President Morsy will issue a declaration in a few days to amend 2 articles of the presidential decree number 64 for 2004 governing the Central Bank of Egypt, according to state-owned Al-Ahram.
The cabinet has already approved the modification to the law that was issued by the Supreme Council of Armed Forces (SCAF) last year.
In 2011, SCAF has modified law number 88 of 2003 to be in line with the banking law. The amendment put rules to prevent a conflict of interest with the bank’s board members and to guarantee their independence and integrity according to international norms and practices.
The decree stipulated “no board member should have any interests conflicting with their duties, integrity requirements, independence or the confidentiality of information they acquire as members of the central bank’s board, they should not be the heads, members, employees or consultants at commercial banks or financial groups.”
The amendment reduced the bank’s board members from fifteen to nine, consisting of; the governors, two deputies, the head of Egyptian Financial Supervisory Authority (EFSA), a representative of the minister of finance and four experts fulfilling the aforementioned integrity conditions.
This led to the exit of the Tarek Amer, Chairman of the National Bank of Egypt, Mohamed Barakat, Chairman of Banque Misr Abdel-Salam El-Anwar, former Chairman HSBC Egypt, Hassan Abdallah, the managing director of Arab African International Bank, Hazem Hassan the prominent accountant and auditor, Muna Zulfikkar the legal expert and the board member of EFG Hermes Investment Bank, Alaa Sabaa the economic expert and Ziad Bahaa Eldin the former head of EFSA.
The number of experts was reduced by half; representatives for the ministers of planning and foreign commerce were dismissed, leaving only a representative for the finance minister.
The law says in case of absence or incapacity of the governor, he shall be replaced by the older deputy, who, in case of absence, is replaced by the second deputy.
The project law that will be announced soon, modifies articles 18 and 19 of the presidential decree 64 to be as follows;
Article 18: “the bank board shall be formed by the chairmanship of the governor and the membership of the two deputy governors, the head of the financial supervisory authority, a representative of the minister of finance nominated by the minister, and four members with experience in financial, monetary, banking, legal or economic issues, appointed by the president for a four-year renewable term”.
Article 19: “the governor and the board members should be Egyptian and of Egyptian parents, free to practice their political and civil rights, of good reputation and never convicted of a felony or a crime involving moral turpitude, with no interests that could interfere with his duties or his neutrality in the discussions and decision-making process, and must be experienced in the field of banking and economics.
The modification also gives the president the right to unilaterally nominate the next CBE governor, and the four experts in monetary, financial, banking, legal or economic affairs.
The new text doesn’t specify who will choose the two vice-governors; it doesn’t clearly stipulate the governor’s authority to appoint any number of deputies, as in the previous law.