Friday, January 28, 2022
Capital 23th final
Abader-final-oneAA
previous arrow
next arrow
Shadow
HomeNewsInsurers seek two-way cooperation over DBE bond

Insurers seek two-way cooperation over DBE bond

Insurers argue that despite the National Bank of Ethiopia (NBE) ordering insurers to buy 15 percent bond from the Development Bank of Ethiopia (DBE), the bank ought to replicate the same by working with private insurance firms.
A few months back, NBE imposed on insurance companies to buy 15 percent bond from the stated owned DBE from their total annual net profit.
However experts in the insurance industry argued that the bank should also work with private insurers. They claim that DBE is only engaged in business with the state giant, Ethiopian Insurance Company (EIC), which is unfair to the private insurers.
One of the insurance sector expert said that insurers shall accept the decision of NBE that ordered them to buy the bond under the directive ‘Investing in Development Bank Bond Directive No.SIB/54/2021/’, “However, on the reverse, DBE must give business for insurers who are investing on the policy bank,” experts opined.
Under article 4.1 of ‘investing in Development Bank Bond Directive No.SIB/54/2021/’ NBE ordered all insurers except the state owned EIC, stating that an insurance company shall invest an amount equal to a minimum of 15 percent of its net income in DBE Bond.
Article 4.2 of the directive says an insurance or Ethiopian reinsurance company shall invest the amount stated under article 4.1 within 90 days after the close of its financial year.
“The directive excluded the state insurers but it is the only company that works with DBE,” experts said, adding, “Since we have partnership and investment with DBE at least the policy bank should include us as an alternative service provider for its customers.”
The Bond will have a maturity period of three years and will have a payment of bond rate of at least two percent points higher than the minimum interest rate paid on saving deposit at the time of issuance. Currently, the minimum deposit rate is seven percent that means on this rate the DBE Bond maturity rate is nine percent.
The directive that becomes effective as of September 1 stated that DBE Bond shall be paid annually.
Recently, the government through NBE, a financial industry regulatory body, amended existing rules and directives or introduced new monetary policies and directive to control the galloping inflation.
The NBE Board announced that it will continue to closely monitor economic and financial developments and stands ready to utilize all available policy tools at its disposal to ensure price and financial stability consistent with its legal mandate.

RELATED ARTICLES
- Advertisment -

Most Popular

Recent Comments

ART, LAW & OPEN BORDERS! – Al Nejash Media on ART, LAW & OPEN BORDERS!
Be original – Al Nejash Media on Be original
[09.15.2018.00:15] Russian, Turkish presidents to discuss Idlib on September 17 – 含的兒子是古實、麥西、弗、迦南。 7 古實的兒子是西巴、哈腓拉、撒弗他、拉瑪、撒弗提迦。拉瑪的兒子是示巴、底但。 8 on MetEC outsources electromechanical work of GERD to Chinese firm
ART FOR HEALING – Al Nejash Media on ART FOR HEALING
BREAKING NEWS: Azeb Asnake removed from EEP – Al Nejash Media on BREAKING NEWS: Azeb Asnake removed from EEP
Big fish Getaneh Kebede signed with Saint George – Al Nejash Media on Big fish Getaneh Kebede signed with Saint George