Syria Anticipates Foreign Investments Exceeding One Billion Dollars to Establish New Banks

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The Governor of the Central Bank of Syria, Mohammad Safwat Raslan, predicted that the volume of foreign capital inflows to establish new banks in Syria would exceed one billion dollars in the upcoming period, as part of a set of goals for the central bank to encourage investment in the country, protect customer rights, and open secure transfer corridors through official channels.

Raslan stated today, Sunday, that regarding the acceptance and licensing criteria, there are specific criteria and executive instructions for licensing Islamic and traditional banks. The most important of these criteria include the experience of the applicants, their reputation, and the financial solvency of the founders, in addition to the necessity of having a strategic banking partner who holds at least 10% of the established bank.

He added that the time frame for granting licenses generally depends on the applicants providing the central bank with the required documents and meeting the stipulated conditions, emphasizing that the bank places great importance on this matter and is working diligently to ensure that the period for issuing the initial license does not exceed 3 to 4 months from the moment all requirements are received, according to the Syrian news agency "SANA."

Raslan confirmed that there are no financial risks because the law allows foreign investors to retain 60% of the paid-up capital in foreign currency, and regarding profits and their transfer, this is also protected. He pointed out that all restrictions on buying and selling foreign currencies or transferring them have been lifted, thus there are no financial risks for investors in this regard.

Regarding regulatory risks, Ruslan explained that the Central Bank of Syria issues its regulatory and supervisory decisions in accordance with international standards, whether in terms of risks or accounting. Therefore, investors will not find any difference between what is applied in their countries and what is applied in Syria.

As for the resumption of money transfer services via "MoneyGram" between Jordanian and Syrian banks, the Governor of the Central Bank of Syria stated that the service was temporarily halted for settlement-related reasons, which have been resolved in cooperation with one of the Jordanian banks. He pointed out that there are several requests from Jordanian banks to invest in Syria.

Concerning the mechanism for delivering remittances and the exchange rate, Ruslan revealed the Central Bank's intention to request that financial institutions providing international remittance services deliver the remittance to the beneficiary exclusively in foreign currency. This is because many beneficiaries do not wish to convert directly, which falls within the framework of protecting customer rights and maximizing their benefits.

Ruslan clarified that the Central Bank is working to allow and encourage all providers of international remittance services to enter the market through Syrian financial institutions, in order to open safe transfer corridors for Syrians and foreigners and protect their rights and interests.

He added that the ceiling for daily and monthly remittances allowed is subject to an agreement between the financial institution in Syria and the bank or company providing the service abroad, explaining that what matters to the Central Bank of Syria is to take the necessary measures and set the ceilings by the institutions in accordance with the nature of the service provided.

Raslan emphasized the importance of financial institutions having electronic tools that enhance the principles of oversight and compliance on one hand, and not overdoing procedures so that these transfers continue to take official channels sustainably on the other hand.

Regarding the requirements of the "SWIFT" system and the Financial Action Task Force "FATF", Raslan stated that financial institutions need to acquire modern electronic oversight tools and link them with their financial and banking systems, affirming that most Syrian banks have started to cover this gap and have the components that make them a safe passage for international banking operations.

He stressed that the top priority now is to exit the gray list, which requires ensuring that all banks and non-banking financial institutions have the technologies, policies, and procedures that fortify them and facilitate oversight, noting that banks are close to achieving this.

Concerning the adoption of local currencies in inter-trade settlements, the Syrian central governor revealed that the current trend is to use the Jordanian dinar and all Arab currencies pegged to the dollar for the purposes of settling exports and imports, which enhances the smooth exchange of trade between Syria and these countries, considering that using the Syrian pound for settlement purposes "is a bit premature."

Regarding the impact of regional banking relaxations on the central bank's primary goal of curbing inflation and stabilizing the value of the Syrian pound in the medium term "like what is happening with Jordan", Raslan explained that the easier the transfer operations are conducted without intermediaries, the more money flows into Syria, which contributes to improving purchasing power and increasing spending, thereby increasing the gross domestic product and consequently stabilizing prices.