The Central Bank of Aden is unable to protect the money of Yemenis and the law from which it derives its strengthEnglish - Thursday 23 March 2023 الساعة 03:56 pm
The Sana'a Parliament, which is under the control of the Houthi militia - Iran's arm in Yemen, approved, on Tuesday, March 21, the "Prevention of Usurious Transactions" law, under which it regulated the laws regulating banks, and confiscated commercial banks' investments in government debt, and the rights and interests of Yemeni deposits, according to statements by banking experts.
At a time when the Prime Minister and the Governor of the Central Bank of Yemen, based in Aden, were celebrating the International Money Week, during which they urged the importance of financial education and savings programs for children and youth, and expressed their keenness on the stability of the banking system and the financial system.. The Houthis took away Yemeni banks and the legislation regulating their work , to a new reality that destroys what is left of confidence and resistance in the banking sector, and paves the way for individuals to withdraw their deposits from banks; Benefiting from the failure of the Central Bank of Aden to implement laws and restore its powers and functions over the past seven years.
Since the transfer of the headquarters and operations of the Central Bank of Yemen to Aden in September 2016, the bank, with its four successive leaders, has been unable to impose its control over its branches in the governorates, and over local banks in government-controlled areas and Houthi areas.
Banking experts confirm that the Central Bank of Aden failed to protect local banks and provide them with guarantees to transfer their headquarters from Sana'a to Aden, despite the power factors granted to it by the law, but it put obstacles in front of them and froze their assets, similar to what the Houthis did.
Within seven years, out of a total of 16 banks headquartered in Sanaa, the Cooperative and Agricultural Credit Bank - only - copied its management in the capital, Aden, but it is also not subject to the supervision and accountability of the Central Bank, and became famous for practicing corruption, disposing of bank deposits abroad, and failing to activate services and opening branches in the capital, Aden.
Bankers assert that the Houthi militia's goal of approving the "prevention of usurious transactions" law is to steal the rights of banks and depositors that have accumulated at the Central Bank in Sana'a over the past eight years, which will result in huge losses for local banks and individuals with investment bank accounts.
They explained that the enforcement of the new Houthi law froze the investments of commercial banks in government debt securities (Treasury bills), confiscated the profits of commercial banks and canceled a large part of the internal government debt owed to banks.
They pointed out that the Houthi law has undermined a number of laws, foremost of which is the Central Bank of Yemen law, the banking law, the microfinance law, and others.. and it will eliminate the remaining trust between Yemeni merchants and wealthy individuals in the banking system, and will work on a massive migration of financial flows from networks formal to informal networks.