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Tuesday, 2 April 2019

New Banking Act will not impose term limits on banks’ managing directors

LEGISLATION WATCH- There are no term limits for bank managing directors in the draft of the amended Banking Act now being reviewed by cabinet, Al Masry Al Youm reports, citing unnamed sources. The story pours cold water on suggestions earlier this week that a recent shakeup in the top ranks of the industry that has seen the resignation of MDs including Bank Audi’s Mohamed Abbas Fayed and National Bank of Kuwait’s Yasser Ismail Hassan foreshadowed the introduction of term limits. Each resigned for his own reasons and not under pressure from the central bank, the newspaper’s sources suggest.

Background: A first draft of the new Banking and Central Bank Act leaked in 2017 and was controversial within the sector for suggesting term limits on bank MDs as well as a tithe on industry profits to finance an industry development fund that would be managed by the central bank. The current draft has been with the Madbouly Cabinet for review since January. It remains unclear what the timeline on the bill could be. Once approved by cabinet, the bill will move to the House of Representatives for committee review and a vote in the general assembly.

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