AmendmentTrade

Foreign Exchange Surrender Requirements of Banks (as Amended) (Directive No. 829/2021)

National Bank Of Ethiopia829/2021

Summary

This directive amends the foreign exchange surrender requirements for banks, mandating them to surrender 50% of specific foreign exchange receipts to the National Bank of Ethiopia monthly and report their foreign exchange cash flow weekly. It also outlines penalties for non-compliance and repeals a previous directive.

Who's affected

Banks licensed by the National Bank of Ethiopia, excluding the Development Bank of Ethiopia.

Action required

Banks must surrender 50% of eligible foreign exchange receipts to the National Bank of Ethiopia by the fifth working day of each month and submit weekly foreign exchange cash flow reports.

Key points

5
  • Banks must surrender 50% of specific foreign exchange receipts monthly.
  • Weekly reporting of foreign exchange cash flow is required.
  • Penalties include daily fines and liability under proclamation No. 591/2008.
    • Show 2 more
    • Directive No. 59/2020 is repealed and replaced.
    • The directive is effective from September 01, 2021.

Requirements

3
  • Banks shall surrender 50% of receipts from export of goods, services, private transfers (remittance), and NGO's transfers to the National Bank of Ethiopia every month within the first five working days of the next month.
  • Banks shall report its foreign exchange cash flow signed by its President to the National Bank of Ethiopia every week as per the format provided.
  • Banks are required to send a foreign exchange surrender report to the National Bank of Ethiopia every month within the first five working days of the next month.

Rights and permissions

1
  • The National Bank of Ethiopia shall credit the payment and settlement account of the bank with equivalent amount in Birr at the prevailing mid exchange rate.

Restrictions

2
  • Banks must surrender only receipts from export of goods, services, private transfers (remittance) and NGO’s transfers.
  • There is a daily fine for delayed surrender up to a maximum of five working days.

Penalties

2
  • A bank failing to surrender the foreign currency as required shall be subjected to a fine of USD 10,000 for each day of delayed surrender up to a maximum of five working days following the final day of surrender.
  • Failure to comply with or obstruction of these directives shall be liable under Article 26 sub-article 2 of the National Bank of Ethiopia Establishment (as amended) Proclamation No.591/2008.

Objectives

2
  • To set foreign exchange exposure limits and foreign exchange surrender requirements on Banks.
  • To achieve the safe and stable foreign exchange market in Ethiopia.

Organizations

2
  • National Bank of Ethiopia
  • Development Bank of Ethiopia

Legal references

2
  • National Bank of Ethiopia Establishment (as Amended) Proclamation No. 591/2008, Articles 5(9) and 27(2)
  • Article 26 sub-article 2 of the National Bank of Ethiopia Establishment (as amended) Proclamation No.591/2008
Original sourcehttps://justice.gov.et/en/directives/foreign-exchange-surrender-requirements-of-banks-as-amended-directive-no-829-2021/
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