Somaliland to pass central bank law within 3 weeks: cbank

[Xaaji Xunjuf]

Somaliland to pass central bank law within 3 weeks: cbank

Thu Feb 2, 2012 1:51

 

By Mark Anderson

 

HARGEISA (Reuters) - Somaliland's central bank governor said on Thursday parliament is expected to pass a law within three weeks that will formerly establish a central bank, paving the way for foreign commercial banks to start operating in the self-declared country by 2013.

 

Somaliland, a breakaway state in the northeast of Somalia, remains unrecognised internationally. It has no formal banking sector and its people rely heavily on remittances from diaspora communities in Europe, North America and the United Arab Emirates, as there are no ATMs or loan facilities.

 

"We expect to finalise the (Central Bank) act within a maximum of three weeks," Abdi Dirir Abdi told Reuters in an interview in the Somaliland capital of Hargeisa.

 

The act was brought before parliament in November 2011.

 

"The Commercial Banking Act will follow in the next six to 12 months," he said. That legislation will allow foreign commercial banks to be set up in Somaliland and offer credit and cash withdrawal facilities.

 

Somaliland declared independence from Somalia in 1991 and has enjoyed relative stability compared to the rest of Somalia.

 

Several foreign lenders have expressed interest in operating in Somaliland where they are keen to capitalise on its untapped market potential.

 

"We are still awaiting the regulation. Once it is passed we will open a head office in Hargeisa and branches in five cities in Somaliland. We are ready to open immediately," said Saad Djama, a representative of Djibouti-based Banque pour le Commerce et l'Industrie-Mer Rouge in Hargeisa.

 

"This is a good market. The business in Somaliland is free, the rate of taxation is also very cheap," Djama said, referring to limited government interference in the business sector.

 

Djama said his bank currently catered to about 60 customers, mostly companies and non-governmental organisations. He hoped that number would rise to 1,000, once full branches are opened.

 

Yemeni state-owned bank CAC, Djibouti-based Salaam African Bank, and Banque de Depot de Credit Djibouti, a subsidiary of Switzerland-headquartered Swiss Financial Investments, have all approached Abdi about commencing operations in Somaliland.

 

"I think (the presence of foreign banks) will enhance our mobile banking system. But banks will bring in cash machines (ATMs) also," Abdi said.

 

"We are eager to issue licences to commercial banks so that the economy will pick up, because people will have access to credit."

 

http://af.reuters.com/article/investingNews/idAFJOE81107Z20120202?sp=true

[Carafaat]

well done. Indeed, in order to have banks you first need a central bank that keeps an eye on people's money and these banks and that is based on rules/laws. Some folks really thaught you can issue licenses to foreign banks before having a central bank law and department to monitor and control banks.

[Jacaylbaro]

Looking Forward ....

[Jacaylbaro]

There is currently a heated debate about the law and it is not gona be easy for some.

[Freedom]

Not going to easy for some but needed badly

[Dervish]

I heard it'll be printed in xaaji's basement.

[N.O.R.F]

Hmm, let's wait and see. I just hope experts were consulted and it was not drafted by the UNDP.

[Jacaylbaro]

There is currently a huge mobilization among the Sheikhs and the Arab **** lickers to stop this claiming it is against Shariah ....... There is a lot going on right now ...

[N.O.R.F]

A good time to come dhe

 

The problem I see is a lack of regulations and people losing their money.

[Jacaylbaro]

But don't forget, there are some powerful people who are against any regulations ....

[Carafaat]

Wallahi, if the goverment losses to set-up a proper div of the Central Bank that control's the financial players.

Then Somaliland will definetlyo become private property. This isn't only about safety of people's savings, its also about

Currency control and thus who controls the whole monetary economy.