Central Bank of Sudan

After the Sudan obtained its independence, the necessity for having a Central Bank appeared in order to replace the bodies executing its functions which include organizing the issue of currency, formulating monetary and financing policies with the aim of directing finance to serve the economic sectors and build up of a strong, efficient and effective banking system to serve the needs of economic development in the country. The need for having a Central Bank increased after the adoption of the State at that time ambitious economic programs, which made it inevitable to produce monetary and finance policies to conform and match with these ambitious programs for the Sudanese economy.

To achieve that, a committee of three experts was constituted at the end of December, 1956 from the American Federal Reserve Bank to conduct an extensive study in this respect and to look in the possibility of establishing a Central Bank in the Sudan. After the Committee accomplished its study and raised its recommendations, the Bank of Sudan Act (1959) was issued and the Bank commenced its business on February, 1960 as an independent body, having its corporate personality, contracting capacity, a common seal and may litigate in its own name as prosecutor or defendant.

The Main Objectives of the CBOS

The adoption by a country of a particular economic system, may call for its Central Bank to carry out certain functions which differ substantially from those of  central banks in other  economic systems.

Each Central Bank, has its own Act specifying these   functions which  can be amended as deemed necessary.

In December, 2002, the Bank of Sudan Act, 2002 was issued wherein Section (6) specified the objects of the Bank as follows:

1. Issue currency of the types thereof, organize, control and supervise the same;
2. Issue monetary and financing policies, and manage the same, in consultation with the Minister (Minister of Finance and National Economy) in such way, as may achieve the national objectives of the national economy;
3. Organize banking business, monitor and supervise, strive to promote and develop and raise the efficiency thereof, in such way, as may achieve the balanced economic and social development;
4. Strive to achieve economic stability and the stability of the par value of the Sudanese Dinar;
5. Act, in its capacity as the bank of the  Government , as an advisor and agent thereof, in the monetary and financial affairs;
6. abide, in the discharge of the duties, achievement of the objects, exercise of the powers and supervision thereby, of the banking system, by the ordinances of the Islamic Sharia.

After concluding the Comprehensive Peace Agreement (CPA), the Central Bank of Sudan Act 2002 was amended in 2006, wherein the nature of the banking system, the Bank and its branches, were specified in Section (5) from the Act as follows:

1. The banking system in Sudan consists of a dual banking system, Islamic in the North and conventional in the South.
2. The main headquarters of the Bank shall be in Khartoum and the Bank may establish branches or agencies inside Sudan and nominate foreign correspondents.
3. Bank of Southern Sudan (BOSS) shall be established as a branch of the Central Bank to provide, in addition to its other functions, conventional banking services in Southern Sudan including licenses to the financial institutions according to the rules and regulations issued by the Board (The Board of the Central Bank of Sudan). The management of the Bank of Southern Sudan (BOSS) shall be assumed by one of the two deputies of the Governor and shall be accountable to the Governor on managing the conventional banking system in Southern Sudan as a window of the Bank’s windows according to its rules, regulations and policies.
4. The bank shall have an independent corporate personality, perpetual succession, a common seal and may litigate in its own name.

Also Section (6) of the Act, specified the main responsibilities of the Bank as follows:

The Bank shall have the following objectives:

1. Achieving stability of prices, maintaining stability of the exchange rate, efficiency of the banking system and issue of currency of the types thereof, organize, control and supervise the same;
2. Formulating and implementing monetary policy, depending on the first place on the market forces in such away to achieve the national objectives of the national macro economy in consultation with the Minister (Minister of Finance and National Economy);
3. Organize banking business, monitor and supervise, strive to promote and develop and raise the efficiency thereof, in such way, as may achieve the balanced economic and social development;
4. Act, in its capacity as the Government banker, as an advisor and agent thereof, in the monetary and financial affairs;
5. Abide in the discharge of the duties, achievements of the objects, exercise of the powers and supervision thereby, of the banking system, by the ordinances of Islamic Sharia and the conventional banking customs;