List of banks accredited to the central centers of Aden.. Conflict and confusion under the umbrella of reforms

English - الخميس 19 يناير 2023 الساعة 11:02 ص
Aden, NewsYemen, exclusive:

The recent government measures to restore the role of the Central Bank of Aden in supervising Yemeni banks represent one of the most important steps within the framework of the financial and banking reform program that is being taken in order to gain the confidence of banks and international financial funds to obtain grants and support.

Several procedures and measures that the Yemeni government intends to implement during the year 2023, to enhance the role of the Central Bank in supervising the banking sector, and for government financial and monetary institutions to absorb the conditions of regional and international financing funds, especially in the aspect of combating money laundering and terrorist financing towards local banks and their foreign dealings.

The first of these steps was at the end of December 2022, when the Central Bank of Aden identified the names of the banks accredited to it, which are committed to providing financial statements and are subject to control and inspection by the bank.  According to the letter sent by the Governor of the Central Bank to the Ministry of Planning and International Cooperation in Aden on December 22, 2022, 12 banks were identified: (Tadhamon Bank, Saba Islamic Bank, Arab Bank, Al-Qutibi Islamic Microfinance Bank, Aden Microfinance Bank, Al-Kuraimi Islamic Bank,  Al-Kuraimi Bank for Microfinance, Agricultural Cooperative Credit Bank "Aden", Shamil Bank of Yemen Bahrain, Al-Amal Microfinance Bank, Bank of Yemen and Kuwait.

However, the Ministry of Social Affairs and Labor in Aden did not approve all of the list of banks specified by the Central Bank of Aden, and issued official directives on January 1, 2023 to civil society organizations and institutions operating in Aden, asking them to approve only four banks: (The National Bank of Yemen, the Agricultural Cooperative Credit Bank  , Aden Bank for Microfinance, Al Qutibi Islamic Bank for Microfinance), being accredited banks and subject to the control and supervision of the Central Bank of Aden.

The Ministry of Social Affairs and Labor called on civil society institutions and organizations to stop opening and closing their accounts in other banks, a measure that contradicts the bank's letter addressed to the Ministry of Planning and International Cooperation, which included the names of 12 approved and supervised banks.

The financial auditor in one of the civil institutions operating in Aden, Murad Salih, told "NewsYemen": The confusion and conflict between the list of banks at the Central Bank of Aden and the Ministry of Social Affairs and Labor will hinder many projects and activities that civil institutions and organizations conduct in partnership with several donors, including the office.  United Nations Development in Yemen.

He added: There are civil institutions that have bank accounts in banks accredited by the Central Bank of Yemen, but they are not accredited by the Ministry of Social Affairs and Labor. This conflict and confusion reveals a defect in the lack of coordination between the Central Bank and other government agencies, explaining that some banks are excluded from the list of banks approved by the Bank.  Central Aden is still dealing with regional and international organizations and donors, whether in Sana’a or abroad, which require that local institutions have accounts in the same banks in order to send the value of programs and grants. Local institutions cannot force international and regional organizations to change their bank accounts in  those banks.

Governmental financial and monetary institutions in Yemen are trying to accommodate the terms of financing funds, the US Federal Reserve, the requirements of regional banks, and international and regional organizations responsible for compliance and combating money laundering and terrorist financing towards local banks in their foreign dealings, as well as imposing necessary measures such as subscribing to the new Swift system service as a regional requirement.  Important to facilitate the transactions of Yemeni banks with foreign banks.

The Central Bank of Yemen held a meeting in mid-December 2022 with commercial and Islamic banks operating in Yemen to develop solutions and proposals for the advancement of the banking and financial sector during the year 2023.

The procedures for buying and selling foreign currencies were discussed, and the requirements of the US Federal Reserve. The Undersecretary of the Banking Supervision Sector, Mansour Rajeh, spoke about the requirements of regional banks and international and regional organizations responsible for compliance and combating money laundering and terrorist financing towards local banks for their foreign dealings.

While Dr.  Muhammad Banaja emphasized the necessity of subscribing to the CBY Fininform service of the SWIFT SCOP system, which is an important regional requirement to facilitate the dealings of Yemeni banks with foreign banks, stressing the need for banks to return to playing their role in providing banking services to their customers.  And restoring the confidence of correspondent banks in order to advance the role of the banking system.

During the past months, the leaders of the Central Bank of Aden and the Ministries of Finance, Planning and International Cooperation held continuous discussions with representatives of funds, banks and international financial institutions, including the International Monetary Fund and the World Bank, in order to obtain aid and more grants and loans.

Those meetings emphasized the need for government financial institutions in Yemen to take corrective measures in the financial and banking sector to counter the decline in foreign aid, especially with regard to achieving food security.