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 said today, Sunday, that regarding the acceptance and licensing criteria, there are existing standards and executive instructions specifically 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 attaches great importance to 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 guaranteed, noting that all restrictions on the buying and selling of foreign currencies or their transfer 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 a difference between what is applied in their countries and what is applied in Syria.

Regarding the resumption of remittance 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 requests from several 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 secure remittance 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 carry out the necessary procedures 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 over-exaggerating procedures so that these transfers continue to take official channels in a sustainable manner 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, confirming 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, pointing out that banks are close to achieving that.

Concerning the adoption of local currencies in inter-trade settlements, the Syrian central bank governor revealed that the current trend is to use the Jordanian dinar and all Arab currencies pegged to the dollar for export and import settlement purposes, which enhances the fluidity of trade exchange between Syria and these countries, considering that using the Syrian pound for settlement purposes "is somewhat 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 "similar to what is happening with Jordan," Raslan clarified that the easier the transfer operations are conducted without intermediaries, the more money flows into Syria, contributing to improving purchasing power, increasing spending, which then raises the GDP, and consequently stabilizes prices.