The traditional banking system was inherited from the Anglo-Egyptian condominium (1899-1955). When the National Bank of Egypt opened in Khartoum in 1901, it obtained a privileged position as banker to and for the government, a "semi-official" central bank. Other banks followed, but the National Bank of Egypt and Barclays Bank dominated and stabilized banking in Sudan until after World War II. Post-World War II prosperity created a demand for an increasing number of commercial banks.
Before Sudanese independence, there had been no restrictions on the movement of funds between Egypt and Sudan, and the value of the currency used in Sudan was tied to that of Egypt. This situation was unsatisfactory to an independent Sudan, which established the Sudan Currency Board to replace Egyptian and British money. It was not a central bank because it did not accept deposits, lend money, or provide commercial banks with cash and liquidity. In 1959, the Bank of Sudan was established to succeed the Sudan Currency Board and to take over the Sudanese assets of the National Bank of Egypt. In February 1960, the Bank of Sudan began acting as the central bank of Sudan, issuing currency, assisting the development of banks, providing loans, maintaining financial equilibrium, and advising the government.
In 1996, there were 27 banks in Sudan, of which one, El Nilein Industrial Development Bank, was state-owned. The Bank of Khartoum was privatized at the end of 1995. Banks were nationalized in 1970 but in 1974, foreign banks were allowed to open branches in Sudan.
In December 1990 the government decided to adopt Islamic banking principles. Seven banks in Sudan are based on the principles of Islamic banking that were introduced in September 1984, namely Faisal Islamic Bank of Sudan (FIBS), Islamic Cooperative Development Bank, Tadamun Islamic Bank of Sudan, Sudanese Islamic Bank, Al-Baraka Bank, Islamic Bank of Western Sudan, and Bank of Northern Sudan. In 1999, there were 14 commercial banks in Sudan.
Banks are required to maintain 20% of total deposits as a statutory reserve with the central bank. They must also direct to the agricultural sector 40% of the funds that they have for lending under the new credit ceilings.
The International Monetary Fund reports that in 2001, currency and demand deposits—an aggregate commonly known as M1—were equal to $1.0 billion. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $1.7 billion.
No stock exchange exists in the Sudan.