The Houthi militia issues a decision to loot 50 billion riyals from exchange companies
English - Wednesday 03 May 2023 الساعة 03:30 pm
Sana'a, NewsYemen, exclusive:
The Central Bank of Sana'a, which is under the authority of the Houthi militia - the Iranian arm in Yemen - issued a decision to raise the capital of exchange companies and facilities, and stipulated that 25% of the value of the capital should be deposited as a cash guarantee within a period of 8 months.
The Houthi militia decision, issued on April 30, 2023, decided to raise the capital of exchange companies operating local remittance networks, to one billion and 250 million riyals, and to pay a guarantee of 312 million riyals.
It also raised the capital of exchange companies to 500 million riyals, with a guarantee of 125 million riyals, and exchange facilities to 100 million riyals, with a cash guarantee of 25 million riyals.
There are 38 money transfer networks operating in the local market, 22 of which are affiliated with exchange companies operating in the liberated areas, and 16 transfer networks based in Sana'a and operating in all Yemeni governorates.
According to official data, the number of exchange offices and companies was estimated at more than 1,350 offices and companies, of which 800 were without licenses in 2017 compared to 606 in 2014.
Financial experts confirm that the Houthi militia's decision does not regulate the work of exchange companies, as much as it serves the Houthi militia to loot more money under the name of cash guarantee, which is not returned and does not fall under the deposit guarantee clause, since the law does not authorize exchange companies to receive customer deposits.
Bankers estimate that the total cash guarantee that the Houthi militia will receive from exchange companies and offices exceeds 50 billion riyals, and it has nothing to do with guaranteeing deposits compared to banks.
They explained that the financial guarantee that the Central Bank takes on exchange shops does not cover the funds deposited in accounts with money changers, because they are accounts that were established in violation of the provisions of the Money Exchange Work Law.
