Fayda digital ID requirement for banking deferred for Ethiopians abroad

Ethiopian citizens living abroad have been granted a two-year waiver from a decision by the government for everyone to compulsorily use the Fayda digital ID for banking transactions.

The waiver was granted by the National Bank of Ethiopia (NBE) in a February 5 circular cited by Shega. The stated reason for the delay is to block potential foreign currency flows into the country.

A government policy introducing the mandatory use of the Fayda for all banking transactions went into effect early last month, beginning with the capital Addis Ababa.

The measure is to be extended to other major cities by July 1, and then the entire country from January 1, 2026. All existing bank accounts are expected to be linked to the Fayda ID by December 31, 2026.

The period of grace granted to Ethiopians living abroad means that they will only be required to present the Fayda ID for banking transactions from December 31, 2026.

Ethiopia announced the decision to make the Fayda ID mandatory for banking transactions last year, explaining that the move is intended to improve financial inclusion, enable banks to better verify their customers so as to reduce cases of banking fraud, ensure data security and make transactions more streamlined and protected.

Beyond requiring the Fayda for bank account opening, the NBE and the Ethiopia ID authority are also collaborating on using the digital ID as a tool for Know Your Customer (KYC) processes by financial and banking institutions.

The policy finds its pace within the broader context of Ethiopia’s digital government strategy and ongoing digital transformation efforts aiming to completely overhaul how public and private services are delivered or accessed across sectors. It is also believed that the policy will contribute in one way or the other to Ethiopia’s digital economy growth.

Article Topics

banking  |  biometrics  |  digital ID  |  Ethiopia  |  Ethiopia National ID Program (NIDP)  |  Fayda  |  identity verification  |  national ID