Measures for facing banking risks and improvement of banks efficiency [Archives:2004/756/Business & Economy]

July 19 2004

The Central Bank of Yemen has recently embarked taking new measures to encounter what is known as “banking risks” as part of its plans for financial reforms aimed at activation of monitoring banks performance and diagnosis of its case and also inspection of the conditions of banks scientifically and accurately.
In this context the Central Bank is presently organizing a training course in Sana'a lasting for the 25th of July. The course is under funding by the British Project (SEFM), aimed to improve and support the financial administration in Yemen in addition to training the participants on means of overcoming the banking dangers the banks are encountering.
The Central Bank divides those dangers to general ones as those related to economic fluctuations such as inflation, depression and prosperity or special dangers pertaining to performance of banks and other sorts of banking risks. The course is considered to be an advanced stage in the financial reform within a frame of integrated program for qualification training of bank cadres and which focuses on those working at the sector of bank monitoring and evaluation of their performance.
The Central Bank of Yemen Director-General Ahmed al-Samawi has affirmed that he financial reforms during the past period had achieved their objectives in the area of settling much of indebtedness of the Yemeni Bank of Reconstruction and the National Bank.
The Central bank is watching the banking sector, that four years before was suffering from floundering because of indebtedness against its clients. Efficiency of the capital had improved from 1% to a present percentage of 9-10%. Floundering debts problem has caused the delay of establishment of a stock-exchange market despite of completion of all necessary studies by the concerned parties. The banks had not been able to unify their financial capabilities and invest their assets for the establishment of the banking market as a result of a number of banks from paying their debts installments to government companies and institutions and businessmen. The Central Bank had then listed those banks on a black list.
The Mayor of the Central Bank has also added that the first stage of financial reforms has contributed to settling part of floundering debts and the bank has achieved an increase in its reserves that reached at the end of last May to $ 5 billion.