The Central Bank of Egypt is putting a lid on individuals’ transfers exceeding $100,000, reports Angy Essam
Thinking of sending your child to study abroad? Think again. Even if you can afford it, you might not be able to transfer the money to pay their tuition. “An individual’s total outgoing transfers since the 25 January Revolution to date should not exceed $100,000,” a source in BNP Paribas bank who preferred to remain anonymous told Al-Ahram Weekly.
If the individual has already transferred that amount they would not be able to make any other transfers. According to the source, this is a Central Bank of Egypt (CBE) directive to all Egyptian banks. And it does not expire until the CBE instructs otherwise.
“No one knows exactly when this limit will be lifted,” the source said. The limit placed by the CBE is part of its policy to mitigate the effects of the political transition on the economy and to prevent a panic rush by Egyptians to transfer deposits abroad. Immediately following the outbreak of the revolution, the CBE had placed a limit of $10,000 on any individual outgoing transfers.
“We have not had problems with the current $100,000 limit,” said another banker who preferred to remain anonymous. This source believes that the move by the CBE to limit transfers after the revolution is justified and much needed. “If it had not been in place many people would have probably transferred their money abroad and the economy would have collapsed.”
The source pointed out that with this move the CBE was able to keep hard currency in the banking system.
But this limit only applies to Egyptians. Foreigners are exempt as long as they prove the source of funds they wish to transfer. Furthermore, there is no limit for transfers made by entities such as companies or organisations. However, these entities have to provide documents supporting the need for transfer. For example, the source explained, a company wishing to make a transfer to import goods must show the detailed invoice sent to it from the importer. After the transfer is made the company must provide the bank with other documents proving that the goods have been shipped.
“We inform our customers about this limit from their first outgoing money transfer, so they are aware,” said an official source in National Societe General Bank (NSGB). The NSGB source added that in some cases a customer may have exceeded his limit and yet needs to make an outgoing money transfer for some critical or urgent purpose. In this situation, the source explained, the customer may request an exception from his bank branch.
“This request must be accompanied by the needed documents supporting the customer’s vital commitment,” said the source. For example, an invoice for medical treatment. The source added that the branch after receiving the customer’s request supported by the necessary documents would send it to the compliance department that in return will ask for an exception from the CBE to authorise that money transfer.
Heba Salah, 47, an engineer, was able to get one of those exceptions. She used to transfer money to her son in Canada for his school tuition. “I need to transfer $9,000 after I had already consumed my limit,” said Salah, adding that she asked for an exception supported by the necessary documents. “Thank God, the bank accepted,” said Salah, “otherwise my son would have been kicked out of his university.”
The bank source added that there is a centralised transfer system put in place by the CBE in all Egyptian banks. This system calculates the accumulated outgoing transfers of each customer since 25 January 2011. The source said that this system was tailored to prevent customers from exceeding their allowed limit in more than one bank.