Banking services should be gradually opened up to international competition so that banks can build their capacity
Commercial Bank of Ethiopia (CBE) President, Abe Sano, said local banking services should be gradually opened up to international competition to enable banks to build their capacity.
The government has closed the banking sector to the world market to prevent domestic banks from over-competing.
During his meeting with ENA, Abe Sano said it is not possible to build the capacity of local banks by closing the bank sector to the world market.
He said keeping the banking service closed would slow down the growth of local banks.
On the contrary, he said, the sudden opening of the banking service to the world market will also lead to the collapse of local banks.
Therefore, it is necessary to gradually open the banking service to international competition so that local banks can develop their competitiveness, he said.
He also said that the capacity of banks is not built by closing the market, but by establishing a moderate competitive system.
He noted that competition provides an opportunity to gain international experience; He said a well-researched policy is needed to ensure that local banks are not harmed by the competition.
He said foreign banks should invest in a limited number of shares and gradually increase their share size.
He also said that doing so could boost domestic banks in the short term.
Prime Minister Abhisit Vejjajiva told the House of Peoples’ Representatives that the closure of the banking sector was in his own interest. He said the country needs more resources and foreign exchange to improve its policy.