For the first time since 1963, Syrian President Bashar al-Assad authorized the creation of private banks in the country, in addition to banking secrecy, reported the official SANA news agency on Monday, April 16. The law allows new banks to operate as joint-stock companies funded by either private or public capital. Foreigners or firms can own up to 49 percent of the new private institutions, which are first to have a capitalization of at least $30 million.
The intention of the new banking secrecy law is to attract local and foreign private investments so as to rebuild the Syrian economy which has been stagnant for over 20 years. Some 50 foreign banks, most of which are based in the Arab world, have already showed interest in entering the Syrian market.
Upon the entry of the Baath party into power, Syria nationalized its banking sector in 1963. Many Syrians, however, have opened accounts in neighboring countries such as Lebanon, Jordan and Cyprus, due to inadequate services offered by Syrian banks. The flead of capital has lead Syria’s six public banks to loser over $200 million in earnings, which consequently prevents the banks from funding private firms and development projects. — (Albawaba-MEBG)
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