In light of the Egyptian banking sector reform program and as part of the recommendations of the Euro system technical assistance program, the regulations department was established in mid of 2007 as an independent department under the banking supervision sector.
The department is responsible for developing new and amending current regulations for the banking sector in accordance with the following:
i. International best practices and regulations issued taking into consideration the nature of the Egyptian banking sector.
ii. Responding promptly to developments in the banking sector.
iii. The Egyptian legal and accounting framework
iv. Ensuring the clarity of the rules and regulations issued by the Central Bank of Egypt.
v. Availing all prudential regulations to interested parties whether inside or outside the central bank of Egypt.
1. Setting prudential regulations
This phase consists of the following steps:
- Introducing the idea of a regulation in response to:
i. Market developments.
ii. Reform needs
iii. Onsite / offsite supervision comments / suggestions
iv. Guidelines issued by the Basel committee and / or any other standard setters.
v. Global and local developments in accounting standards.
- Identifying best practice.
- Take stock of the existing regulations and legal framework.
- Identify gaps between existing regulations and international standards.
- Conduct impact assessment (quantitative simulation and analysis).
- Draft detailed proposal for new regulations including:
i. Simulation results and comments.
ii. Proposal of different possible alternatives / solutions.
iii. Recommendation of most suitable alternatives and justification.
This phase is considered to be the most important one as it crystallizes the draft regulation into its final form. It includes the following steps:
- Discussing the regulation draft internally with the banking supervision departments and carrying out the necessary amendments requested in the course of discussions.
- Conduct consultations with other stakeholders to get consensus, spread awareness regarding the draft regulation, and prepare the final version.
- Presenting the draft regulation to the top management for their approval
- Drafting the final regulation draft
- After performing all the amendments – if any – on the final regulation draft and obtaining the final approval of the top management, a final memo is prepared for the governor to present the issue to the board of directors of the CBE including the proposed final draft regulation.
- After obtaining the approval of the CBE's board of directors, a circular is then prepared and in coordination with secretariat of the BOD, the BOD decree is then prepared un its final form taking into consideration any amendments.
- The final regulation is then promptly circulated to the banking sector and internally within the Banking Supervision departments.
- Receive response from banks and reply to their queries via direct contact with the bank or through the offsite department.
- Prepare and make available frequently asked questions (FAQ) with the purpose of:
i. Clarifying details regarding the understanding of the issued regulations
ii. Standardizing the answers to banks' queries leaving no room for personal interpretations.
iii. Minimizing the time lost in answering banks' questions by Banking Supervision.
2. Continuous review of the existing regulations with the purpose of proposing amendments or omitting obsolete / outdated regulations.
3. Reinforce the Banks’ Corporate Governance and Internal control systems through the following:
- Issuance of the related regulation and ensuring that it is clear and understandable to all stakeholders within the banking sector through conducting seminars and training programs to CBE and Banks' employees.
- Conducting periodic evaluation to assess regulations’ status through the in depth analysis of the following:
i. The reports prepared by other supervision departments to portray the overview of banks’ breaches and concerns as well as the decisions taken against them.
ii. Obstacles that practical application or questions received have revealed.
iii. Changing needs in banking sector.
iv. Developments in relevant international practices.
- Propose amendments on the existing regulations in light of the conducted analysis.
Central Bank of Egypt
Banking supervision sector
4. Review and comment on the law 88 for the year 2003 amendments and other laws drafts submitted to the banking supervision sector for commenting
5. Preparation, review and negotiation of MOU’s with:
- Other Egyptian authorities for national cooperation
- Supervisory authorities in other countries for international cooperation
(supervisory colleges , multilateral MOU , bilateral MOU )
6. Updating and publishing of the compendium on an ongoing basis.
7. Updating the CBE website.
8. Spreading awareness within CBE and among bank's personnel through:
- Holding training programs.
- Holding seminars and meetings