Addis Ababa January 10, 2017 The House of People's Representatives (HPR) in its 2nd year, fifth term, 11th regular session today referred two draft bills to pertinent Standing Committees after holding detailed deliberations on the bills.
Accordingly, a draft Proclamation on Government Bond and Agreement on Privileges and Immunities of the Global Fund to Fight AIDS, Tuberculosis and Malaria were referred to respective Standing Committees for further scrutiny.
The Proclamation on Government Bond aims at raising the capital of the Commercial Bank of Ethiopia which is a pace setter of the constellation of banks in the country.
The bank is a major financial source and a custodian of major financial deposits of the nation.
The Proclamation was deemed necessary to increase the capital of the bank as it plays a special role in the economic development of the country.
Government Whip Amanuel Abraham briefed the House on the role of the bank in financially supporting the projects which are of high value for the nation’s economic growth.
Amanuel said the draft bill enables the bank to close the gap between its fixed assets and level of capital and respond to the continuous devaluation of Ethiopian Birr against the US dollar.
The bill also addresses the incapacity of the bank to maintain the foreign currency open position limit issued by the National Bank of Ethiopia and to address the bank's operational vulnerability and risk profile.
The draft bill will enable CBE to conduct risk free operation and to maintain good working relations with foreign banks in terms of international banking and financial transactions through electronic financial transmission.
The bill will help reduce a gap of 26 billion Birr between the bank’s assets and its capital by facilitating interest free payment from the bank through government bond.
The Draft bill on ratifying an Agreement on Privileges and Immunities of Global Fund to Fight AIDS, Tuberculosis and Malaria was also discussed and referred to the appropriate Standing Committee.
It was indicated that the capital growth of the Commercial Bank of Ethiopia is not comparable to the bank's total assets.