I wrote – Afaf Ammar:
Posted on: Saturday 3 September 2022 – 5:39 PM | Last update: Saturday 3 September 2022 – 5:39 PM
Ali Al-Hariri, head of the Coordinating Council of Exchange Companies in the General Federation of Chambers of Commerce, said that the council intends to address the Central Bank, led by Hassan Abdullah, to demand a legislative amendment to the new banking law regarding the minimum capital of exchange companies.
The deadline for reconciling the conditions granted by the Central Bank to exchange companies regarding the increase of the minimum limit of their capital to 25 million pounds, which was approved by the new Central Bank law, instead of 5 million pounds in the previous law, ends on September 15.
According to Hariri’s statements, the money exchange market includes 38 companies, most of which do not have the ability to increase the minimum amount of their capital to 25 million pounds, as the exchange activity is linked to the movement of tourism, and therefore revenues have declined very much and are not commensurate with the required increase in capital.
He continued: The Coordinating Council will submit a proposal to the Central Bank that includes reducing the minimum capital of exchangers to 10 million pounds instead of 25 million pounds, as the new law stipulates, or allowing exchange companies to engage in money transfer activity, which requires a legislative amendment. The new law obligated the exchange companies to take up an Egyptian joint stock company and to have the sole purpose of practicing exchange operations.
The Coordination Council for Exchanges includes about four representatives, and it was established temporarily at the beginning of this year after the number of companies operating in the market decreased to 38 companies, compared to more than 111 companies that were working in the past before it was closed due to violations and manipulation in the currency market, and Hariri said that the council will work temporarily. Until the election of a new exchange division affiliated to the Federation of Chambers of Commerce.
Three companies control the exchange market in Egypt, led by Al-Ahly Exchange, with 59 branches, a paid-up capital of 400 million pounds and owned by the National Bank of Egypt, and the Misr Exchange Company, owned by Banque Misr, which owns about 50 branches with a paid-in capital of 200 million pounds, and the Egyptian Exchange Company affiliated to the Mazlawy Group.
And the Central Bank of Egypt decided, last year, to extend the deadline for reconciling the conditions of banks and exchange companies regarding the increase in the minimum capital for a period of one year ending in September 2022, as the Central Bank and the new banking system law issued in September 2020 stipulated raising the paid capital of exchange companies and money transfer companies to 25 million pounds as a minimum compared to 5 million pounds previously.