The Central Bank of Egypt has issued a directive barring banks from providing credit facilities for company formation, capital increases, or dividend distributions.
The Central Bank of Egypt issued the directive in a circular on Sunday. It instructs banks not to grant credit facilities to finance the capital of companies under incorporation, fund capital increases, or support cash dividend distributions and employee share award programmes.
The measure reaffirms earlier regulations and seeks to strengthen oversight of lending. It aims to direct financing toward economic and productive activities in line with banking rules.
The decision draws on a circular from 24 March 2003 that banned short-term facilities for company incorporation capital or the required 25 percent paid-up contribution. It also references a 20 September 2021 circular that prohibited credit facilities for cash dividends to shareholders or employees.