Central Bank obliges banks increasing capital to 10 bln AD
Saturday Dec 27 2008.
The Council of Credit and Money at Algeria’s Central Bank has issued a new law obliging foreign banks operating in the Algerian financial market to raise their capital up to 10 billions AD, rather than the current amount fixed at 2.5 billions AD.
So the Central Bank has decided increasing by 4 times the minimum capital of foreign banks operating in Algeria, while reaching $141 millions, noting this sum used to be $35.4 millions. This procedure is as a result of excess of liquidity within state-owned banks, as well as other measures enhancing loans granted for important projects, as like the ones engaged by the 2 state-owned companies Sonatrach and Sonelgaz. This situation requires huge financial resources, and respect of loan granting risk rates into force in banks.
A communiqué released by the Central Bank, mentioned that the latter has adopted a new law obliging banks and financial institutions to increase their capital up to 10 billions AD, while the minimum amount required to the financial institutions is 3.5 billions AD, rather than 500 millions AD. The central Bank has granted a 12 months deadline to the banks to comply with the recently issued procedures.
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