New bank to be launched

A new bank is to be launched in Somalia by a group of Somali businessmen. The Universal Bank of Somalia (UBSOM) will be the first commercial bank to emerge since the collapse of the government of Muhammad Siyad Barre in 1990. Mahad Adan Barkhadle, the bank's acting general manager, told IRIN that it was "a joint venture between Somalis and foreign investors". Fifty-one percent of the bank's shares are owned by Somalis, representing all Somali clans, and 49 percent by foreign investors, he said. The main foreign investors were from, Belgium, Norway, Holland and Ireland. The bank's official headquarters will be in Brussels, with the operational headquarters in Dubai, while the main Somali branch will be in Mogadishu, Mahad told IRIN. He said the bank would also have branches in Hargeysa, the capital of the self-declared independent Republic of Somaliland, northwestern Somalia, and another in Bosaso, in the self-declared autonomous region of Puntland, northeastern Somalia. The bank would start with an operating capital of US $10 million and, when operational, would have relations with 62 corresponding banks in 72 countries around the world, Mahad said. "We will be able to provide all commercial banking activities, such as issuing of credit cards and letters of credit," he added. He said the bank would open its doors for business "in about a month's time". Once that happened, "Somalis from all walks of life will be able to buy shares". However, Mahmud Muhammad Ulusow, the governor of the Central Bank (CB) of the Transitional National Government (TNG), told IRIN that the proposed new bank did not exist as a legal entity. "There are procedures for the establishment of private financial institutions, and they have not followed them," he said. Ulusow said the CB was ready to cooperate with anyone - foreign or national - who wanted to set up business in the country, but "we have to stick to the laid-down procedures to protect the interest of the public from unscrupulous people". Mahad told IRIN that UBSOM would meet all the CB's requirements, and that he foresaw no problem in this context. "It is a simple misunderstanding, and we will resolve it before we start business," he said.