Sunday, June 16, 2024

NBE cracks whip on notorious Somali town


The new measure that the National Bank of Ethiopian (NBE) has introduced in bank branches at the border town of Somali region is said to cut off the emerging illegal trade that surrogates the luggage based business activity from Dubai.
It is to be recalled that the government imposed customs duty for frequent travelers, who are mostly business people who travel to UAE’s business hub, Dubai, to use the alternative that government wavered a tariff for, on some basic commodities and house wares about five years ago.
Capital sources that have close information about the situation said that since then the trade route has changed its course making Tog Wajaale, 700 km south east of Addis Ababa in Somali region at the border of Somaliland, the destination through Hargeisa.
As per the observation of travelers Capital spoke to, the trend at the Ethiopian Airlines fleet from Jigjiga, 628 km south east of Addis Ababa, have changed and the cargo loaded from Somali region’s capital, has shown sudden increment.
While on Thursday June 2, the financial sector regulatory body notified banks that as of the stated date bank branches located at Tog Wajaale faced a downgrade to the sub branch level, which is a step down from a full-fledged branch.
A bank president that Capital spoke to with regards to NBE’s new decision said that it means that branches there would serve the community on the basis of cash withdrawal and saving.
“Transferring money to or from Tog Wajaale has been suspended as per the new sub branch level,” they explained.
They added that the new decision mainly targets to curb the illegal transaction and erode the parallel market. Experts said that Tog Wajaale is one of the illegal foreign currency fleet hubs, while bank branches there have played some role.
“Now banks would be discouraged to do only retail banking service, while besides the transfer forex activity will not be allowed for sub branches,” one of the senior bank experts told Capital.
NBE has also disclosed that the new decision was applied since it understood that branches at border towns are having rising cases in the illegal transfer.
Experts said that new decision will hopefully cut the new trade hub. They explained that the new decision would make it difficult to settle payments for smugglers, who manage to transport commodities that come from Dubai to Somaliland through border areas.
However, they have also insisted that the role of customs officers to be investigated at both airports in Jigjiga and Addis Ababa, since they might be linked in the smuggling of goods to the centre.
Bankers have also agreed that the illegal activity will be curbed on the latest measure taken by NBE.
After the move the black market in the area dramatically decreased. The price of dollar decreased by a staggering 12 birr to be sold around 70 birr from the previous 82 birr before the move.
According to the NBE branch opening directive, sub branches shall not execute international banking or trade finance, and processing loan and advances services.
Experts said that almost all banks have branches at the town.

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