Sudan and South Sudan Agree on a Number of Banking Issues - Sudan Vision

The joint technical meetings between the delegations of the central banks of Sudan and South Sudan produced a number of important and practical meetings contributing to the realization of economic stability in Sudan and South Sudan.
The two delegations decided to continue their meetings in the South Sudan's capital of Juba on April 25.
The agreements between the central banks of both countries reached in Khartoum affirm the intent of the leadership of both countries to implement the cooperation agreements signed in Addis Ababa to serve the populations of Sudan and South Sudan.
Following the talks in Khartoum, the deputy governor of the central bank of South Sudan John Door said the joint committee has agreed on important issues and formed committees to study and review the issues that are in need of review.
He said: "It was agreed that commercial accounts be opened in both countries and encourage commercial banks to open mutual accounts to facilitate international trade, border trade, and commercial transfers."
He also said that some of the agreements that have been reached deal with assets and labor compensation and it was also agreed that the Central Bank of Sudan (CBOS) will supply technical support to the Central Bank of South Sudan.
He pointed out that subcommittees were formed to study subjects related to monetary and banking policies, exchange rate, banking monitoring policies, and the right of commercial banks to open branches in both countries.
These committees, he confirmed, will start their work as of today, Sunday and will continue their meetings regularly until they report back to the joint committee on its second meeting in Juba on April 25.
Door affirmed that the two countries will go on reaching agreements to implement and fulfill what was agreed upon in Addis Ababa and pointed out the positive economic effect the agreements will have on the economies of both countries. He added: "Opening accounts will help provide funds and foreign currency and facilitate transfers between individuals and institutions. We will implement what we agreed upon instantly."

He went on to say that the agreements will realize financial stability in Sudan and South Sudan in such a way as may contribute to the development process, minimize inflation, and stabilize exchange rates.
There are 20 banks in South Sudan, he added, 16 national ones and 4 foreign ones. The transactions between the two countries will be conducted in a way to be agreed upon later through a formula which will also be agreed upon later, but for the time being, transactions will be conducted in US Dollars.
For his part, deputy governor of the CBOS and head of the Sudanese delegation to the meetings Badr Aldin Mahmoud said the two parties have agreed on a methodology for the operation of the joint committee and determined the constants with which to run the meetings, form subcommittees, and report what is agreed upon, they also determined the topics of importance to both parties pertaining to joint cooperation between the central banks in both countries.
He said: "We started practically putting what we agreed upon in effect regarding the opening of accounts and transactions between the two central banks. Instant orders will be issued to commercial banks for transfers and swapping account key information considering that they are handled through the (switch) system. We also started achieving breakthroughs regarding some of the outstanding issues from the past period pertinent to the separation of assets and handing over documents and asset values to South Sudan to enable them to keep correct accords."
He added that they also agreed on resolving the issue of labor compensation and to supply technical support to the Central Bank of South Sudan in the areas needed.
Regarding the way in which Sudanese banks can operate in South Sudan; Mahmoud said a problem arose pertaining to Islamic banking system Sudanese banks use and added: "We have discussed the issue and presented suggestions for the committees to study including operating through outlets. A suggestion was discussed stating that Sudanese banks can function based on the participation principle common in the Islamic and traditional banking sectors in financing operations and the other banking operations; leaving the issue of interest rate in financing and investment operations as the only obstacle, but it can be solved through joint formulas or double outlets."
He pointed out that there are some South Sudanese banks operating in Sudan such as Ivory Bank and Sudanese banks operating in South Sudan such the Bank of Khartoum, Qatar Bank, and Abu Dhabi Bank.
He affirmed that cooperation between the two countries will have positive effects on the economies of both countries in what regards minimizing inflation, stabilizing exchange rates, activating commercial exchange, swapping benefits, and facilitating the movement of capital.
Regarding Sudan's foreign debt; he clarified that there is an agreement to deal with them where Sudan pays debt installments for two years while the two parties seek to cancel these debts with creditors and in case they are not wiped out the two countries will divide the debts between them according to known basis.
He said the two parties have agreed to preserve the rights of commercial banks and the rights of individuals in commercial banks and agreed on payment system from a technical point of view.
He also affirmed that the two delegations agreed on having joint foreign correspondents to handle the transactions regarding foreign commercial processes; especially facilitating the collection of Sudan's oil revenues and such.
He pointed out that there are issues of special nature for which a separate body of four members was formed to look into them; saying that there are issues where the two countries will need the cooperation of international institutions and the International Monetary Fund.