Category: National Bank of Ethiopia

Directive No. SBB/13/1996 NAMING OF OFFICERS

LICENSING AND SUPERVISION OF BANKING BUSINESS -Ethiopian National Bank Directives

Directive No. SBB/13/1996

NAMING OF OFFICERS

1. Issuing Authority

These directives are issued by the National Bank of Ethiopia pursuant to the

authority vested in it by Article 41 of the Monetary and Banking Proclamation

No. 83/1994 and by article 36 of the Licensing and Supervision of Banking

Business Proclamation No. 84/1994.

2. Designation

Unless a General Manager, Chief Executive or Principal Officer of a bank is

member of the Board of Directors of the bank, it is prohibited to designate him as a Managing director.

3. Effective date

These Directives shall enter into force as of 8th day of April 1996

Directive No. SBB/12/1996 LIMITATION ON INVESTMENT OF BANKS

LICENSING AND SUPERVISION OF BANKING BUSINESS -Ethiopian National Bank Directives

Directive No. SBB/12/1996 LIMITATION ON INVESTMENT OF BANKS

These directives are issued by the National Bank of Ethiopia pursuant to

the authority vested in it by Article 41 of the Monetary and Banking Proclamation

No. 83/1994 and by article 36 of the Licensing and Supervision of Banking

Business

Proclamation No. 84/1994.

1. No bank shall engage in insurance business but may hold up to 20% in an

insurance company and up to a total of 10% of the banks equity capital in such business.

2. Banks are prohibited from engaging directly in non-banking businesses such as agriculture, industry, and commerce.

3. A bank may hold shares in a non-banking business only up to 20% of the

company’s share capital and total holdings in such business shall not

exceed10% of the bank’s net worth.

4. A bank’s equity participation in another bank shall be subject to prior

authorization by National Bank of Ethiopia.

5. No bank shall commit more than 20% of its net worth in real estate acquisition and development other than for own business premises with out prior approval of the National Bank of Ethiopia.

6. A bank may not invest more than 10 %(ten percent) of its net worth in other securities.

7. The aggregate sum of all investments at any one time (excluding investment in government securities) may not exceed 50% of the bank’s net worth, with out

prior approval by the National Bank of Ethiopia.

8. Dealing in securities shall be done by banks only through a limited liability

subsidiary company wherein the holding of the bank shall not exceed 10% (ten percent) of its equity capital.

These Directives shall enter into force as of 8th day of April 1996.

Directive No. SBB/10/95 LIMITATION ON ACCOMMODATION

LICENSING AND SUPERVISION OF BANKING BUSINESS -Ethiopian National Bank Directives

Directive No. SBB/10/95 LIMITATION ON ACCOMMODATION

1. Issuing Authority

These directives are issued by the National Bank of Ethiopia pursuant to the

authority vested in it by Article 41 of the Monetary and Banking Proclamation

No. 83/1994 and by article 17(1) of the Licensing and Supervision of Banking

Business Proclamation No. 84/1994.

2. Definition

For the purposes of this Directive, ‘person’ physical (natural) person.

3. Limitation on Accommodation

No bank shall, directly or indirectly, except with the prior written approval of the Bank, grant or permit to be outstanding unsecured loans, advances or credit facilities of an aggregated amount in excess of birr 30,000.=(Thirty Thousand

Birr).

3.1 to its directors, or any of them, whether severally or jointly with any other person.

3.2 To any person of whom or of which it or any one or more of its directors is

a guarantor.

These directives shall enter into force as of 1st day of September 1995.

Directive No. SBB/9/95 COMPUTATION OF RISK WEIGHTED ASSET

LICENSING AND SUPERVISION OF BANKING BUSINESS -Ethiopian National Bank Directives

Directive No. SBB/9/95 COMPUTATION OF RISK WEIGHTED ASSET

1. Issuing Authority

These directives are issued by the National Bank of Ethiopia pursuant to the

authority vested in it by Article 41 of the Monetary and Banking Proclamation

No. 83/1994 and by article 36 of the Licensing and Supervision of Banking

Business Proclamation No. 84/1994.

2. Definition

2.1 For the purpose of these Directives, the capital of a bank consists of issued

and fully paid in shares, legal reserves and other reserves to be approved by

the National Bank of Ethiopia and

2.2 The minimum capital requirement shall be applied to a bank on a

consolidated basis, including subsidiaries and affiliates engaged in banking

and financial activities.

3. Manner of computation

Risk weighted assets and percentage weight attached to each asset shall be

calculated in the manner as shown in the tables attached herewith which shall be a part hereof.

These Directives shall inter into force as of 21st day of August 1995.