Whereas, investment related activities of banks require sound and prudent practices to effectively manage risks;

Whereas, diversification of business activities and setting limits for investments are essential tools for risk management;

Whereas, there is a need to encourage investment in capital market service providers by banks and nurture the capital market in a manner that duly accounts bank’s risk exposure and ring-fencing of the banking business from the capital market operation;

Whereas, there is a need to ensure that banks focus on their core business which is debt financing and interest free banking operation managed at arm’s length;

Now, therefore, in accordance with sub article 1 and 2 of article 22 and article 66(2) of the Banking Business Proclamation No. 592/2008 as amended by Proclamation No.1159/2019, the National Bank of Ethiopia has issued this Directive.