Syria grants final approval to three foreign banks

30 April 2003
Syria on 29 April granted licences to three private banks to begin operations in the country. The three had already been granted preliminary approval pending the completion of a final study by a government panel. The three banks are: Lebanon's Banque de Liban et d'Outre Mer (BLOM), with participation form the World Bank's private sector financing arm, the International Finance Corporation; Lebanon's Banque Europeenne pour le Moyen Orient (BEMO), with Saudi Arabia's Banque Saudi Fransi; and the Housing Bankof Jordan. Foreign partners in the banks will hold a maximum 49 per cent stake with the remainder being held by local investors. Another two banks have been granted preliminary approval - Jordan's Arab Bankand a Bahraini bank. Announcing the licences, Syrian Economy Minister Ghassan Rifai said that a decree stipulating the awards would be issued within days, and the three banks would then have a year to begin operations before the licences become void.

President Asad passed a law in March 2002 allowing the establishment of private banks in Syria as part of the process of economic liberalisation. The prospect is most attractive to Lebanese banks since a significant proportion of the $41,000 million deposited in Lebanese banks comes from Syria (MEED 12:4:02). At the outset, the foreign banks will only be allowed to perform retail banking activities but this could later be extended. 'They will not start as universal banks, but their activities will widen,' said Rifai. 'They will crawl, walk, then run.'

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