President Bashar Assad’s stated intention of adapting the Syrian economy to demands of the 21st century is expected to result in new commercial banking law, which will allow private banks to own larger stakes in the sector.
Indeed, quoting senior Syrian sources, Lebanon’s Daily Star has reported that the banker said that the Syrian parliament may pass two separate laws on commercial banks, with the first permitting foreign banks to own 51 percent or more of a private bank in Syria, and the second allowing members of the Syrian private sector to own 51 percent or more of other private banks.
In the meantime, the Syrian banking community is already going through a period of liberalization. Permits to open branches in the country’s free zones have been granted to Fransabank, Societe-Generale Libano-Europeenne de Banque, Banque Europeenne pour le Moyen-Orient (BEMO) and Banque du Liban et d’Outre Mer (BLOM). Furthermore, Bank of Beirut and the Arab Countries is also expected to receive such a permit.
Naaman Azhari, the BLOM chairman, called on Syria’s central bank to tailor its regulatory framework so that private banks were allowed to operate on-shore as well as in the free zones. As a first step, he suggested that permits be given to Syrian banks managed by leading Arab and foreign banks. He also insisted that the Syrian government not to force private banks to deposit 10 percent of their capital with the central bank. An upper tax limit should be introduced on bank profits and interest deposits should not be taxed, he said.
Naaman suggested that Syria adopt a banking secrecy law. This he said would help attract Arab and foreign money into the country. – (Albawaba-MEBG)