MoF’s move causes uproar amongst bankers


The Ethiopian Bankers Association (EBA) raise concerns following the latest move by the Ministry of Finance (MoF) which orders public institutions to expel their accounts from private financial firms. Financial experts warn this will cause quakes in the sector.
Recently MoF wrote a letter to public institutions to close their accounts at private banks and repatriate their resources to the coffer at public banks which would be in the Commercial Bank of Ethiopia (CBE), which has so far been assigned by the government financial arm, central bank, to manage public money on its behalf.
Sources told Capital that during its meeting held on Friday, April 15, EBA which includes presidents from private and public banks, had in-depth discussions about the issue and agreed to file its concerns to the relevant government body.
Some described the decision of the government as astonishing with respect to the banking industry and added that they’re afraid that it may erode the confidence of the public.
After Friday’s meeting, a senior banker that Capital asked for comments about the decision generally said that the government has continued through with its socialist ideology as before.
“The main reason to continue on this poor economic growth is the attitude. The government is saying that the private sector is the economic engine for Ethiopia but financial institutions are the heart of the engine. I believe that the government does not totally understand the role of the private sector which will end up creating a paradigm shift for the economy if it does not get proper attention and support from the government,” he expresses his anger, adding, “proper liberalization is a must.”
He said that banks by default are public property rather than a few individuals or groups, “the major stakeholder of the financial industry is not shareholders, clients, staffs or the community but the government first. We pay income tax every year to the government.”
Some other bankers that Capital interviewed about the issue said that the government may have a right to select a financial firm for the budget management but it passed a swift decision that might break the private sector and public’s trust in private banks.
However, some argued that all banks including public banks have similar licenses for a similar business, “but the government is issuing different directives for the private banks and public banks, which raise eyebrows on the right to operate in the country equally.”


Source link

What do you think?

Aggregated by Ethiopian News Digest

Leave a Reply

Your email address will not be published. Required fields are marked *

GIPHY App Key not set. Please check settings

Ethiopians in France Mobilize Financial Support to IDPs in Amhara, Afar Regions –

#NewsAlert: Russian Embassy in Addis Abeba tells Ethiopians it doesn’t accept applications for military recruitment