Foreign Banks Welcome, But on Strict Terms: Ethiopia’s Central Bank Issues Landmark Directive Reshaping Banking Sector

The National Bank of Ethiopia (NBE) has unveiled a sweeping new directive titled “Requirements for Licensing and Renewal of Banking Business and Representative Office Directive No. SBB/XX/2025”, marking a historic shift in the country’s financial landscape. The directive, which replaces the 2013 regulations, lays the groundwork for opening Ethiopia’s banking sector to foreign banks under tightly controlled and highly regulated conditions.

“This isn’t just about opening the doors to foreign banks,” said a senior official from NBE. “It’s about opening the right doors, with the right locks, and only for those who come with the right credentials.”

Three Doors to Entry: Subsidiaries, Branches, and Representative Offices

The directive categorizes foreign participation into three entry channels:

• Foreign Bank Subsidiaries – locally incorporated entities under full Ethiopian laws.
• Foreign Bank Branches – extensions of international banks without separate legal identity.
• Representative Offices – non-transactional liaison offices limited to market research and promotion.

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