Egypt’s central bank details framework for banks’ ‘points of presence’
Egypt’s central bank has detailed in a release the new regulations that enable banks to set up mobile, fixed branches, or pop-ups, in an effort to widen access to financial services nationwide, particularly in rural and underserved areas.
The guidelines, approved by the Central Bank of Egypt’s (CBE) board on Aug. 27 and released Sept. 1, stipulated that lenders are allowed to establish “points of presence (PoPs)” without meeting the capital requirements usually applied to traditional branches.
According to the CBE’s latest circular, the rules set out three types of units: mobile branches, fixed community outlets and temporary pop-up sites.
Mobile branches will include buses, vans or other vehicles equipped to handle basic transactions.
Fixed units, described as community branches, will operate from small kiosks, youth centres, agricultural associations or retail spaces no larger than 100 square metres.
Both mobile and community branches will allow customers to deposit or withdraw cash through ATMs, apply for services such as account openings, loans, cards and digital payments, update customer data, and receive their cards. They will also receive customer complaints as well as serve as hubs for financial literacy campaigns, digital banking awareness programmes, and advisory services for small, medium-sized business and enterpreneurs. In addition, the branches will perform the marketing and promotion of bank products.
Temporary units, or community pop-ups, will be deployed for up to three months at a time, focusing on financial education and limited services such as account opening, card issuance, customer data updates, and digital financial services. They will also provide advisory services for entrepreneurs and SMEs. It will also perform the marketing and promotion of bank products. However, they are prohibited from handling cash and must refer customers to nearby ATMs or branches. Extensions for such pop-ups will require prior central bank approval.
Other regulations
The regulations also impose strict operational standards. Banks must prepare annual plans by February the CBE’s Banking Operations Sector, including marketing strategies, for rolling out points of presence. Banks must notify the CBE one month before opening or closing a unit, ensure clear working hours, and staff each site with at least two employees and security.
Each point of presence must display the bank’s branding and comply with know-your-customer and anti-money-laundering rules. Banks are also required to guarantee data protection, put in place internal risk procedures, and report outages or service suspensions immediately.
Additional requirements apply to mobile and fixed outlets, including annual submission of operational plans, compliance with IT and security standards, and payment of a 50,000 Egyptian pound application fee — or the equivalent in US dollars for foreign banks operating in Egypt — for regulatory review. A minimum of six months is set for the duration of work for both fixed and mobile PoPs.
All units must be registered with the central bank, and banks’ databases must be updated to reflect transactions made through them.
The new framework is part of a push by the central bank to boost financial inclusion and reach Egypt’s large unbanked population, while cutting costs for banks compared to traditional full-service branches.
Attribution: Amwal Al Ghad English