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National Bank of Egypt Issues New D

National Bank of Egypt Issues New Dollar CDs
On 19 May 2012, the Minister of Finance issued decision No. 250 of 2012 (the “Decision”) concerning the terms and conditions under which the National Bank of Egypt would issue new Dollar Certificates of Deposits (“CDs”).[1] The Decision stated that the new CDs would be issued under the following terms and conditions:
  1. Subscription to be in US Dollars.
  1. Subscription to be allowed only to Egyptian nationals and from their accounts held outside Egypt.
  1. The CDs to be subject to all the terms and conditions stated in Law No. 8 of 1965 concerning the National Bank of Egypt Certificates of Deposits.
  1. Each CD is to be in one-hundred-dollar denomination or multiples thereof.
  1. The CD is due for payment after three years.
  1. Annual return equal to 4% and due every six months.
  1. The CD is nominal and may not be sold or used as security, but may be redeemed after six months from its issuance.
Conclusion
In spite of the fact that the new CD responds to an obvious economic need, which is to encourage Egyptians to invest their dollar deposits held abroad in an instrument held by the National Bank of Egypt, limiting subscription therein to Egyptians alone, and moreover to funds they hold abroad, does not represent a modern legislative and regulatory approach nor international best practice which no longer distinguishes between nationals of the same country depending on their locations. Moreover, preventing investors from selling or taking security over the CDs is an unnecessary limitation.   [1] Minister of Finance’s Decision No. 250/2012 on the terms and conditions under which the National Bank of Egypt would issue new Dollar Certificates of Deposits, Egyptian Gazette, Issue No. 114 (bis), 19 May 2012.
On 19 May 2012, the Minister of Finance issued decision No. 250 of 2012 (the “Decision”) concerning the terms and conditions under which the National Bank of Egypt would issue new Dollar Certificates of Deposits (“CDs”).[1] The Decision stated that the new CDs would be issued under the following terms and conditions:
  1. Subscription to be in US Dollars.
  1. Subscription to be allowed only to Egyptian nationals and from their accounts held outside Egypt.
  1. The CDs to be subject to all the terms and conditions stated in Law No. 8 of 1965 concerning the National Bank of Egypt Certificates of Deposits.
  1. Each CD is to be in one-hundred-dollar denomination or multiples thereof.
  1. The CD is due for payment after three years.
  1. Annual return equal to 4% and due every six months.
  1. The CD is nominal and may not be sold or used as security, but may be redeemed after six months from its issuance.
Conclusion
In spite of the fact that the new CD responds to an obvious economic need, which is to encourage Egyptians to invest their dollar deposits held abroad in an instrument held by the National Bank of Egypt, limiting subscription therein to Egyptians alone, and moreover to funds they hold abroad, does not represent a modern legislative and regulatory approach nor international best practice which no longer distinguishes between nationals of the same country depending on their locations. Moreover, preventing investors from selling or taking security over the CDs is an unnecessary limitation.   [1] Minister of Finance’s Decision No. 250/2012 on the terms and conditions under which the National Bank of Egypt would issue new Dollar Certificates of Deposits, Egyptian Gazette, Issue No. 114 (bis), 19 May 2012.