1 NATIONAL BANK OF ETHIOPIA Bank Supervision Directorate Information Kit (Brochure) 1. Major Objectives of the Directorate: To ensure: 1.1 Safety & soundness of the banking sector; 1.2 Efficiency & compliance of banks with rules & regulations; & 1.3 Protection of depositors’ interest. 2. Types of Service Delivered to Customers: 2.1 Issuance of Banking Business License a) Conditions required to open a blocked subscription bank account: - pre-filing meeting with organizers; - written application for opening a blocked subscription bank account; - curriculum vitae including names, addresses and occupation (including dates and addresses of employment covering the latest 10 years) of organizers; - acceptance on bank’s proposed “name” from Ministry of Trade; - organizers’ bylaws; - last audited financial statements of businesses owned or managed by organizers (if any); - properly signed minutes of organizers’ meeting to establish a bank; and - prospectus for subscribing shares. b) Additional pre-conditions of licensing: - written application for banking business license; - properly completed application form attached; - other accompanying documents including: o list of shareholders in prescribed format; o authenticated ownership certificate and/or lease agreement for building, land, vault, equipment and fixture; o feasibility study of the future operations and development of the business for minimum period of three years from the date of commencement of operations; o description of actual purchases made or proposed purchases of goods and services, or lease of real estate by the bank from related parties; o proposed memorandum & articles of association; o name and nationality of influential shareholders, and number and value of shares they hold; 2 o name, age and marital status of directors, CEO and SEOs and evidence confirming that they meet qualification of competency; o list of names, nationality, number and value of shares held by those who hold capital of Br.100,000 or more; o evidence for estimated insurance cover for fixed assets acquired or leased; o “propriety” questionnaire completed by directors, CEO and SEOs to assess whether they have honesty, integrity, diligence and good reputation; o “propriety” questionnaire completed by influential shareholders; o evidence for payment of investigation fee of birr 750; o evidence for payment of minimum paid-up capital of birr 500 million in cash; o evidence for valuation of contribution in kind, where applicable; o tax ID number of the licensed bank; o confirmation in writing that no shares are bought using bank loans; o evidence in writing confirming that the board elects are not serving as director or CEO in any other financial institution; o confirmation in writing that influential shareholders have no shares in any other bank; o renewed business license, if shareholders are businesses; and o evidence for payment of licensing fee of birr 5,550; - publishing on newspaper a notice of intention to engage in a banking business in prescribed form at least once a week for a period of four consecutive weeks; - premises, security arrangements and cash vault meeting minimum standards; - full payment of 1/4th of subscribed shares; and - ensuring that shareholding is limited to 5 percent of total subscriptions. c) For more information, see NBE website http:/nbe.gov.et, banking business proc. 592/08 & NBE directives SBB/39/06). d) Contact address: - policy and licensing team; - telephone (office): 011 517 51 78. e) Standard time for decision: - within 90 days of receipt of complete application. 2.2 Approval to Commence Operation a) Conditions required: - written application to commence operation; - comprehensive risk management policies and operating manuals put in place; - adequate and appropriate staff hired, trained and placed; - suitable banking hall and staff operating areas; - a strong room with a minimum carrying capacity of 224 cubic meters; - cash loading and unloading area suitable and protected from public view and access; - fire extinguishers placed at appropriate places; 3 - insurance policy purchased at least for fire and other perils, burglary and theft, fidelity, cash and valuables in premises and in transit; - outer doors of the bank building being of heavy duty metal; - all windows and glass walls of the bank building reinforced with metal grills; and - sound information management and internal control systems. b) For more information, see NBE website http:/nbe.gov.et and directives SBB/39/06. c) Contact address: - supervision teams - telephone (office): 011 517 51 38/53 36. d) Standard execution time: - within 10 working days. 2.3 Renewal of License a) Conditions required from customers to get renewal of license: - written application, from July 1 to September 30 only, for renewal of license; - completed form depicting balances of subscribed and paid up capital as at end of June; - tax ID number of the bank; - a copy of evidence for payment of license renewal fee of birr 5,550; and - enclosure of original banking business license. b) For more information, see NBE website http:/nbe.gov.et, directives SBB/39/06, & circular BSD/03/11). c) Contact address: - policy and licensing team; - telephone (office): 011 517 51 78. d) Standard execution time: - within 1 hour of receipt of complete application. 2.4 Approval of Branch License a) Conditions required: - written application for approval with completed form; and - evidence for payment of investigation fee of birr 500. b) For more information, see NBE website http:/nbe.gov.et and directives SBB/40/06. c) Contact address: - policy and licensing team; - telephone (office): 011 517 51 78. d) Standard execution time: - within 1 hour of receipt of complete application. 4 2.5 Approval of Branch Opening a) Conditions required: - written application for approval with completed form 15 days before commencement of operation (applies to relocated branches as well); - minimum requirements including (applies to relocated branches as well): o bank’s relevant policies and procedures and NBE directives and circulars distributed to appropriate staff of the branch, o branch adequately guarded, o working hours, copy of the bank’s license and branch authorization displayed in a visible area of the branch, o banking hall and staff operating area suitable for the type of business to be undertaken in the premises housing the branch, o appropriate strong room or safe/vault, o fire extinguishers placed in appropriate area, o insurance policy at least for fire and other perils, burglary and theft, fidelity, cash and valuables in premises and transit; o outer doors of branch building of heavy duty metal, & o windows and glass walls of branch building reinforced with metal grills; b) For more information, see NBE website http:/nbe.gov.et, directives SBB/40/06, & circular BSD/01/11. c) Contact address: - policy and licensing team; - telephone (office): 011 517 51 78. d) Standard execution time: - within 2 hours of receipt of complete application. 2.6 Approval of Branch Relocation a) Conditions required: - written application for approval along with completed form; - a copy of evidence for payment of investigation fee of birr 500; and - attached original branch authorization. b) For more information, see NBE website http:/nbe.gov.et and circular BSD/02/11. c) Contact address: - policy and licensing team; - telephone (office): 011 517 51 78. d) Standard execution time: - within 3 working days of receipt of complete application. 2.7 Reopening of A Closed Current Account a) Conditions required: 5 - written application for reopening of the account, with a copy to the Federal Police Commission, with a commitment to properly use the account in the future; - suspension for a minimum of 18 months from use of current account, or a guarantee valid for the period from a domestic bank; and - enclosing evidence for full settlement of all dishonored checks & related penalty charges. b) For more information, see NBE website http:/nbe.gov.et and directives SBB/31/02. c) Contact address: - policy and licensing team; - telephone (office): 011 517 51 78. d) Standard execution time: - within 2 working days of receipt of complete application. 2.8 Approval of External Auditor a) Conditions required: - written application for approval of appointed external auditor; and - additional information to be submitted (for approval of original appointment only): o registered name of the auditor, o name, qualification and experience of each partner, o address (location, P.O. Box, telephone no.), o name, qualifications and experience of the manager to be engaged in the audit of the bank, o details of the auditor’s experience in auditing other banking or similar institutions, o details of any existing business relationship between the auditor or his partners and the bank, o copy of the license to practice auditing, including for each partner in the case of firm, o copy of minutes of the general meeting of shareholders approving the appointment of the auditor, and o any other information considered necessary in support of the application. b) For more information, see NBE website http:/nbe.gov.et and directives SBB/19/96. c) Contact address: - policy and licensing team; - telephone (office): 011 517 51 78. d) Standard execution time: - within 1 working day of receipt of complete application. 2.9 Approval of Minutes of Annual General Meeting (AGM) and/or Amended Memorandum and Articles of Association (M&AoA) a) Conditions required: - written application for approval of minutes of AGM and/or amended M&AoA; 6 - minutes of AGM and/or amended M&AoA; and - attendance sheet. b) For more information, see NBE website http:/nbe.gov.et, banking business proc. 592/08 & NBE directives SBB/39/06. c) Contact address: - policy and licensing team; - telephone (office): 011 517 51 78. d) Standard execution time: - within 5 working days of receipt of complete application. 2.10 Approval of Influential Shareholding and/or, Appointment of Replaced Directors, CEO and/or SEOs a) Conditions required: - written application for approval of influential shareholding and/or appointments for replacement; - board minutes evidencing deliberations on all relevant issues; - supporting documents like curriculum vitae, certified credentials, and working experience for directors, CEO, and SEOs; - propriety test questionnaire completed, and last audited financial statements of businesses owned or managed (if any) by would be influential shareholders, directors, CEO and/or SEOs; - number and value of shares held by would be influential shareholders, and written statements declaring source of their funds and they have no shares in other banks; and - written statements evidencing proposed directors are not board members in any financial institution operating in Ethiopia. b) For more information, see NBE website http:/nbe.gov.et and directives SBB/39/06. c) Contact address: - policy and licensing team; - telephone (office): 011 517 51 78. d) Standard execution time: - within 30 working days of receipt of complete application. 2.11 Approval of New Banking Product a) Conditions required: - written application for approval of new products; - submission of full set of study documents including: o target market, o related risks, o risk management process, internal control, MIS, organization, staffing, training, and o `policies and procedures; and - power point presentation, about the new products, to the NBE. 7 b) Contact address: - policy and licensing team; - telephone (office): 011 517 51 78. c) Standard execution time: - within 30 working days of receipt of complete application.
Posted on: Thu, 07 Aug 2014 06:40:55 +0000
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