Central Bank of Somalia - History

History

On 15 November 1920, the Banca d'Italia opened a branch at Mogadishu. This was the first bank of any sort in what is now Somalia. Then in 1938 Banco di Napoli established a branch in Mogadishu. (Banco di Napoli replaced Cassa di Risparmio di Torino, which had opened an office in Mogadishu in 1932).

In 1952 National Bank of India (NBI), which later merged with Grindlays Bank to form National and Grindlays Bank, established branches in Berbera and Hargeisa in British Somaliland. NBI was the first bank in British Somaliland and was the banker to the colonial government until British Somaliland joined Italian Somaliland to form the Somali Republic in 1960. After the unification, National and Grindlays opened a branch in Mogadishu.

Italian Somaliland was a region of the Italian East Africa (A.O.I.) and in 1940 there were five bank branches. Banca d'Italia had three, in Mogadishu, Kismayo, and Merca. Banco di Roma had two branches, one in Mogadishu and one in Merca. Banco di Napoli in Mogadishu. Both Banco di Roma and Banco di Napoli also had branches in Ethiopia, particularly in Eritrea.

On 1 July 1960, the newly independent Republic of Somalia established the Banca Nazionale Somala (National Bank of Somalia) to take over the activities of the Cassa per la Circulazione Monetaria della Somali and the Mogadishu branch of Banca d'Italia. The new bank combined central banking activities with commercial banking activities.

In 1968 the government merged the Credito Somalo (Somali Credit Bank), which the Italian administration had established in 1954, with the Banca Nazionale Somalo.

After the bloodless coup d'état of 1969 that saw Mohamed Siad Barre's ascension to power, the government in 1971 nationalized the four foreign banks - Banco di Roma, Banco di Napoli, and National and Grindlays Bank) - and combined them to form the Somali Commercial Bank. The government also established the Somali Savings and Credit Bank to take over the commercial branches of Banca Nazionale Somala and Banque de Port Said, leaving the Banca Nazionale Somala with only central banking functions. The Somali Savings and Credit Bank had branches in Baidoa, Beledweyne, Berbera, Bosaso, Burco, Galkacyo, Qardho, Hargeisa and Kismayo, and for a while in Djibouti. The Somali Savings and Credit Bank had been established with the technical assistance and aid provided by the Italian Savings Banks Association in the context of an overall cooperation policy of the European savings banks.

On 8 February 1975, the government renamed the Banca Nazionale Somala to the Central Bank of Somalia (Bankiga Dhexe ee Soomaaliya). It also merged the Somali Commercial Bank and Somali Savings and Credit Bank to form the Commercial and Savings Bank of Somalia, which was at the time the only bank in the country. In 1990 the Commercial and Savings Bank of Somalia discontinued operations. At some point the Central Bank of Somalia too ceased functioning.

In 2009 the recently-formed Transitional Federal Government re-opened the Central Bank of Somalia in Mogadishu as part of its campaign to restore national institutions. The Bank has an additional branch in Baidoa that is already operational with personnel in place.