WHEREAS, banks play an important role in economic development through mobilization of funds from within and outside the country and channeling such funds to various sectors of the economy;

WHEREAS, banks occupy a central place in the payment and settlement system of the country’s economy;

WHEREAS, the business of banking has a number of attributes which, if not managed properly, has the potential to generate financial system and macroeconomic instability;

WHEREAS, the cost of financial system and macroeconomic instability to the general public and the Government is significant;

WHEREAS, it is essential to ensure safety, soundness and stability of the banking system by having a comprehensive law for the licensing and supervision of the banking business;

NOW, THEREFORE, in accordance with Article 55(1) of the Constitution of the Federal Democratic Republic of Ethiopia, it is hereby proclaimed as follows: