at least BBB from Standard & Poor’s or Fitch, or BAA from Moody’s, as a precondition for entering the local banking sector. The directive, which revises licensing and renewal requirements for foreign bank subsidiaries and representative offices, also sets the minimum paid-up capital at 5 billion Br for both domestic banks and foreign branches. Capital from foreign investors must be inwardly remitted in an acceptable foreign currency. Ownership limits have been tightened: individuals may hold up to 7pc of a bank’s subscribed shares, legal entities up to 10pc, and total foreign ownership in non-subsidiary banks is capped at 49pc. Foreign banks are permitted to operate either deposit-taking or non-deposit-taking branches, but not both. Each branch must appoint a senior country officer and set up a branch management committee. The directive also includes fit-and-proper criteria for promoters, board members, and senior managers, and mandates that all customer data, account details, and transaction records be stored and processed within Ethiopia. The new rules took effect on June 25, 2025.