NBE faces backlash over Sinqe Bank’s new president
The National Bank of Ethiopia’s (NBE) recent approval of Sinqe Bank’s president has been put under backlash by sector experts who have gone further to state that the new appointment is a sign of double standards from the central bank. On the flip side, the leadership at Singe has refuted the said claims and has argued that NBE has played by the book, in terms of approval.
In the letter that NBE wrote on March 18 which was signed by Frezer Ayalew, Director for Banking Supervision Directorate, it stated that the regulatory body accepted the request of Sinqe, which filed its request on March 1, for the approval of Neway Megersa as president of the bank.
The brief approval letter of NBE added that the assignment acceptance is given on the consideration of special treatment.
This decision of NBE has raised concern from the sector experts who claim that the central bank’s appointment has crossed the relevant directive for the appointment of the seat. They said that such kinds of decisions would erode the strong stance of the regulatory body, which is well known for its highly strict regulation stand.
NBE’s ‘requirement for persons with significant influence in a bank directive number SBB/70/2019’ article 5.1.2 states that a chief executive office (CEO/president) shall have a minimum of 12 years experience in banking, of which, at least five years shall be as senior executive officer.
Neway to this end presents 13 years of experience in the banking industry, serving Nib International Bank for 5 years as planning and research officers and 8 years of service at several positions in Oromia Bank.
Moreover, Neway was working as board chairperson of the Sinqe Bank, while he was at the top of Kegna Beverages, a parastatal of Oromia region, before he proceeded to become president of Sinqe.
Neway has also stated that he was confused by the term used by NBE, which stated that the approval was given on a special case. He however argues that he has relevant requirements for the post.
“For Sinqe’s approval request the response of the regulatory body was supposed to be as simple as yes or no,” he says, adding, “I am confused why they put the term ‘special treatment’ on their approval letter.”
He told Capital that as far as his knowledge is concerned, the requirement mentioned on the directive is all about experience as well as age, which he fulfills.
The 2006 directive of NBE specifically stated that the CEO of a bank shall be at least 30 years old, which is not mentioned on the directives which were issued on the 2012 or 2019 amendments.
However, experts said that referring to a minimum age for the CEO or president in the directive is not relevant, since the work experience requirements by default push the president’s age to be above 30.
Neway said that he has 13 years of experience in the banking industry of which 7 years was as a member of the executive management.
Capital’s effort to get information from Yinager Dessie, Governor of NBE, and Frezer was unsuccessful.
However, sources at NBE said that the latest special approval is to be seen as a policy decision given by the Governor.
Sinqe is the upgraded financial firm of the former Oromia Credit and Saving Share Company (OCSSCO).
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