History
In 1914, the Italian government authorized the Banca d'Italia, the Italian central bank, to carry out in the colonies operations forbidden to it in Italy, including commercial banking. Bankca d'Italia then established its branches in Asmara and Massawa. Two more banks followed: Banca Cooperativa Popolare Eritrea with its headquarters in Asmara was established in 1915, the Banca per l'Africa Orientale was established in 1917, with its head office in Massawa and a branch in Mogadishu (Somalia). These two private banks however collapsed just few years later.
By the end of the Italian colonial period in 1941, there were four banks and one credit union operating in Eritrea. These banks were: Banca d'Italia, Banco di Napoli, Banco di Roma, Banca Nazionale del Lavoro and Cassa di Credito Agrario e Minerario. These banks had 13 branches in six Eritrean cities: Asmara, Massawa, Keren, Adikeyh, Decamahare and Assab.
However, the banks mostly served the Italians and foreign businessmen (Armenians, Egyptians, Greeks, Indians, Yemenis) living in the colony. The arrival of the British military administration in Eritrea in 1941 started to change this situation. Barclays Bank established two branches in Eritrea, Asmara in 1941 and Massawa in 1942. In 1943, the British authorities permitted Banco di Napoli and Banco di Roma to reopen their branches.
Commercial banking continued in Eritrea during the federation with Ethiopia. In this period the Commercial Bank of Ethiopia had branches in Asmara (two offices), Massawa and Assab. Banco di Roma had branches in Asmara, Massawa, and Assab and Banco di Napoli had one branch in Asmara. However, Barclays Bank left the country.
In 1974, when the Dergue came to power, it nationalized all private sector establishments, including the banks. All banking services were merged under the Commercial Bank of Ethiopia, which monopolized the banking service.
After independence, the Commercial Bank of Ethiopia's branch in Eritrea became the Commercial Bank of Eritrea. The Eritrean government also established the Bank of Eritrea as its central bank.
Read more about this topic: Banking In Eritrea
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