In 1914, the Italian government authorized the Banca d'Italia, the Italian central bank, to operate under special regime and therefore to carry out in the colonies operations not allowed in Italy, including commercial banking.
[3] By the end of the Italian colonial period in 1941, there were four banks and one credit union operating in Eritrea.
These banks had 13 branches in six Eritrean cities: Asmara, Massawa, Keren, Adikeyh, Decamahare and Assab.
[4] 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.
In this period the Commercial Bank of Ethiopia had branches in Asmara (two offices), Massawa and Assab.
The Bank of Eritrea (BoE) is responsible for regulating lending and deposit interest rates while keeping a handle on inflation and other macroeconomic indicators.
[9] Primarily the bank was established to provide agricultural and commercial loans to investors.