The National Bank has approved a directive allowing the country’s 32 banks and 16 insurance companies to establish investment banks.
On Friday, July 12, 2016, during the 21st Ethiopian Economic International Conference, Brook Taye (Dr.), Director General of Capital Markets, announced the directive. This directive, which has received approval from the National Bank, banks, and insurance companies, aims to facilitate the establishment of investment banks.
Dr. Brook explained that the directive includes certain restrictions on banks and insurance companies setting up investment banks. The Ethiopian Capital Market, which was recently established, will be responsible for licensing and regulating these entities. This marks the first time the investment bank establishment license will be implemented in the country.
The directive specifically outlines that banks can engage in other investments, such as establishing an investment bank in the capital market. However, they are restricted from holding more than a ten percent share in business activities outside the banking sector.
Source: The Reporter
