May 26, 2024

Two foreign banks get licence from Somalia, the first since 1970

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The Central Bank of Somalia (CBS) based in Mogadishu, Somalia has licenced the first two foreign lenders since 1970. Central Bank Governor Abdirahman Mohamed Abdullahi said Egypt’s Banque Misr and Turkey’s Ziraat Katli can now operate in the country after the Board endorsed their applications.

“CBS Board concluded that the two banks have fulfilled all bank licencing requirements of the CBS, and their applications have been approved,” he said. “After an extensive process, we are happy that the Board has approved the licencing applications of Ziraat Katlim Bank and Banque Misr. “They are both solid banks that will add value to the development of Somalia’s financial sector and contribute to the growth of our economy,” he added.

Image used for illustrative purpose. Getty Images

In the 1960s, foreign commercial banks that operated in Somalia included Italy’s Banco di Napoli and Banco di Roma, Egypt’s Banque de Porte Saide and UK’s National Grindley’s Bank. But, when the Supreme Revolutionary Council (SRC) overthrew the civilian government in October 1969, all foreign banks in Somalia were nationalised under an order of the SRC on May 7, 1970.

The junta then formed the Somali Commercial and Savings Bank, using assets of the nationalised lenders, in 1972 that operated until its collapse in 1988. So far, the Central Bank of Somalia has licensed 13 locally owned commercial banks, among them Salaam Somali Bank and Dahabshil Bank.

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