The Supervisory Role of the Central Bank of Sudan over Banking Activities

Walid Dalil

The Central Bank of Sudan has issued an official warning about the spread of an unlicensed electronic financial application operating in areas under the control of the rebel Janjaweed militia (the Rapid Support Forces) in South Darfur State. The Bank confirmed that the entity in question holds no licence whatsoever to conduct financial or banking activities within Sudan.
In a statement, the Central Bank explained that it is the sole authority legally empowered to issue banking licences in accordance with the applicable laws and regulations. Any dealings with this entity or any platform or application associated with it constitute a clear violation of national laws, including the Anti-Money Laundering and Counter-Terrorism Financing Act of 2014.
The Central Bank urged citizens, as well as all official and corporate bodies, to refrain entirely from dealing with this entity or any of its fronts, whether inside or outside the country. It warned of serious risks associated with its use, including the absence of any legal recourse in cases of lost or compromised passwords or access data, and the lack of any guarantees in the event of misappropriation or infringement of deposited or transferred funds.
The Bank further cautioned that engaging with such applications violates international laws and conventions related to combating money laundering, terrorist financing, and the prevention of the financing of weapons proliferation. It reaffirmed its commitment to protecting the banking system and safeguarding citizens’ funds.
The supervisory role of the central bank constitutes a fundamental pillar in ensuring the soundness and stability of the banking and financial system. This role is exercised through the establishment of prudential rules, the licensing of activities, and on-site and off-site inspections of banks and financial institutions. Its objectives include protecting depositors’ funds, mitigating risks, and complying with international standards in order to promote price and financial stability.
Key aspects of the central bank’s supervisory role:
Prudential (regulatory) supervision:
This includes granting licences to banks and exchange companies, setting minimum capital requirements, and determining prudential ratios such as liquidity and capital adequacy.
On-site and off-site supervision:
This involves conducting on-site inspections of banks and reviewing their financial reports off-site to ensure the soundness of their financial positions and compliance with applicable laws.

Risk management:
Assessing asset quality, monitoring non-performing loans, and reviewing internal control systems to mitigate credit and operational risks.

Supervision of credit and exchange rates:
Regulating monetary policy, monitoring credit volumes, and managing foreign exchange reserves to ensure overall stability.

Enhancing supervisory practices:
Updating inspection methods in line with the standards of the Basel Committee on Banking Supervision. The central bank applies a risk-based approach to evaluating banks’ performance and, when necessary, determining corrective actions to safeguard overall financial stability.
The central bank’s supervisory mandate encompasses a set of preventive and remedial measures designed to ensure the integrity of the banking sector and the stability of the financial system. These measures span the following areas:
1. Prudential and regulatory supervision
Licensing: Controlling the entry of new institutions into the market and defining the scope of their permitted activities.
Setting standards: Requiring banks to comply with prudential ratios such as capital adequacy (in line with Basel standards) and liquidity indicators to ensure their ability to withstand sudden withdrawals.
Governance and management: Assessing the competence and integrity of bank leadership and ensuring adherence to sound governance principles.
2. On-site and off-site supervision
On-site inspections: Periodic visits to review financial and administrative operations and to assess asset quality, including loans and investments.
Off-site supervision: Analysing periodic financial reports and statements submitted by banks to identify gaps or potential risks.
3. Keeping pace with digital transformation and innovation (2025–2026 updates)
Cybersecurity: Strengthening banks’ operational resilience against growing cyber threats and ensuring the continuity of digital services.
Regulation of emerging technologies: Establishing supervisory frameworks for digital banks, cryptocurrencies, and the use of artificial intelligence in financial services to ensure responsible innovation.
4. Protection of depositors’ and customers’ rights
Financial inclusion: Expanding access to financial services across different segments of society while ensuring consumer protection against unfair practices.
Combating financial crime: Tightening oversight of money laundering and terrorist financing activities to preserve the integrity of the banking system.
5. Macro-risk management
Stress testing: Conducting regular stress tests (including those planned for 2026) to assess banks’ ability to withstand geopolitical shocks and severe economic volatility.

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