Ethiopia's NBE Issues Directive SBB/94/2025 Opening Country to Foreign Bank Branches and Subsidiaries

The National Bank of Ethiopia issued Directive No. SBB/94/2025, which entered into force on 25 June 2025, establishing a formal licensing framework for foreign banks seeking to operate in Ethiopia through subsidiaries, branches or representative offices. The directive sets out the capital requirements, application procedures and operational conditions that foreign entrants must meet.

For decades, Ethiopia's banking sector was closed to foreign ownership and participation, with all licensed commercial banks required to be domestically owned.

ETB 5 BILLION CAPITAL FLOOR FOR BRANCHES

Under Directive SBB/94/2025, foreign bank branches seeking to establish operations in Ethiopia are required to maintain permanently assigned capital of Ethiopian birr 5 billion, which must be inwardly remitted in foreign currency.

Foreign bank subsidiaries face the same minimum paid-up capital of ETB 5 billion, which must be fully paid in cash in foreign currency, while a representative office, which may not conduct banking business, requires an inwardly remitted cash deposit of at least USD 100,000 covering its annual expenditure.

Representative offices under the directive may not engage in any banking business and are limited to representational activities, such as promoting the parent bank's services, acting as a liaison with local banks and businesses, facilitating correspondent banking relationships and conducting market research.

NINETY-DAY REVIEW AND TWELVE-MONTH COMMENCEMENT CLOCK

The National Bank of Ethiopia has set a 90 calendar-day window within which it must review completed licence applications. The 90-day period begins upon receipt of a complete application.

Licensed subsidiaries are required to commence banking operations within 12 months of receiving their licence.