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FJP to restructure the National Investment Bank

The FJP's economic committee sets out to restructure the National Investment Bank due to the intricate problems and inefficiencies it currently suffers

By Mahmoud Salah Al-Din

Muslim Brotherhood’s renowned businessman khairat Al-Shater (Photo by AFP)

The economic committee of the Freedom and Justice Party (FJP) plans to address the complications pertaining to the National Investment Bank (NIB) stated committee member Abdelhafez Al-Sawy.

The party has ordered a comprehensive study of the issue in order to find the most efficient method to restructure the whole entity.

Hazem Al-Beblawi, former Minister of Finance, stated that resolving the NIB’s complex problems and the financial entanglement from which it suffers is connected to reviewing the entire financial situation of the country.

According to Al-Beblawi, the NIB is a creditor to a number of agencies such as the Ministry of Electricity, the Egyptian Railway Authority, and to the business sector at the same time that it is a debtor to other entities, representing a “focal point” of the state’s web of finance.

The bank’s budget for the 2012-2013 fiscal year is roughly EGP 31.9billion, with current expenditures standing approximately at EGP 168millionand transfers at roughly EGP 24.6billion.

Capital transfers equal approximately EGP 3.7billion and the value of the bank’s lending is worth EGP 250million, in addition to EGP 3billion in consumption loans.

Down payments equal EGP 140million while other capital transfers equal EGP 114.5million.

The bank’s targeted finance is EGP 3.4 billion with EGP 2.5billion distributed among economic agencies and EGP 500million for companies not operating under law no. 203 of 1991.

The bank will participate in financing projects with EGP 100million and in investment banking with EGP 35.5million, in addition to soft loans in the amount of EGP 300million.

Transfers and ongoing revenues are valued at EGP 24.8billion, with capital revenues amounting to t EGP 7.1bn, of which EGP 2billion are in investment certificates.

EGP 200million of the banks EGP 300million in soft loans have been allocated for residential projects in governorates apart from Cairo and Giza, with EGP 180million for government sponsored housing and EGP 20million for low cost housing.

NIB’s soft loans will provide EGP 40million in finance the projects ofthe General Authority for Construction and Housing Cooperatives, with EGP 10million for military housing, EGP 5million fo for police housing, and EGP 10million for the Ministry of Housing’s projects.

The bank will allocate EGP 10million in soft loans to land reclamation companies in the private sector, another EGP 10million for a veal fattening project, the same amount for exportation projects, and another EGP 10million for industrial regions within the governorates.

Field Marshal Hussein Tantawi, head of the Supreme Council of the Armed Forces (SCAF), issued a decision to subordinate the NIB to the Ministry of Planning pending the cabinet’s approval.

The NIB has been subject to the Ministry of Finance for the last decade.

According to the decision, law no. 285 of 2012, the Minister of Planning will take over responsibility for the bank.

The regulations of the Central Bank of Egypt (CBE) and its financial system will apply to the NIB.

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