Syria’s banking sector was transformed this week as two private banks opened for business in the capital, ending nearly half a century of state monopoly.
Minister of Finance Mohammad Al-Hussein officially inaugurated the Syria and Overseas Bank (BSOM) on Wednesday in Damascus, reported Sana. With a $30 million capital, BSOM is 39 percent owned by the Lebanon and Overseas Bank (BLOM) and 10 percent controlled by the International Finance Corporation (IFC). Syrian investors hold the remaining 51 percent of the shares.
The second bank, the European Bank of the Middle East (BEMO)-Saudi-Fransi began servicing clients on Sunday. BEMO was awarded a license to open a privately owned banking institution in Syria last year.
Syria’s financial sector was nationalized by the Socialist Baath Party when it came to power in 1963. It was fully state-owned and made up of the Syrian Commercial Bank, banks covering industry, agriculture, real estate, along with retail banking and post office savings.
President Bashar Al-Assad lined the banking sector up for liberalization when he assumed office in 2000. A reform law was passed in 2001 as part of a series of economic amendments aimed at attracting both local and foreign private investment to revive the Syrian economy.
The banking law specified the creation "of banks as private or joint venture companies with shareholdings." It stipulated that the banks will be open to Arab and foreign capitalization up to a maximum 49 percent in foreign currency, while at least 51 percent would be owned by Syrian private investors. — (menareport.com)
© 2004 Mena Report (www.menareport.com)
