The first Law Update of 2024 is here, and our first focus of the year spotlights Healthcare and Lifesciences, a sector that is undergoing significant growth and development across the MENA region.
Our focus provides an insight into some of the most important regulatory updates across the region, such as the UAE’s groundbreaking law on the use of human genome, Kuwait’s resolution on nuclear and radioactive materials, the new regulations for healthcare services in Qatar, Egypt’s healthcare regulatory framework, and the impact of the Saudi Civil Transactions Law on the healthcare and life sciences sector … and there is so much more!
Beyond the healthcare pages our lawyers share with you multi-sector insights where you will discover articles on Dubai’s DIFC regulatory framework for startups, Bahrain’s commercial agencies law, and we also shed light on Kuwaiti civil code and the advantages of setting up a joint stock company in Saudi Arabia.Read the full edition
On the 12th of July 2023, the Central Bank of Egypt (“CBE”) issued a new circular regulating the licensing and regulatory framework of Digital Banks in the Arab Republic of Egypt.
This new regulatory framework aims to regulate the licensing and registration requirements and procedures for Digital Banks, as well as, the regulations that govern the revocation of licenses, and the partial and total suspension of operations of Digital Banks.
Pursuant to the applicable regulatory and supervisory rules on Digital Banks, it is prohibited for any entity not registered in accordance with said regulations to use the words “Digital Bank” or any similar expression, in any language, whether in its own title, commercial name, or in its advertisement.
Digital Banks are defined as any bank or branch of a foreign bank which provides banking services through digital channels or platforms using modern technological techniques. Digital Banks are obliged to operate and abide by the provisions of the Law No. 194 of 2020 (“Banking Law”) and its regulations issued by the CBE except with regard to the provisions regulating the granting of credit facilities to large corporations which has been detailed under clause (3) of the Circular.
It is worth noting that, Digital Banks taking the form of an Egyptian joint stock company are prohibited from establishing branches without having established the central office for the bank. Furthermore, Digital Banks are allowed to use banking agents, having obtained the CBE’s prior approval.
Some of the major requirements for the licensing of Digital Banks include:
All rules and regulatory instructions issued by the CBE for banks operating in Egypt shall apply to Digital Banks, as well as the following:
1. The maximum deposit of a single client and its related parties must not exceed 1% of the total credit portfolios, with a maximum amount of EGP 200,000 (Two Hundred Thousand Egyptian Pounds).
2. Digital Banks are prohibited from granting credit facilities to large corporations, except in the following cases:
Note: The two aforementioned percentages shall not apply during the first year of practicing the activity.
3. Digital Banks must abide by and comply with all instructions and rules issued by the Anti-Money Laundering and Terrorism Financing Unit.
The newly issued Decree happens to encompass all regulatory requirements and rules that touch on the amendments, revocations, and termination of Digital Banks and their licenses. It is to be highlighted that the CBE has the utmost discretion to prohibit and reject banks on the basis of them conflicting with the greater economic interest and good of the state.