Impact of Government Banking Policies on Private Banks Competitiveness in Ethiopia From 1994-2015

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Addis Ababa University


This study is intended to review impact government banking policies and directives on private bank competitiveness from year 1994 to 2015. The study is done with the main objective of assessing effects of regulations on resource mobilization and allocation decisions of these private banks. To do so, the study employed qualitative research approach in order to get better and deep information. Besides, both primary and secondary data sources were used to examine the issue under discussion. To this end, review of different secondary data was administered. In addition, to better triangulate the study findings, interview with key informants was held. Drawing documentary study and data from the primary sources, various issues of government policies and directives was assessed. The study found out that despite progress, Private Banks in Ethiopia have challenges from government policies and directives which hinder their competitiveness. The empirical results show that, there is no equal playing field between private and state owned banks, to begin with, the NBE Bill is applicable only to private banks, Secondly public sector offices and enterprises are forced to work with CBE and also resources for condominium housing was mobilized only by the public owned CBE, so, this unequal treatment of private and state owned banks negatively affected private banks. Thus, government bodies should revisit some directives issued on private banks, encourage the participation of the private banks so as to play a vital role in the economy and private commercial banks should strive to expand and grow since, their share is significant in terms of branch networks and capital