Financial Sector in Sudan

The traditional banking system was inherited from the Anglo Egyptian condominium (1899-1955). When the National Bank of Egypt opened in Khartoum in 1901, it obtained a privileged position as banker to and for the government, a "semi-official" central bank. Other banks followed, but the National Bank of Egypt and Barclays Bank dominated and stabilized banking in Sudan until after World War II. Post-World War II prosperity created a demand for an increasing number of commercial banks. By 1965 loans to the private sector in Sudan had reached £Sd55.3 million.

Bank of Sudan
Before Sudanese independence, there had been no restrictions on the movement of funds between Egypt and Sudan, and the value of the currency used in Sudan was tied to that of Egypt. This situation was unsatisfactory to an independent Sudan, which established the Sudan Currency Board to replace Egyptian and British money. It was not a central bank because it did not accept deposits, lend money, or provide commercial banks with cash and liquidity. In 1959, the Bank of Sudan was established to succeed the Sudan Currency Board and to take over the Sudanese assets of the National Bank of Egypt. In February 1960, the Bank of Sudan began acting as the central bank of Sudan, issuing currency, assisting the development of banks, providing loans, maintaining financial equilibrium, and advising the government.

The aims of the Bank are as follows:
The main aims of the Bank of Sudan are to regulate issuance of currency and coins, to help regulate the banking system, the monetary and the credit systems in the Sudan. Moreover, work to ensure financial stability, to achieve economic development in the country in a systematic and a balanced fashion, to consolidate external currency stability, to be the bank of the government and its advisor in financial affairs. Therefore, the Law has facilitated the Bank to carry out its assigned roles as the following functions:

1- Issuance of paper currency and coins
2- Keeping government and government departments’ accounts
3- Managing external and internal public debt
4- Managing monetary policy
5- Carrying out researches and planning concerning the development of the banking system.
6- To be the Bank of banks keeping their reserves in safe custody, to be the lender of last resort, and to be a Clearing House
7- Managing credit as the Central Bank determines general and sector credit ceilings


Investment Banks
Financial Investment Bank
FIBA is the first bank in Sudan, which is specialized in dealing - in all types of financial products with the public, private and public institutions and companies, through capital markets mechanisms. It is founded in October 1997, commenced its activities on July 22-1998, and Listed at Khartoum Stock Exchange (KSE) in February 1999.

Commercial Banks
There were originally five major commercial banks (Bank of Khartoum, El Nilein Bank, Sudan Commercial Bank, the People's Cooperative Bank, and the Unity Bank) but the number subsequently grew. The public was dissatisfied with the commercial banks, however, because they were reluctant to lend capital for long-term development projects. Since Nimeiri government decreed the 1970 Nationalization of Banks Act, the Bank of Sudan has controlled all domestic banks. There are two types of Commercial Banks Government owned or Joint Ownership.

Government owned Banks
El Nilein Industrial Development Bank
El Nilein Industrial Development Bank Group (NIDB) came into being in 1993 as a result of merging two pioneer banking establishments, the former Industrial Bank of Sudan (a branchless specialized financial institution - established in 1961) and El Nilein Bank (a pioneer - commercial Bank with more than 40 branches spreading all over Sudan, established in 1964). The main objective of the new NIDB is to promote industrial development at large along with extending multi - faceted and full-fledged banking services to all other sectors.

Omdurman National Bank
Omdurman National Bank was founded in 1993 and provides banking services for both retail and corporate clients. The bank’s customers include Sudan citizens, expatriates and foreign investors. Together with a growing economy, it has seen its profits rise significantly in the past few years to become one of the leading banks in Sudan.

Islamic Cooperative Development Bank
Headquarter Khartoum, Sudan Date of establishment 1982, Commercial bank under banking law Ownership: Khartoum State (51%), Sehrian El Shamal (17%), Cooperative Sector (16%) the bank has a membership with (NENACRA).

The Islamic Cooperative Development Bank of Sudan provides two main facilities: agricultural financing (development) and commercial banking. Thereby cooperatives play an important part for the distribution of financing. It contributes to small projects of craftsmen, small producers and productive families by the management of a variety of funds. The credits consist of short, medium and long-term.

The other main involvement of the bank is the commercial banking activity including various types of deposits, transfers, letters of guarantee and credit, etc. The promotion of savings facilities is one of the main objectives of the bank. They also apply Islamic banking principles to the activities.

Beside several other banks, Farmers and Rural Development Bank, Ivory Bank & Animal Resources Bank.

Joint Ownership Banks
Al Baraka Bank
The bank is a member of Al Baraka Banking Group, established on 26/02/1984 & Inauguration on 14/03/1984. Head quarter Al Burj branch, Qasr Avenue, Khartoum, Sudan. Bank objectives are to conduct all banking and investment operations in accordance with Stipulations of Islamic Sharia.

Share Holders: Arab and Sudanese Investors. AL Baraka Bank is a pioneer in introducing electronic banking services in the Sudan. The first Sudanese bank to introduce Business Re - Engineering. The first Sudanese bank to introduce electronic signature and magnetic Cheques-system and to inter -link branches throughout the country.

Blue Nile Mashreg Bank
Blue Nile Mashreg Bank started its banking operation on October 1st 2003, as the result of a successful merger/Amalgamation of Blue Nile Bank (a local Sudanese bank) and MashreqBank– a branch of a foreign bank). MashreqBank-Khartoum is a branch of Mashreq Bank – Dubai. Established as per approval of Bank of Sudan in 1979 and started it’s operation in Sudan in 1980. It was 100% owned by MashreqBank – Dubai that was established in 1967 in Dubai, and a leading bank in the United Arab Emirates. Considered the largest local bank in UAE, providing a comprehensive range of International financial services and capable of handling all commercial banking and trade transactions efficiently.

Faisal Islamic Bank
The Faisal Islamic Bank, whose principal patron was the Saudi prince, Muhammad Bin Faisal Al Saud, established in Sudan 1977. The "open door" policy enabled Saudi Arabia, which had a huge surplus after the 1973 Organization of Petroleum Exporting Countries (OPEC) increases in the price of petroleum, to invest in Sudan.

In addition to the above-mentioned banks, there are several other banks such as, Tadamon Islamic Bank, Al Gharb Islamic Bank, National Bank of Sudan, Al Shamal Islamic Bank, Sudanese Islamic Bank, Sudanese French Bank& Saudi Sudanese Bank.

Foreign Banks
In 1974, to encourage foreign capital investment, foreign banks were urged to establish joint ventures in association with Sudanese capital. Banking transactions with foreign companies operating in Sudan were facilitated so long as they abided by the rulings of the Bank of Sudan and transferred a minimum of £Sd3 million into Sudan. Known as the "open door" policy, this system was partly a result of Nimeiri's disillusion with the left after the unsuccessful communist coup of 1971. Several foreign banks took advantage of the opportunity, most notably Citibank, the Faisal Islamic Bank, Chase Manhattan Bank, and the Arab Authority for Agricultural Investment and Development.

National Bank of Abu Dhabi
Khartoum Branch was established in 1976 and provides a full range of retail, commercial, and treasury banking services, with a focus on serving the Sudanese community working in GCC countries, financing top tier Sudanese corporate and multinational companies, and targeting UAE individuals and corporate with business in Sudan.

Mashriq Bank
Mashreq bank is one of the leading banks in the United Arab Emirates (UAE), with total assets as at 31st December, 2006, of AED 56,745 million (US$ 15,449 million), making it the largest private bank in the UAE. It is the second oldest Commercial Bank in the UAE having originally been established as Bank of Oman Ltd. in 1967 in Dubai.

Habib Bank
The Habib Bank Group is a leader in Pakistan's services industry. An extensive network of 1425 domestic branches – the largest in Pakistan – and 55 international branches has enabled HBL to provide comprehensive services that meet customer needs. This has ensured thriving client relationships that form the backbone of the Bank's operations.

Al-Salam Bank
Incorporated on 19 January 2006 in the Kingdom of Bahrain with a paid-up capital of BD 120 million (US$ 318 million), Al Salam Bank commenced commercial operations on 17 April 2006. The Bank operates under Islamic principles in accordance with regulatory requirements for Islamic banks set by the Central Bank of Bahrain.

Emirates and Sudan bank
Emirates and Sudan bank, is the largest capitalized bank in Sudan with an authorized capital of USD 200 Million. The bank offered its shares through an IPO in Sudan and UAE, which was welcomed enthusiastically by investors in both countries. The bank is head quartered in Khartoum, Sudan Syed Abdurrahman Street. The project office of the bank is currently operational in Dubai, UAE. The bank's founders include Islamic Development Bank, Dubai Islamic Bank, Sharjah Islamic Bank and Abu Dhabi Islamic Bank.

Specialized Bank
In addition, the government established numerous specialized banks, such as the Agricultural Bank of Sudan (1959) to promote agricultural ventures, the Industrial Bank of Sudan (1961) to promote private industry, the Sudanese Estates Bank (1966) to provide housing loans, and the Sudanese Savings Bank established to make small loans particularly in the rural areas. The system worked effectively until the late 1970s and 1980s, when the decline in foreign trade, balance-of-payments problems, spiraling external debt, the increase in corruption, and the appearance of Islamic banking disrupted the financial system.

Agricultural Bank of Sudan
The ABS is a specialized bank, which finances the country's main farming activities including irrigated farming, mechanized farming and traditional farming. It provides mainly (80% of the loan portfolio) seasonal loans for up to one year and medium-term financing exceeding one year. The ABS provides farmers with cash loans for farming and harvesting, and in-kind loans (75%) in the form of production inputs and requirements (fertilizer, burlap sacks, improved seeds, insecticides and farm machinery).

ABS's branches open current accounts, savings accounts, investment accounts, cash checks, process transfers and accept letters of guarantee and letters of credit.

ABS purchases and sells production inputs and handles the export of crops. One of the used Islamic lending methods is Al-Salam, which includes cash lending and in-kind repayment

Savings and Social Development Bank
Sudanese savings bank was inaugurated on the International Savings Day on 31 October 1974. It was changed into Savings and Social Development Bank in 1995 and became a sole property of the poor in Sudan. A board of trustees on behalf of the poor ran it. It exists in 13 states of the country. These states accommodate 30 branches of the bank and they are simple and are matching the prevailing surrounding social environment. The branches operate in the mentioned areas in order to achieve the following:
• To deal with the poor small-scale producers, craftsmen and productive families who lack funding; to mobilize resources for all the community members;
• To improve life conditions for the different sectors of the community;
• To establish communicative channels to deal with foreign and local organizations

In addition to the above-mentioned banks, we find also the Real Estate Bank & Workers National Bank.

Business in banking sector flourishes, because Sudan has turned around a struggling economy with sound economic policies and infrastructure investments. From 1997 to date, Sudan has been implementing IMF macroeconomic reforms. In 1999, Sudan began exporting crude oil and in the last quarter of 1999 recorded its first trade surplus, which, along with monetary policy, has stabilized the exchange rate. Increased oil production, revived light industry, and expanded export processing zones helped sustain GDP growth at 8.6%. In 2004, Agricultural production remains Sudan's most important sector, employing 80% of the work force, contributing 39% of GDP, and accounting for most of GDP growth.