LIBYA: Government to allow foreigners to open joint-venture banks with local investors

Record ID: 560280

  • Title: LIBYA: Government to allow foreigners to open joint-venture banks with local investors
  • Date: 26th February 2010
  • Summary: TRIPOLI, LIBYA (FEBRUARY 24, 2010) (REUTERS) VARIOUS EXTERIOR OF CENTRAL BANK OF LIBYA TRIPOLI, LIBYA (FEBRUARY 22, 2010) (REUTERS) VARIOUS OF PEOPLE ATTENDING TRAINING COURSE ORGANISED BY CENTRAL BANK TO UPGRADE SERVICES IN LOCAL BANKS DEPUTY CENTRAL BANK GOVERNOR MOHAMED SHUKRI DURING TRAINING COURSE (SOUNDBITE) (Arabic) DEPUTY CENTRAL BANK GOVERNOR, MOHAMED SHUKRI, SAYING: "This means the Libyan banking market will be strengthened by international banking practices and will be enhanced by experiences gained from the other world, which will enable us to develop the workflow within the Libyan banking sector and apply new methods for accounting, administration and banking." LIBYAN BANKERS ATTENDING TRAINING COURSE FOR IMPROVING SERVICES IN LOCAL BANKS TRIPOLI, LIBYA (FEBRUARY 24, 2010) (REUTERS) EXTERIOR OF EL-GOUMHOURIYA (THE REPUBLIC) BANK VARIOUS OF PEOPLE INSIDE EL-GOUMHOURIYA BANK GENERAL DIRECTOR OF EL-GOUMHOURIYA BANK, ABDUL FATTAH GAFAR, WORKING ON COMPUTER (SOUNDBITE) (Arabic) GENERAL DIRECTOR OF EL-GOUMHOURIYA (THE REPUBLIC) BANK, ABDUL FATTAH GAFAR, SAYING: "Having a competitor, particularly a foreign one, I can frankly say has created a challenge for us and has given us a strong desire to be strong and prove to the world that we have the potential, we have the youth and the brains, all we need is the opportunity to present itself." EXTERIOR OF NATIONAL COMMERCIAL BANK VARIOUS OF EMPLOYEE USING MONEY COUNTING MACHINE CUSTOMERS AT BANK TELLER WINDOW BANK TELLERS BEHIND WINDOW VARIOUS OF BANK EMPLOYEES AT WORK
  • Embargoed: 13th March 2010 12:00
  • Keywords:
  • Topics: Finance,Domestic Politics
  • Reuters ID: LVA88JL7F52UFBBOLRZ7JQIT5VDG
  • Story Text: The Libyan government has announced foreigners would be allowed to open joint-venture banks with local investors for the first time in 40 years.
    The central bank has set March 30 as the deadline to receive applications from would-be bidders, the official news agency quoted the central bank as saying, by which time the central bank aims to issue two licenses to start new banks.
    Foreign partners will hold 49 percent stakes and have full management, while local investors would maintain control of the remaining 51 percent.
    Libya nationalised all privately owned banks, whether owned by foreigners or locals, early in 1970 after Libyan leader Muammar Gaddafi took over in a bloodless military coup.
    OPEC member Libya, home to Africa's largest proven oil reserves, has been gingerly moving to open its archaic banking system to foreign investors since emerging from international isolation over the past seven years.
    The government is struggling to reform the highly centralised banking system, which is widely seen as a major obstacle to economic growth, and to lure more private investment outside the oil and gas industry.
    "This means the Libyan banking market will be strengthened by international banking practices and will be enhanced by experiences gained from the other world, which will enable us to develop the workflow within the Libyan banking sector and apply new methods for accounting, administration and banking," said Mohamed Shukri, deputy central bank governor.
    The Libyan government has sold 19 percent stakes in two banks to two foreign banks in 2007 and 2008, and government officials said they wanted to assess what benefits the country's banking system would gain from these sales before deciding whether to go further.
    The central bank's statement said the foreign banks investing in the two new banks must have a good investment rating from at least one of the main rating agencies, capital of least USD$2 billion and "a good international presence".
    The Libyan central bank did not specify whether the local investor must be a bank.
    "Having a competitor, particularly a foreign one, I can frankly say has created a challenge for us and has given us a strong desire to be strong and prove to the world that we have the potential, we have the youth and the brains, all we need is the opportunity to present itself," said Abdul Fattah Gafar, general director of El-Goumhouriya (The Republic) Bank.
    Libya has a total of 19 banks, including four devoted to specific banking services, such as Rural Bank, which focuses on micro credits, and the Savings and Real Estate Investment Bank specialising in banking services for real estate and housing, Libyan bankers say.
    Last May, when the new regulations were made public, government officials said they planned to give licences in 2010 for foreign banks to launch operations, either alone or in partnership with Libyan investors.
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