NBE Tightens Grip: Cracking Down on Personal Accounts for Business Use
The National Bank of Ethiopia (NBE) is taking decisive action to reinforce financial regulation. A newly issued directive mandates all Ethiopian banks to rigorously monitor and prevent business operations from being conducted through personal or third-party bank accounts. This initiative aims to enhance financial transparency and mitigate the risks associated with tax avoidance and other forms of illicit financial activity within the country.
Reinforcing Financial Oversight
The directive’s foundation lies in Proclamation No. 1359/2017, which grants the NBE the authority to oversee and regulate Ethiopia’s financial institutions. The NBE’s action comes in response to findings that a significant number of businesses and individual traders are circumventing proper financial channels. Instead of using officially registered business accounts, these entities are utilizing personal or third-party accounts for business transactions, creating avenues for tax evasion and obscuring financial trails. This practice undermines the integrity of the financial system and hinders effective economic governance. The NBE’s intervention seeks to close these loopholes and ensure that all business activities are conducted through appropriate, transparent channels.
By enforcing stricter adherence to financial regulations, the NBE aims to foster a more robust and accountable financial environment in Ethiopia, ultimately supporting sustainable economic growth and development. This directive represents a significant step towards strengthening financial oversight and combating illicit financial flows within the country.
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