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Thursday, 20 July 2017

Proposed amendments to the CBE and banking acts could enshrine term limits for MDs

Proposed amendments to the CBE and banking acts could reinstate term limits for bank MDs: Amendments to the CBE Act and the Banking Law will enshrine into law the CBE’s decree limiting the terms of banking sector managing directors to nine years which was issued in March of last year, according to statements attributed to an official reportedly involved in drafting the bill by Al Borsa. The source said that the term limits decree had been scrapped by court order as it had no legal basis with which to stand, something the new draft bill will seek to rectify. The Administrative Court ruled back in June of last year that the CBE Governor’s decision to limit terms violates the rights of bank executives to employment and also refused the retroactive application of the decision. The ruling followed a lawsuit filed by banking executives to scrap the highly unpopular decree, which was met by an uproar from the sector when it was first issued.

Leaked content from the proposed amendments are not final, a source told Al Masry Al Youm. The source said the proposed amendments have been passed to the Federation of Egyptian Banks and to legal experts to get their opinions.

The source also denied claims by Hona Al Asema host Lamees El Hadidi on Tuesday that the CBE governor is looking to expand his position’s authority and overreach into the jurisdictions of the president, prime minister, or bank shareholders. Amending the banking laws aims to accommodate developments in banking and finance and ensure adequate corporate governance measures are in place, the source explained.

“Don’t judge the law by its first draft,” Prime Minister Sherif Ismail urged during a Wednesday press conference, where he advised calm, especially since the cabinet has yet to receive the legislation for review, Al Shorouk says.

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