The ratification of a decree allowing international banks to conduct business in Ethiopia

The House of People’s Representatives has adopted a draft banking proclamation that will allow international banks to conduct business in Ethiopia. The House unanimously passed the draft amendment to the National Bank of Ethiopia during its eleventh regular session. The Standing Committee on Planning, Budget, and Finance Affairs delivered a report and resolution to the House on the draft proclamation on the National Bank of Ethiopia and banking. It is also anticipated that the draft banking proclamation will boost the competitiveness of Ethiopia’s banking sector and make a substantial contribution to the country’s continued economic growth.

Foreign banks’ involvement in Ethiopia’s banking industry is expected to boost foreign exchange reserves in addition to transferring technology and expertise. “Isn’t allowing foreign banks to enter the country tantamount to deciding that private banks will disappear?” asked House member Desalegn Chane in opposition to the proclamation. The House member stated, “This is what the government is planning to do when it comes to commercial banks,” although it is alleged that private banks have not even received assistance to enhance their capacities.” He added.

“Isn’t permitting foreign banks to operate in the nation equivalent to declaring that private banks will cease to exist?” “What?” Dr. Desalegn asked. He asserted that while allowing foreign banks to operate in the country offers the benefit of improving services and drawing in capital, there are drawbacks, including a lack of planning. The House member used the example of Amhara Bank, which has replaced Sinke Bank and Ahadu Bank, to bolster his assertion that private banks in other countries have a brief lifespan. He went on to say that hundreds of thousands of shares are in circulation in these banks and that the issue is serious. Additionally, the council member asked how they would handle them in the future.

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