By Ayat El Battawy
Recent events and clashes in Egypt have led banks to request that private security and money transfer firms beef up their operations in branches located throughout the country.
Mohamed Abbas, president of the board of directors for the private security and money transfer firm Speed Services, said that the industry has witnessed a 25%-50% increase in demand from banks due to fears about the possibility of an increased number of robberies throughout the country.
Abbas added that despite increased demand, banks have been unwilling to pay more for increased security, claiming that the country currently faces a unique set of circumstances that exempt them from having to do so.
He added that banks had refused to increase the value of their contracts with these firms at the beginning of this year, despite political instability.
Private security firms have requested that banks double the value of their contracts, which vary between EGP 50,000 to EGP 100,000 yearly depending on the location of the bank’s branches and head office and whether they are located in densely populated or remote areas. According to companies, this will help to improve the efficiency of security officers, enabling companies to increase their salaries.
Al-Sayyid abd al-Wanis, a member of the Security Division of Egypt’s Chambers of Commerce, recently said that banks’ demands place a burden on private security firms, who have signed yearly contracts with banks in return for fixed sums of cash.
He said that security firms requested that banks bear the cost of increased security, as forcing the former to do so would violate the terms of their contracts.
He went on to say that firms working in Port Said, Ismailia and Suez had already increased the amount of security placed on vehicles and armoured cars due to recent clashes in those cities which resulted in the imposition of a state of emergency and a series of province-wide curfews.
He said that companies had instructed vehicles operating in those provinces to take short-cuts to their destinations and make trips once every two days as opposed to every day, so that firms could place extra security on each car.
Ali Ibrahim, director of branch operations for a prominent Islamic bank in Egypt, said that banks were justified in refusing to double the value of their contracts with private security companies.
He did acknowledge that banks’ refusals to meet the demands of private security firms may result in the nullification of their contracts.
He pointed out that banks had already doubled the value of their contracts with the Ministry of Interior to pay for increased security at their branches, with security officers earning EGP 4,600 a month as opposed to EGP 2,300. He added that several million additional pounds had been set aside by several banks’ board of directors as part of a new budget to pay for the increased cost of security services.
He added that the Federation of Egyptian Banks (FEB) was considering creating its own security firm to avoid working with the Ministry of Interior and private companies.
Sharif Gama, secretary general of the FEB, said that by the end of the month he would be reviewing a study conducted by private consulting firm Deloitte regarding the possibility of the Federation establishing its own security and money transfer firm. He said he would soon present the idea to the FEB’s Board of Directors and request that all member banks contribute funds to establish the firm.