Damascus-Sana
President Bashar Al-Assad issued today Law No. 8 of 2021, which permits the establishment of “micro-finance banks” with the aim of securing the necessary financing for projects of small producers, small-business owners, and those with limited and no income by granting them operational loans in order to secure additional income for this segment and create job opportunities And achieving sustainable development.
The following is the text of the law:
Law No. (8)
President of the Republic:
Based on the provisions of the constitution.
And based on what was approved by the People's Assembly in its session held on 4/7/1442 AH
Corresponding to 2/16/2021 AD.
Issue the following
:
Chapter 1
Tariffs and goals
Article / 1
/: The
words and expressions contained in the application of the provisions of this law have the meaning indicated next to each of them:
Banks: Microfinance banks.
Strategic Partner: The legal person who possesses the experience, technical competence, financial solvency, and administrative and organizational capacity in the field of microfinance necessary to establish the bank, and enjoys a good professional reputation.
Operating banks: Banks licensed in the Syrian Arab Republic, whether public or private, updated according to the provisions of Law No. 28 of 2001 and its amendments, or investment banks updated in accordance with the provisions of Legislative Decree No. 56 of 2010.
Article / 2
/:
This law aims to achieve financial access for the largest possible segment of low-income or no-income people who have the ability to engage in an economic activity, and who cannot access banking financial services by providing various financial products and services in the areas of credit, savings and insurance. And the associated non-financial services, including training, capacity building, providing advice to clients and others, with the aim of securing additional income, creating job opportunities, improving the quality of life in pursuit of the economic and social dimension in order to achieve sustainable development.
Chapter II
Incorporation
Article / 3
/:
The Currency and Credit Board may authorize the establishment of banks in the form of closed joint-stock companies aiming to provide microfinance in addition to other financial and banking services stipulated in this law.
It is a condition that one of the founders be a strategic partner, and the Monetary and Credit Board shall set the conditions and standards that must be met by the strategic partner.
Article / 4
/:
A- Banks can be established by private Syrian associations or institutions or non-Syrian institutions that have experience and competence in this type of activity.
B - It is a condition for Syrian private associations and institutions to have a public benefit status in accordance with the laws in force.
C- It is not permissible for a legal person established or a shareholder in it by a Syrian private association or institution that does not enjoy the status of public benefit, to participate in establishing banks or contribute to them.
D- It is a condition for non-Syrian persons, upon incorporation or participation, to obtain prior approval from the Prime Minister based on the proposal of the Currency and Credit Council.
Article / 5
/:
Operating banks may participate in establishing banks or contribute to them, after obtaining approval from:
A- The Council of Ministers, based on the recommendation of the Currency and Credit Council, for public banks in which the percentage of their contribution to the capital is determined.
B - Monetary and Credit Council for private banks and investment banks.
Article / 6
/:
A- The founders may not assign ownership of any of their shares to others prior to the issuance of three winning annual budgets.
Subject to the provisions of Paragraph / A / of this Article, the strategic partner may not partially or totally assign ownership of any of his shares at any time except with the prior approval of the Monetary and Credit Council, and in case of non-approval, the Board’s decision must be justified.
Article / 7
/
Contribution ratios
:
A- The minimum percentage of the strategic partner's contribution must not be less than (25%) twenty-five percent of the capital.
B- Subject to the provisions of Paragraph / A / of this Article, in the event that the bank takes the form of a public shareholding company, the shareholding percentages are as follows:
The contribution of a natural person must not exceed (10%) ten percent of the capital, and the contribution of the husband and children is included in this percentage.
The maximum total percentage of non-Syrians' contributions should not exceed (49%) forty-nine percent of the capital, including the contribution of the non-Syrian strategic partner.
The percentage that is offered for public subscription shall not be less than (25%) twenty-five percent of the capital.
Chapter III
capital
Article / 8
/:
A-The minimum capital of the bank is an amount of / 5,000,000,000 / SYP five billion Syrian pounds, divided into tradable nominal shares of / 100 / Ls one hundred Syrian pounds per share, and the minimum capital may be increased by a decision of The Council of Ministers based on the proposal of the Monetary and Credit Council.
B - Part of the capital may be in the form of in-kind advances, provided that the value of this part does not exceed (10%) ten percent of the total capital to be evaluated upon incorporation, and the Monetary and Credit Board shall lay down the necessary controls regarding the evaluation of these advances, which are re-evaluated. Only when dissolving and filtering.
C-In the event that the bank is a private joint-stock company, it shall deposit its cash capital in full and in one installment upon incorporation in a special account with the Central Bank of Syria. D- If the bank is a public anonymous joint-stock company, it shall deposit 50% of its capital. The cash declared in one payment upon incorporation into a special account with the Central Bank of Syria, and the value of all subscribed shares shall be completed within a period not exceeding three years from the date of the bank’s start of its activity.
Article 9
: The
Currency and Credit Council mandates the bank to increase its capital according to the degree of growth of its activities and activities in order to achieve the approved international standards for capital adequacy.
Article / 10
/: The
non-Syrian or non-resident Syrian shareholder shall pay the value of his contribution to the capital in foreign currencies according to the exchange rate bulletin issued by the Central Bank of Syria on the date of payment.
the fourth chapter
Services and activities
Article / 11
/:
The bank shall provide the following services and activities:
A- Accepting deposits in the Syrian currency.
B- Financing, financial products, and micro-loans, with or without guarantee.
C- Opening current and saving accounts.
D- The insurance and reinsurance services of the Syrian insurance companies that grant them to the targeted persons in accordance with the controls set by the Insurance Supervision Commission.
E - Investment in government securities and securities issued by the Central Bank of Syria.
F- Advice and guidance in the administrative, marketing and technical fields.
G- Training services, conducting research, issuing bulletins and preparing statistics necessary for his work.
H- Contributing with the banking system to transfer funds at the request of individuals within the territories of the Syrian Arab Republic, especially in areas where there are no operating branches of banks, in accordance with the controls issued by the Monetary and Credit Council in this regard.
I- Any other services that are compatible with the nature of his work and his objectives, previously approved by the Monetary and Credit Board.
Article / 12
/:
A- The bank, with the prior approval of the Monetary and Credit Board:
1- Borrowing the necessary funds to carry out his business.
2- Contributing to establishing banks within the territories of the Syrian Arab Republic, in accordance with the controls specified under this law.
3- Establishing a cutting center in foreign currency, in accordance with the controls and standards set by the Monetary and Credit Board, including determining the maximum percentage of these subscriptions to form a cutting center, and it may be reduced by a decision of the Currency and Credit Council, provided that such parts are sold exclusively to either one of the operating banks or For the Central Bank of Syria.
B- For the bank, with the prior approval of the Central Bank of Syria:
1- Creating branches, offices, and mobile banking services units in the areas where he deems a need for these services or any other normal or electronic outlets acceptable to provide services.
2- Purchasing the necessary real estate within the territories of the Syrian Arab Republic to exclusively exercise his services.
3- To stop fully or partially from practicing his services for any period of time according to justified reasons.
4- Accepting gifts, bequests and donations in accordance with the laws and regulations in force.
Chapter V
Obligations
Article / 13
/
:
The bank is committed to the following:
A- To deposit in a frozen account without interest with the Central Bank of Syria an amount equal to (5%) five percent of its paid-up capital, and the amount is considered an element of its fixed assets, which will be returned to it upon dissolution and liquidation.
B - To comply with international accounting standards.
C - To use modern technologies in its operations and services, including electronic payment, in accordance with the regulatory decisions issued by the Monetary and Credit Council and the Central Bank of Syria.
Chapter six
Control and supervision
Article / 14
/:
Taking into account the special provisions contained in the basic monetary system and the Central Bank of Syria Law No. 23 of 2002 and its amendments, and the international basic principles of banking supervision, the Currency and Credit Council undertakes the following:
1- Supervising banks updated according to the provisions of this law regarding the conduct of their business, services and compliance with their regulations.
2- Assigning, in cases of necessity, the specialists it deems appropriate, to carry out specific tasks related to auditing the bank’s records, accounts, books, records, correspondence and invested technical systems to verify the correctness of their operations, services and banking activities.
3- Take all appropriate measures to correct the conditions of banks and preserve the rights and funds of shareholders, depositors and those dealing with them.
B - The Monetary and Credit Board shall lay down the precautionary rules and controls necessary for the continuity and soundness of banks' work and approve the proposed interest rates, taking into account the special nature of their objectives and services.
Article / 15
/
: Banks are subject to the supervision of the Insurance Supervision Authority, with regard to their activities in the field of insurance services to clients, and they are obligated to provide the periodic data requested by the Central Bank of Syria.
seventh chapter
Exemptions and benefits
Article / 16
/:
A- Banks are exempt from income tax on net profits resulting from their work during the first five years of starting their business.
B - The income tax rate is determined on the net profits achieved by the established banks in the form of private joint-stock companies for all their activities at a rate of (14%) fourteen percent, including all additions, except for the addition of the national contribution to reconstruction and addition for the benefit of the local administration.
C - The income tax rate is determined on the net profits achieved by the established banks in the form of public joint-stock companies, for all their activities at a rate of (10%) ten percent, including all additions except for the addition of the national contribution to reconstruction and addition for the benefit of the local administration.
D- Bank clients are exempt from all fees under any designation whatsoever on any contracts or operations they conduct with the bank, including mortgage fees and stamp fees.
E-Bank customers are exempt from income tax on the proceeds generated from deposits with the bank, for deposits whose value does not exceed / 2,000,000 / SYP two million Syrian pounds, whether these sums are in one deposit or several per person deposits.
Article / 17
/:
A- Banks may deal in foreign currencies according to the cutting regulations in force, and the instructions issued by the Currency and Credit Board, and they are prohibited from carrying out any operational activity in foreign currencies.
B- Banks may, based on their duly attested annual budgets and accounts, transfer the following entitlements abroad through any of the licensed financial institutions permitted to conduct transfers or transfer funds abroad:
1- Interest, returns, and other costs incurred on the paid-up capital by non-Syrian and non-resident Syrian shareholders.
2- Compensations and expenses related to the work of banks directly due to non-Syrian members of the board of directors and the technicians working for them.
3- A ratio of (50%) fifty percent of net wages, salaries and bonuses, and / 100% / one hundred percent of end-of-service indemnities owed to non-Syrian experts and technicians working in the bank.
4- The value of capital shares sold or refunded by non-Syrian and non-resident Syrian shareholders.
5- The proceeds of the liquidation of the bank’s capital that belong to non-Syrian shareholders.
6- Amounts owed by the bank and required to be paid and transferred abroad in foreign currencies.
Chapter 8
Prohibitions
Article / 18
/:
Banks are prohibited from doing the following:
A- Engaging in business, commercial, industrial and agricultural activities, or any other activity that has nothing to do with the financial and banking business and services permitted in this law.
B- Contributing to or participating in industrial, commercial, agricultural, service or tourism establishments.
C - Granting loans or banking facilities, whether directly or indirectly, to the chairman or members of the board of directors, the general manager / chief executive officer and their relatives up to the third degree, and their spouses and their relatives up to the second degree.
Chapter 9
Administration
Article / 19
/:
A- The Board of Directors is formed in accordance with the provisions of the Companies Law, in accordance with the standards of suitability and conformity approved by the Central Bank of Syria, and after its approval of the nominations of members.
B - The general manager or chief executive officer of the bank must have practical experience in the banking field or the field of microfinance according to the compatibility and conformity standards approved by the Central Bank of Syria, and he is appointed by the board of directors after obtaining the approval of the Central Bank of Syria.
C - It is not permissible for a person holding the position of an executive director, chief executive officer, general manager, assistant general manager, or director in the bank, to be a joint partner in individual companies, a member of the boards of a company, or a manager or an employee in another company or Any private business abuse.
D - Banks may conclude technical or administrative assistance contracts with any entity with banking experience or expertise in the field of microfinance, according to the provisions of the Companies Law, subject to the approval of the Central Bank of Syria and the Monetary and Credit Council.
Chapter 10
General and final provisions
Article / 20
/:
A- Private associations or institutions are prohibited from taking deposits or making loans for the purpose of conducting bank business.
B- Anyone who violates the provisions of Paragraph / A / of this Article from members of the board of directors, managers, representatives, or workers of private associations or institutions shall be punished with temporary detention and a fine equivalent to twice what it received from the public, and the association or private institution is obligated to return the money collected to its owners. .
Article / 21
/:
A- Subject to the provisions of Article 5 of this law, it is not permissible for any of the public entities to be a founder or a shareholder in banks.
B - The mechanism and method of transferring the ownership of shares of the public shareholding company in the existing banks, including the handling and regulation of all rights and obligations resulting from the participation in them, shall be regulated by a decision of the Prime Minister upon a proposal from the Monetary and Credit Council.
Article / 22
/:
Loan contracts and facilities documented by a written deed between the bank and the customer are considered among the executive documents stipulated in the Code of Procedure, and the provisions of Law No. 19 of 2014 shall be applied in all matters relating to these contracts.
Article / 23
/:
The Central Bank of Syria shall lay down a model for the bank’s statute in accordance with the provisions of this law.
It shall be issued by a decision of the Monetary and Credit Council, and the basic regulations of the banks and any amendment thereof shall be subject to the approval of the Monetary and Credit Council or whoever it authorizes.
Article / 24
/:
A- It is not permissible for a licensed bank to conduct its business unless the Central Bank of Syria issues a decision to register the bank in the register of banks, after making sure that the incorporation procedures have been completed in accordance with the provisions of this law.
B - The licensed bank must start its business within one year from the date of registration, and it may not assign the license to others in whole or in part, whether before or after commencing its business.
C - The bank’s license is considered null and struck off the bank’s registry in the event of a violation of the provisions of Paragraph B of this Article.
Article / 25
/: The
updated social banking financial institutions in accordance with the provisions of Legislative Decree No. 15 of 2007 and the Innovation Bank for Small and Micro Finance updated in accordance with the provisions of Law No. 9 of 2010 to reconcile their conditions and amend their basic systems in accordance with the provisions of this law within a period of two years starting From the effective date.
Article / 26
/:
In all that is not stipulated in this law, the provisions of Law No. 23 of 2002 and its amendments, which include the basic monetary system and the Central Bank of Syria Law, and Law No. 22 of 2005 and its amendments containing the Law of the Syrian Financial Markets and Securities Commission, shall apply. And Legislative Decree No. 33 of 2005 and its amendments, which include the creation of the Anti-Money Laundering and Terrorism Financing Authority, and Legislative Decree No. 43 of 2005 that regulates the insurance market.
Law No. 33 of 2007 containing the Trade Law, Legislative Decree No. 30 of 2010 containing the Banking Secrecy Law, and Legislative Decree No. 29 of 2011 and its amendments containing the Companies Law.
Article / 27
/:
The Monetary and Credit Board shall issue the necessary executive instructions to implement the provisions of this law, especially those related to licensing and registration procedures, including investigation and registration expenses, and the controls of the strategic partner of these banks and reconciling the situation with its provisions.
And that is within three months from the date of its implementation.
Article / 28
/:
Legislative Decree No. 15 of 2007, Paragraph / 3 / of Article / 8 /, Articles / 7 / and / of / 22 / and Paragraph / 4 / of Article / 15 / of Law No. / 9 / of 2010.
Article / 29
/:
This law shall be published in the Official Gazette.
Damascus 7-8-1442 Hijri corresponding to
20-2-2021
AD
.
President of the Republic
Bashar Al-Assad
