{"id":594041,"date":"2019-10-17T04:05:03","date_gmt":"2019-10-17T04:05:03","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2019\/10\/17\/lending-by-banks-nbfi-arms-to-count-toward-single-obligor-limits\/"},"modified":"2019-10-17T04:05:03","modified_gmt":"2019-10-17T04:05:03","slug":"lending-by-banks-nbfi-arms-to-count-toward-single-obligor-limits","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2019\/10\/17\/lending-by-banks-nbfi-arms-to-count-toward-single-obligor-limits\/","title":{"rendered":"Lending by banks\u2019 NBFI arms to count toward single obligor limits"},"content":{"rendered":"<p><a class=\"content-anchor\" id=\"tldr-story-02\"><\/a> <b>REGULATION WATCH- CBE issues new regs to reduce bank lending risks: <\/b>Restrictions placed on bank lending to corporate borrowers will now take into account loans made by non-bank affiliates (so-called NBFIs, or non-bank financial institutions). The measures are part of <a href=\"https:\/\/hapijournal.com\/wp-content\/uploads\/2019\/10\/cbe-1.pdf\">new CBE regulations (pdf)<\/a> designed to diversify credit portfolios of commercial banks and reduce concentration risk.<\/p>\n<p><b>What\u2019s this restriction? <\/b><a href=\"https:\/\/almalnews.com\/%D9%85%D8%A7-%D9%87%D9%89-%D8%AA%D9%88%D8%B8%D9%8A%D9%81%D8%A7%D8%AA-%D8%A7%D9%84%D8%A8%D9%86%D9%83-%D9%84%D8%AF%D9%89-%D8%A7%D9%84%D8%B9%D9%85%D9%8A%D9%84-%D8%A7%D9%84%D9%88%D8%A7%D8%AD%D8%AF-%D9%88\/\">Existing rules<\/a> prevent commercial banks from lending more than 15% of their base capital to a single borrower\u2014 what\u2019s called a \u201csingle obligor\u201d limit in the trade. This limit rises to 20% when lending to more than one related party. These rules only apply to commercial banks, and place no new restrictions on the lending activities of their NBFI affiliates.<\/p>\n<p><b>The new rules change this,<\/b> bringing all lenders within the same regulatory framework. All NBFIs affiliated with a commercial bank will have to abide by the same requirements, prohibiting them from lending more than 15% of their capital base to a single client. Insurance companies will not be covered by the new regulations.<\/p>\n<p><b>The new regs are part of a series of reforms to hedge against risk:<\/b> <a href=\"https:\/\/enterprise.press\/stories\/2019\/04\/09\/egypts-banks-need-to-set-aside-additional-capital-for-credit-concentration-risks-2\/\">CBE guidelines issued in March<\/a> require commercial banks to set aside additional capital above the base requirement. The proposed <a href=\"https:\/\/enterprise.press\/stories\/2019\/10\/03\/egypts-cabinet-approves-new-banking-and-central-bank-act\/\">Banking Act<\/a> would also see banks face new minimum capital requirements, which would rise to EGP 5 bn, up from EGP 500 mn currently. Earlier changes addressed capital adequacy ratios and effective limits on personal borrowing.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>REGULATION WATCH- CBE issues new regs to reduce bank lending risks: Restrictions placed on bank lending to corporate borrowers will now take into account loans made by non-bank affiliates (so-called NBFIs, or non-bank financial institutions). The measures are part of new CBE regulations (pdf) designed to diversify credit portfolios of commercial banks and reduce concentration [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":594042,"comment_status":"closed","ping_status":"open","sticky":false,"template":"single-feature.php","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8572],"tags":[204,5066,271,72,180,343,2380],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-594041","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-speed-round","tag-banking","tag-banking-and-central-bank-act","tag-central-bank-of-egypt","tag-enterpriseam","tag-legislation","tag-regulation","tag-speed-round","wpautop","entry"],"acf":{"mongo_id":"30b0da56-1236-4bd1-aed0-0ccd2731b057","is_powered_by":true,"section_story_id":"77d91131-26a9-49d3-9ddf-29ade494f3c0","story_type":"1","photo_url":"https:\/\/ent.news\/2018\/11\/1115.jpg","photo_position":"above","related_issue":[594034],"teaser":"","voice_url":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.1 (Yoast SEO v27.1.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Lending by banks\u2019 NBFI arms to count toward single obligor limits - EnterpriseAM Egypt<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterpriseam.com\/egypt\/2019\/10\/17\/lending-by-banks-nbfi-arms-to-count-toward-single-obligor-limits\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Lending by banks\u2019 NBFI arms to count toward single obligor limits\" \/>\n<meta property=\"og:description\" content=\"REGULATION WATCH- CBE issues new regs to reduce bank lending risks: Restrictions placed on bank lending to corporate borrowers will now take into account loans made by non-bank affiliates (so-called NBFIs, or non-bank financial institutions). The measures are part of new CBE regulations (pdf) designed to diversify credit portfolios of commercial banks and reduce concentration [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterpriseam.com\/egypt\/2019\/10\/17\/lending-by-banks-nbfi-arms-to-count-toward-single-obligor-limits\/\" \/>\n<meta property=\"og:site_name\" content=\"EnterpriseAM Egypt\" \/>\n<meta property=\"article:published_time\" content=\"2019-10-17T04:05:03+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/i0.wp.com\/ent.news\/2018\/11\/1115.jpg?fit=%2C&ssl=1\" \/>\n<meta name=\"author\" content=\"enterpriseam admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"enterpriseam admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2019\/10\/17\/lending-by-banks-nbfi-arms-to-count-toward-single-obligor-limits\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2019\/10\/17\/lending-by-banks-nbfi-arms-to-count-toward-single-obligor-limits\/\"},\"author\":{\"name\":\"enterpriseam admin\",\"@id\":\"https:\/\/enterpriseam.com\/egypt\/#\/schema\/person\/ca597032db7e4db868359c123cec256d\"},\"headline\":\"Lending by banks\u2019 NBFI arms to count toward single obligor limits\",\"datePublished\":\"2019-10-17T04:05:03+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2019\/10\/17\/lending-by-banks-nbfi-arms-to-count-toward-single-obligor-limits\/\"},\"wordCount\":249,\"publisher\":{\"@id\":\"https:\/\/enterpriseam.com\/egypt\/#organization\"},\"image\":{\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2019\/10\/17\/lending-by-banks-nbfi-arms-to-count-toward-single-obligor-limits\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/i0.wp.com\/ent.news\/2018\/11\/1115.jpg?fit=%2C&ssl=1\",\"keywords\":[\"banking\",\"Banking and Central Bank Act\",\"Central Bank of Egypt\",\"EnterpriseAM\",\"legislation\",\"regulation\",\"SPEED ROUND\"],\"articleSection\":[\"Speed Round\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2019\/10\/17\/lending-by-banks-nbfi-arms-to-count-toward-single-obligor-limits\/\",\"url\":\"https:\/\/enterpriseam.com\/egypt\/2019\/10\/17\/lending-by-banks-nbfi-arms-to-count-toward-single-obligor-limits\/\",\"name\":\"Lending by banks\u2019 NBFI arms to count toward single obligor limits - 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Under the new rules, banks will need to obtain a\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/internal\/536550.png?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":559964,"url":"https:\/\/enterpriseam.com\/egypt\/2021\/02\/10\/no-self-dealing-in-the-ins-industry-fra-says\/","url_meta":{"origin":594041,"position":1},"title":"No self-dealing in the ins. industry, FRA says","author":"enterpriseam admin","date":"10 February 2021","format":false,"excerpt":"Major shareholders of ins. companies can\u2019t also be major clients: Property and liability ins. companies will be restricted in how much business they can do with their principal shareholders under a recent decision from the Financial Regulatory Authority (FRA). Shareholders will now only be able to account for 10% of\u2026","rel":"","context":"In &quot;REGULATION WATCH&quot;","block_context":{"text":"REGULATION WATCH","link":"https:\/\/enterpriseam.com\/egypt\/category\/regulation-watch\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/internal\/536550.png?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":569246,"url":"https:\/\/enterpriseam.com\/egypt\/2020\/02\/18\/mortgages-in-egypt-can-now-make-up-10-of-commercial-bank-portfolios\/","url_meta":{"origin":594041,"position":2},"title":"Mortgages in Egypt can now make up 10% of commercial bank portfolios","author":"enterpriseam admin","date":"18 February 2020","format":false,"excerpt":"REGULATION WATCH- Central bank raises ceiling on mortgages as a percentage of bank loan books: Mortgages can now make up 10% of commercial banks\u2019 lending portfolios, up from 5% previously, according to a circular issued by the Central Bank of Egypt (CBE) earlier this week. The change comes as the\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/internal\/536550.png?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":594021,"url":"https:\/\/enterpriseam.com\/egypt\/2019\/10\/16\/cbe-rolls-out-new-regs-for-banks-lending-to-microfinance-players\/","url_meta":{"origin":594041,"position":3},"title":"CBE rolls out new regs for banks lending to microfinance players","author":"enterpriseam admin","date":"16 October 2019","format":false,"excerpt":"The Central Bank of Egypt (CBE) has rolled out four new regulations for banks looking to provide funding for companies and NGOs focused on microfinance, Al Mal reported. Banks will now have to update IScore, in addition to the CBE, on their credit limits on a monthly basis, and ensure\u2026","rel":"","context":"In &quot;Banking + Finance&quot;","block_context":{"text":"Banking + Finance","link":"https:\/\/enterpriseam.com\/egypt\/category\/banking-finance\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/internal\/536550.png?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":574000,"url":"https:\/\/enterpriseam.com\/egypt\/2020\/08\/26\/pundits-call-on-central-bank-of-egypt-to-renew-debt-payment-holiday\/","url_meta":{"origin":594041,"position":4},"title":"Pundits call on Central Bank of Egypt to renew debt payment holiday","author":"enterpriseam admin","date":"26 August 2020","format":false,"excerpt":"Pundits call on CBE to renew debt payment holiday: Banking experts polled by Mubasher have come out in support of the Central Bank of Egypt (CBE) extending the six-month pause on interest payments to commercial banks that is set to expire next month. Banking expert Khaled El Shafei and Alraya\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2020\/8\/206.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":591559,"url":"https:\/\/enterpriseam.com\/egypt\/2019\/12\/10\/cbe-to-compensate-bank-lending-under-egp-150-bn-industrial-mortgage-programs\/","url_meta":{"origin":594041,"position":5},"title":"CBE to compensate bank lending under EGP 150 bn industrial, mortgage programs","author":"enterpriseam admin","date":"10 December 2019","format":false,"excerpt":"CBE breaks down how it will compensate bank lending under EGP 150 bn industrial, mortgage programs: The Central Bank of Egypt (CBE) will ensure banks have at least 200 bps of margin when they loan out to factories and homebuyers under the two subsidized lending initiatives it recently launched with\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2020\/3\/92.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]}],"_links":{"self":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/posts\/594041","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/comments?post=594041"}],"version-history":[{"count":0,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/posts\/594041\/revisions"}],"acf:post":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/issue\/594034"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/media\/594042"}],"wp:attachment":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/media?parent=594041"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/categories?post=594041"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/tags?post=594041"},{"taxonomy":"brand","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/brand?post=594041"},{"taxonomy":"newspack_spnsrs_tax","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/newspack_spnsrs_tax?post=594041"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}