CBE Pres. Stresses Need to Build Capacity of Domestic Banks by Gradually Opening Up Sector - ENA English
CBE Pres. Stresses Need to Build Capacity of Domestic Banks by Gradually Opening Up Sector
May 28/2022/ENA/ The President of Commercial Bank of Ethiopia stressed the need to exert efforts to build the capacity of domestic Banks operating in Ethiopia by gradually opening up the banking sector to the international competition.
The government has so far closed the banking sector to the international market in order to protect domestic banks from the intensive external competitions.
In an exclusive interview with ENA, President of CBE Abe Sano said it is impossible to build the capacity of local banks in Ethiopia by closing the bank sector to the international market.
He elaborated that keeping the banking service closed would slow down the growth of local banks in the country.
On the contrary, the sudden opening of the banking sector to the international will also diminish the abilities of the local banks, he underlined.
Therefore, it is necessary to gradually open the banking sector to international market so that local banks can develop their capacity and competitiveness, according to Abe.
He said “the capacity of local banks can not be built by closing the market to the international companies, but by establishing a moderate competitive system.”
Such competitiveness would provide an opportunity to grasp international experiences, Abe said noting the need to design a policy with adequate research with a view to protect local banks from the external competitions.
According to him, it is necessary to develop a system in which foreign banks should invest in a limited number of shares and can gradually increase their share holding capacity. Doing so could boost local banks in the short term.