EGYPT Law and Practice Contributed by: Mahmoud S. Bassiouny, Iman Nassar, Habiba Gamaleldin and Israa Mostafa, Matouk Bassiouny
• abidance with the principle of equal treatment among creditors of the same ranking, without prejudice to considerations of the stability of the banking system. By virtue of a resolution by the CBE board of directors, a fund affiliated to the CBE shall be incorporated with a view to funding the dis - tressed bank resolution procedures. This fund shall have an independent legal personality and budget, and its resources shall comprise banks’ contributions as well as profits associated with its investments. The required funds must be collected within ten years from the date the New Banking Law came into effect. As far as is known, no such fund has yet been established. On 19 December 2022, coinciding with Egypt’s hosting of COP27, the CBE announced that all Egyptian banks had completed assessing the carbon footprints of their head offices. A carbon footprint is an index for measuring greenhouse gases (including carbon dioxide and methane) and other gases causing global warming and climate change. Further, on 21 May 2023, having regard to the Arab Day for Financial Inclusion, which takes place annually on 27 April, the CBE announced a number of sustainable finance initiatives. These include allowing banks to operate outside their branches among different governorates (particu - larly in remote areas), allowing citizens to open bank accounts without a minimum balance or any fees, encouraging customers that opened electronic wallets to activate and use these, as well as undertaking activities that help spread financial awareness. 9. ESG 9.1 ESG Requirements
In the same vein, the CBE issued a recent decree dated 3 November 2022 regulating sustainable finance. Accordingly, it instructed banks to adopt sustainable finance policies within their credit and investment policies and related pro - cedures in light of the CBE directory principles of sustainable finance dated 18 July 2021. These policies and procedures shall be provided to the CBE no later than 1 October 2023. Additionally, the board of directors of banks shall oversee compliance with such policies and procedures and ratify any reports prepared in this respect. Further, banks shall incorporate an independent sustainability and sustainable finance admin - istration affiliated to the chief executive officer (managing director) or their deputy by no lat - er than 1 April 2023 in charge of internal co- ordination amongst the different sectors of the bank. The aforesaid administration shall oversee compliance with the CBE directory principles of sustainable finance. Further, banks shall pre - pare regular reports as further illustrated under the CBE regulations and provide these to the CBE sustainability administration. Moreover, as of July 2023, banks must engage an environ - ment consultant, authorised by the Ministry of Environment, to assess the environmental risks of projects of large companies seeking funding. It must further be noted that the CBE issued a circular on 11 November 2024 stating that bank accounts may now be opened for youth between 15 and 21 years old without requiring parental consent, provided that the banking products offered are suitable for their legal capacity and the associated risks, and that all relevant regula - tions and instructions are adhered to.
182 CHAMBERS.COM
Powered by FlippingBook