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New Rules for Public Sector Banks’

New Rules for Public Sector Banks’ Salaries
The Prime Minister issued, in early January 2013, two decrees No. 19 and 20 of 2013 in regards to public sector banks’ salaries. The two Decrees set a maximum for what the chairman and vice-chairmen of public sector banks can earn, and the liquidation of the Banking Sector Modernization and Development Fund. Here are the details.
Maximum Wage Applied to Public Sector Banks
The first Decree, No. 19 of 2013,[1] determines that the net monthly salary of public sector banks chairmen is to be the maximum set in the Decree-Law No. 242 of 2011 and the Prime Minister’s Decree No. 322 of 2012. Both had set the maximum pay in any public sector company, authority or state organ at a thirty-five multiple of the lowest salary in that entity. However, they had also exempted from this limit public sector banks. The new Decree abolishes this exemption and accordingly subjects the chairmen of public sector banks to this limit. The new Decree also states that deputy chairmen of public sector banks will earn a net monthly salary equivalent to 90% of that earned by the chairman of the bank.
Liquidation of Bank Modernization Fund
The second Decree, No. 20 of 2013,[2] states that the Banking Sector Modernization and Development Fund is to be liquidated. That Fund was established by virtue of the Banking Law No. 88 of 2003 and Prime Minister’s Decree No. 1865 of 2005. Its resources were made of contributions by the public sector banks and were used in supporting the implementation of the banking modernization program. However, over the last few years it had been criticized for funding salaries of banking officials and accordingly the new Prime Minister Decree was issued to provide for its immediate liquidation and the distribution of its remaining resources among its original contributors, i.e. the public sector banks. But whereas the two Decrees will provide comfort to public opinion in light of its demand that banking salaries be limited, it will put us back in front of the initial problem, which is how to attract and keep high caliber human resources in the public banks. From the legal point of view, the provisions stated in the two Decrees should have been introduced in the Banking Law itself and not in legislation that is of a lesser degree in terms of legislative hierarchy.   [1] Prime Minister’s Decree No. 19/2013 on Public Sector Banks’ Salaries, Egyptian Gazette, Issue No. 7 (cont.), 9 January 2013. [2] Prime Minister’s Decree No. 20/2013 on Public Sector Banks’ Salaries, Egyptian Gazette, Issue No. 7 (cont.), 9 January 2013
The Prime Minister issued, in early January 2013, two decrees No. 19 and 20 of 2013 in regards to public sector banks’ salaries. The two Decrees set a maximum for what the chairman and vice-chairmen of public sector banks can earn, and the liquidation of the Banking Sector Modernization and Development Fund. Here are the details.
Maximum Wage Applied to Public Sector Banks
The first Decree, No. 19 of 2013,[1] determines that the net monthly salary of public sector banks chairmen is to be the maximum set in the Decree-Law No. 242 of 2011 and the Prime Minister’s Decree No. 322 of 2012. Both had set the maximum pay in any public sector company, authority or state organ at a thirty-five multiple of the lowest salary in that entity. However, they had also exempted from this limit public sector banks. The new Decree abolishes this exemption and accordingly subjects the chairmen of public sector banks to this limit. The new Decree also states that deputy chairmen of public sector banks will earn a net monthly salary equivalent to 90% of that earned by the chairman of the bank.
Liquidation of Bank Modernization Fund
The second Decree, No. 20 of 2013,[2] states that the Banking Sector Modernization and Development Fund is to be liquidated. That Fund was established by virtue of the Banking Law No. 88 of 2003 and Prime Minister’s Decree No. 1865 of 2005. Its resources were made of contributions by the public sector banks and were used in supporting the implementation of the banking modernization program. However, over the last few years it had been criticized for funding salaries of banking officials and accordingly the new Prime Minister Decree was issued to provide for its immediate liquidation and the distribution of its remaining resources among its original contributors, i.e. the public sector banks. But whereas the two Decrees will provide comfort to public opinion in light of its demand that banking salaries be limited, it will put us back in front of the initial problem, which is how to attract and keep high caliber human resources in the public banks. From the legal point of view, the provisions stated in the two Decrees should have been introduced in the Banking Law itself and not in legislation that is of a lesser degree in terms of legislative hierarchy.   [1] Prime Minister’s Decree No. 19/2013 on Public Sector Banks’ Salaries, Egyptian Gazette, Issue No. 7 (cont.), 9 January 2013. [2] Prime Minister’s Decree No. 20/2013 on Public Sector Banks’ Salaries, Egyptian Gazette, Issue No. 7 (cont.), 9 January 2013