By Zahack Tanvir
The Central Bank of Egypt’s (CBE) recent decision to fine FAB Misr nearly $21 million has jolted Cairo’s financial establishment—and the aftershocks may not stop at Egypt’s borders.
Officially, the penalty was issued for violations of Article 104 of the banking law, citing FAB Misr’s alleged failure to monitor the purpose of credit facilities extended to Beltone Holding. But insiders and financial observers suggest a more complex, politically charged narrative is unfolding.
A Regulatory Ruling—or a Political Retaliation?
FAB Misr, the Egyptian arm of First Abu Dhabi Bank—the UAE’s largest lender—has strongly contested the fine, arguing that the loans in question were fully repaid and that its credit procedures were compliant.
What has raised eyebrows, however, is the abruptness and severity of the penalty, reportedly imposed without the usual procedural safeguards such as a formal review or right of reply.
Behind the scenes, the move is widely seen as the latest chapter in a long-running feud between current CBE Governor Hassan Abdalla and his predecessor, Tarek Amer. The two men have a storied history: Amer is said to have overseen investigations into Abdalla’s tenure at Arab African International Bank, which led to Abdalla’s ouster in 2018.
The current head of Beltone Holding, Dalia Khorshid—former investment minister and Amer’s spouse—adds a personal dimension to what many believe is a retaliatory strike cloaked in regulatory garb.
Investor Confidence Meets Cairo’s Power Politics
This perception of politicised regulation is troubling for Egypt’s investment climate. In a country already navigating a fragile economic recovery, high inflation, and a depreciating currency, investor confidence is a precious commodity.
The notion that regulatory decisions may be influenced by personal vendettas rather than institutional integrity could deter both regional and global investors.
The implications for Egypt’s Gulf relationships are particularly sensitive. The UAE has been a steadfast financial backer of Egypt, providing billions in aid, investments, and central bank deposits. A punitive move against a major Emirati bank—especially one perceived as unjust—risks straining this vital economic lifeline.
In a region where financial diplomacy is increasingly intertwined with strategic alignment, such tensions can have cascading effects.
Regional Ripples: From the Gulf to Mumbai and Tel Aviv
But the reverberations may extend even further. For non-Arab partners like India and Israel—both of which have deepening economic and strategic ties with Egypt—the episode serves as a cautionary tale.
India, a key investor in Egypt’s infrastructure and energy sectors, has been expanding its footprint in North Africa as part of its broader Indo-Pacific outreach.
Israel, meanwhile, views Egypt as a critical partner in regional stability and energy cooperation, particularly in the Eastern Mediterranean gas corridor.
For these nations, the FAB Misr case underscores the importance of regulatory predictability and institutional transparency in Egypt. While neither New Delhi nor Tel Aviv is directly implicated, the broader message is clear: foreign stakeholders must navigate not only market risks but also the undercurrents of domestic political rivalries.
Moreover, multilateral lenders and development institutions—many of which are closely monitoring Egypt’s economic reform trajectory—may view this incident as a red flag.
The IMF, which has extended multiple support packages to Cairo, has consistently emphasised the need for improved governance and institutional independence. Episodes like this could complicate Egypt’s efforts to secure future tranches or attract private-sector co-investment.
In the end, the FAB Misr fine is more than a regulatory footnote. It is a litmus test for Egypt’s financial governance and a signal to the region and beyond. Whether Cairo can reassure its partners that its institutions are insulated from personal politics will shape not only its economic recovery but also its standing in an increasingly interconnected Middle East.
Author: Zahack Tanvir, founder and editor of Milli Chronicle Media (UK), is an analyst and geopolitical commentator. He frequently appears on Indian and international media, offering insights on the Middle East, extremism, and the politics of South Asia. He posts under @ZahackTanvir.
Disclaimer: The opinions expressed within this article are the author’s personal opinions. The Australia Today is not responsible for the accuracy, completeness, suitability, or validity of any information in this article. The information, facts, or opinions appearing in the article do not reflect the views of The Australia Today, and The Australia Today News does not assume any responsibility or liability for the same.
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