Central Bank Rules Out Operations for Zones
The Central Bank has issued a set of regulations that prohibit banks and financial institutions operating in the country’s free trade zones from engaging in certain activities, citing concerns over stability and risk management.
Prohibited Activities
According to Article 27 of the new regulations:
- Banking units in the zones are not entitled to perform operations such as buying and selling goods in their own accounts for trading purposes, unless they comply with the Non-Usury Banking Operations Law or meet their internal needs.
- They are also banned from engaging in real estate transactions exceeding quotas set by the Central Bank.
- Banks and financial institutions operating in the zones are prohibited from buying shares of companies or purchasing securities exceeding the quota set by the Central Bank.
- Additionally, they are not allowed to grant credit facilities to their managing directors and board members, as well as companies in which these individuals hold interests, unless they comply with the quota.
Supervision Measures
The regulations outline strict supervision measures for banking units operating in the zones:
- All banks and financial institutions operating in the zones must operate under the supervision of the Central Bank.
- They are required to provide the Central Bank with required information on a regular basis.
Capital Requirements
Banking units in the zones must maintain a minimum capital level and replenish it if it declines below the minimum amount set by the Central Bank.
Responsibility for Losses
The Managing Director and members of the Board of Directors of each bank or financial institution operating in the zone will be held responsible for losses caused by their operations. They are obligated to indemnify customers.
Clearing House
The regulations provide for the establishment of a Clearing House to facilitate the exchange of checks and bank shares, with operational expenses borne by the banking units.
Dispute Resolution
Disputes related to securities, documents, and books, as well as the settlement of disputes, dissolution, and bankruptcy of banking units operating in the zones, will be handled in accordance with the provisions of the Monetary and Banking Law.
The new regulations aim to ensure stability and prevent risks in the country’s financial system, particularly in the free trade zones. The Central Bank has also been tasked with developing instruction guidelines for the implementation of these regulations.