Reforming Sudan’s Banking Sector: Dialogue Between Bank Owners and the Central Bank and the Test of Restructuring

Dr Marwa Fouad Qabbani
The meeting held by the Governor of the Central Bank of Sudan, Amna Mirghani, with representatives of bank owners to discuss efforts to develop the banking sector and the requirements for reform, governance, capital adequacy, and legislative and regulatory frameworks, is an indication of the importance of opening an institutional dialogue on the future of the banking system. This comes against the backdrop of the exceptional challenges imposed by the war and its repercussions for infrastructure, banking services and economic activity.
However, this initiative matters beyond regulatory requirements. It raises a fundamental question about the nature of the reform needed: do we merely need to increase banks’ capital and reorganise their financial positions, or do we need to rebuild an integrated banking model capable of restoring confidence, mobilising savings, financing production and leading the reconstruction process?
The war has exposed the fragility of several aspects of the banking sector, including damage to and the closure of numerous branches, service disruptions, challenges affecting databases and business continuity, and a decline in banking transactions and growing reliance on cash and informal channels. Banking sector reform has therefore become an economic necessity that extends beyond conventional banking remedies.
Capital adequacy is among the foremost issues requiring attention, particularly given the erosion of its real value from inflation and exchange-rate fluctuations. This makes it necessary to reassess banks’ financial soundness, asset quality, liquidity levels, non-performing assets and their capacity to withstand risks. In this context, the capital requirements set out in Regulatory Circular No. (4/2026) provide a starting point for reassessing the financial position of banks.
However, increasing capital should not become an end in itself or the sole criterion for assessing banks’ soundness. Recapitalisation should be linked to management reform, improved asset quality, and enhanced operational efficiency. Likewise, decisions on mergers, acquisitions and restructuring must be based on financial and economic studies, while taking into account the differing circumstances of individual banks and the financial capabilities of their shareholders, safeguarding the rights of depositors and shareholders, and preserving competition in the banking market.
Another important area deserving attention is corporate governance. A strong banking sector cannot be built without effective boards of directors, qualified executive management teams, and independent systems for auditing, risk management and compliance, alongside stronger disclosure, transparency and accountability. A bank’s soundness is not measured solely by the size of its capital, but also by the quality of its management and its ability to manage risks and safeguard depositors’ funds.
At the same time, restoring confidence stands out as the greatest challenge facing Sudanese banks. Citizens who have lost easy access to banking services need practical guarantees that transactions will continue uninterrupted, transfers will be processed promptly, accounts can be opened easily, and their money will remain accessible. This requires developing digital banking services, expanding the use of applications, electronic wallets, and point-of-sale terminals, and strengthening integration with national payment networks. It also calls for investment in cybersecurity, alternative data centres and disaster recovery plans.
Digital transformation is no longer merely a technological option; it has become essential to restructuring the banking sector and expanding financial inclusion, attracting savings and reducing transaction costs, particularly in areas where traditional banking infrastructure has been damaged.
Nevertheless, the real test of reform’s success will be banks’ ability to restore their role in financing economic activity. The sector needs to move beyond its current focus on liquidity management, money transfers and routine banking services towards financing productive sectors, particularly agriculture, industry, livestock, energy, transport, exports, and small and medium-sized enterprises.
This will require developing financing instruments, reviewing credit policies, providing appropriate guarantees, and expanding partnerships with development finance institutions and the private sector. It will also require designing long-term financing products suited to the nature of productive projects and the needs of reconstruction.
To translate the priorities discussed at the meeting between the Central Bank and bank owners into tangible results, I propose that the next phase should focus on ten key areas: conducting a comprehensive assessment of banks’ financial and operational positions; establishing a realistic timetable for increasing capital; examining options for mergers and restructuring; improving governance and disclosure; strengthening depositor protection; updating legislation; accelerating digital transformation; directing financing towards productive activities; strengthening risk management systems; and, finally, establishing performance indicators to measure banks’ contributions to economic recovery and financial inclusion.
The Central Bank should also establish a joint mechanism involving the Central Bank and bank representatives to oversee implementation of the reform programme, define responsibilities and timetables, and periodically measure progress, rather than relying solely on general understandings and consultative meetings.
Reforming the banking sector is a shared responsibility between the Central Bank, as the regulatory and supervisory authority, and the owners, boards of directors, and executive management teams of the banks. Successful reform also requires balancing regulatory requirements with the stability of banking institutions, so hastily implemented measures do not undermine banks’ ability to continue operating or compromise depositors’ rights.
Sudan needs more than banks that meet capital requirements. It needs financial institutions capable of restoring confidence, mobilising savings, financing investment and production, and providing a modern banking infrastructure that keeps pace with the demands of the digital economy.
The question that should guide the reform project, therefore, is not how many banks have increased their capital, but how many have become capable of restoring customer confidence, mobilising savings, financing the economy, and making a tangible contribution to reconstruction.
These are the criteria against which the success of Sudan’s banking sector reform should be measured.
Strategic Planning and Digital Transformation Expert

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