IMF and WB to oversee the processMerging banks could help middle class [Archives:2004/719/Business & Economy]

March 11 2004

A significant change is being witnessed in the Yemeni monetary sector recently, as the council of ministers has issued a decree which leads to the merging of the various government banks.
This is to improve the resources of the Yemeni middle class.
The capital of the new emerging bank is estimated not to be about $50 million. This capital includes the government participation being the capitals of the integrated banks in addition to opening doors for a strategic partner and underwriting for public shares.
This move comes in line with the economic reforms that had been going on in Yemen since 1995, guided by the World Bank vision, which indicates that if no change has been done in the monetary conditions then the whole monetary system would collapse.
And although there has been significant development in the capital of Yemeni banks, from YR 250 million to YR 500 million, to a recent YR 1.75 billion, the desired and expected enhancement in the revenue which was merely $7 million.
Therefore, a strategy was direly required in which the merging of the banks is the first step.
It also includes the creation modern monetary units spread around 301 districts and with strong capital and high technology so as to allow it to compete with external institutions and to open branches internationally.
The strategy also includes opening letter credits, and guarantees to fund the large scale projects and investments for better returns on the Yemeni economy.
The merging banks include the Yemeni Public Bank and the Yemeni Bank for Construction. The merging will take place with help of the WB and the IMF, through a specialised technical delegation that would evaluate the process.
In line with the merging, the Yemeni Central Bank has presented a study to accept new investment applications in the monetary sector and banks establishment whether national, Arab or international.