Central Bank of Lebanon Circular No. 482

To Banks and Financial Institutions

We enclose a copy of Intermediary Decision No. 12742 dated 27/12/2017, which amends:

• The Basic Decision No. 6116 dated 7/3/1996 (Facilities that Banque du Liban may grant to Banks and Financial Institutions), attached to Basic Circular No. 23.
• The Central Office of Credit Risk System attached to Basic Decision No. 7705 dated 26/10/2000, subject of Basic Circular No. 75.

Beirut, December 27, 2017

Governor of Banque du Liban

Riad T. Salamé

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Intermediary Decision No. 12742

Amending Basic Decision No. 6116 dated 7/3/1996 and the Central Office of Credit Risk System attached to Basic Decision No. 7705 dated 26/10/2000

The Governor of Banque du Liban,

Pursuant to the Monetary and Loan Law, particularly Articles 174, 70, 79, and 99 thereof;

Pursuant to Basic Decision No. 6116 dated 7/3/1996 and its amendments regarding the facilities that Banque du Liban may grant to Banks and Financial Institutions;

Pursuant to Basic Decision No. 7705 dated 26/10/2000 and its amendments regarding the Central Office of Credit Risk System;

Pursuant to Basic Decision No. 7835 dated 2/6/2001 and its amendments regarding mandatory reserves;

Pursuant to the decision of the Central Council of Banque du Liban taken in its session held on 20/12/2017;

Has decided as follows:

Article 1: The text of item (26) of Section "Third" of Article 10 of Basic Decision No. 6116 dated 7/3/1996 is repealed and replaced by the following text:

"26 - 100% of the value of loans granted in Lebanese Lira to productive sectors under the 'Guarantee of Small Institutions' program (such as loans guaranteed by the Economic and Social Development Fund) which benefit from interest subsidies, provided that:

• The value of each does not exceed L.L. 75,000,000.
• Granted for a period not exceeding seven years, including a maximum grace period of one year.
• Do not benefit from the guarantee of 'Kafalat' S.A.L.
• Are not among the micro-loans referred to in Basic Decision No. 8779 dated 13/7/2004."

Article 2: The following text is added to item (39) of Section "Third" of Article 10 of Basic Decision No. 6116 dated 7/3/1996:

"39 - 100% of the value of loans granted in US Dollars to finance working capital for industrial institutions for the purpose of exporting their production, subject to the conditions specified in Section "Sixteenth" of Article 10 bis of Basic Decision No. 7835 dated 2/6/2001, provided that the value of the loan does not exceed USD 3,000,000."

Article 3: The text of item (1) of Section "Fifth" of Article 10 of Basic Decision No. 6116 dated 7/3/1996 is repealed and replaced by the following text:

"1 - Request for individual approval for each of the following loans, subject to Section "Third" of this Article: a) Loans specified in items (1) to (7) and in items (22), (30), (32), (37), (38), and (39). b) Loans specified in item (8) where each exceeds USD 1,000,000, and the corresponding item (27). c) Loans specified in item (23) where each exceeds USD 20,000.

Attached to this request:

• The loan contract signed between the concerned bank and the client, specifying the convertible guarantees provided by the latter.
• A technical verification report from the technical team of the Ministry of Environment regarding loans specified in item (22) of this Article.
• Documents related to the guarantees referred to in Section "Second" of this Article.
• Proof of the borrower's actual residence abroad (tax payment documents showing the borrower's address, electricity bills, etc.) regarding loans for expatriates.
• Documents proving the client's request for Lebanese nationality, when applicable, regarding loans for expatriates.
• Documents specified in Section "Sixteenth" of Article 10 bis of Basic Decision No. 7835 dated 2/6/2001 regarding loans specified in item (39) of Section "Third" of this Article.
• The repayment schedule form (CF-A18-IN) attached.
• Any other documents requested by Banque du Liban."

Article 4: The text of Table No. (18IN) attached to Basic Decision No. 6116 dated 7/3/1996 is repealed and replaced by the attached text.

Article 5: The text of the table "Loan Type Codes" (01CTC) in Arabic and French attached to the Central Office of Credit Risk System subject of Basic Decision No. 7705 dated 26/10/2000 is repealed and replaced by the new text attached to this Decision.

Article 6: This Decision shall be effective upon its issuance.

Article 7: This Decision shall be published in the Official Gazette.

Beirut, December 27, 2017

Governor of Banque du Liban

Riad T. Salamé

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Banque du Liban – Financing Unit Statement of Decision No. 6116 dated 7/3/1996 Basic Circular No. 23 Table No. 18IN

Serial No.	Loan Category Code	Loan Type Code	Loan Description	Interest Rate and Commission
9	HIN9	k27n	Housing loans in Lebanese Lira granted according to the conditions stipulated in Section "First" of Article 10 bis of Basic Decision No. 7835 dated 2/6/2001.	25% of the yield of Lebanese Treasury bills for 1 year + 2.9%
10	HEPH	k07p	Housing loans in Lebanese Lira granted based on the Protocol signed with the General Establishment for Housing Loans.	10% of the yield of Lebanese Treasury bills for 1 year + 3.2%
11	HMLT	m1	Housing loans in Lebanese Lira granted based on the Protocol signed between Banks and the Military Housing Device for Volunteers.	2.128%
12	HJUR	jr	Housing loans in Lebanese Lira granted based on the Cooperation Protocol signed between Banks and the Judges' Mutual Aid Fund.	2.128%
13	HDPL	dp	Housing loans in Lebanese Lira granted to expatriates based on the Cooperation Protocol signed between Banks and the Ministry of Displaced Persons.	2.128%
14	HFSI	fs	Housing loans in Lebanese Lira granted based on the Cooperation Protocol signed between Banks and the General Directorate of Internal Security Forces.	2.128%
15	HDSG	sg	Housing loans in Lebanese Lira granted based on the Cooperation Protocol signed between Banks and the General Directorate of General Security.	2.128%
3	HABT	7a	Housing loans in Lebanese Lira granted by Bank Al Maskan.	20%
21	MICR	h1, h21, h22	"Micro-loans" granted in Lebanese Lira with the approval of "Micro-lending Institutions" and "Micro-loans" financed by loans granted in Lebanese Lira to these institutions or to Financial Institutions.	-
26	GSSE	t	Loans granted in Lebanese Lira to productive sectors under the "Guarantee of Small Institutions" program referred to in item (26) of Section "Third" of Article 10 bis of this Decision.	6%
28	HDSE	se	Housing loans granted in Lebanese Lira based on the Cooperation Protocol signed between Banks and the General Directorate of the State.	2.128%
29	HADD	ad	Housing loans granted in Lebanese Lira based on the Cooperation Protocol signed between Banks and the Customs Authority.	2.128%
33	HPMP	ppk	Housing loans granted in Lebanese Lira based on the Cooperation Protocol between Banks and the Fire Brigade.	2.128%
34	HGMB	gbk	Housing loans granted in Lebanese Lira based on the Cooperation Protocol between Banks and the Beirut Municipality Guard Brigade.	2.128%
35	PRDBD	3a	Loans in US Dollars for productive sectors benefiting from interest subsidies, excluding loans granted with the guarantee of 'Kafalat' S.A.L.	15% of the (FFR) rate + Libor rate for three months + 7%
36	INFED	12a	Loans in US Dollars to finance environmentally friendly projects in the energy sector financed by the EIB and AFD, which benefit from state interest subsidies.	EIB and AFD margin + 0.5%<br>Commission of Banque du Liban + 2%<br>Bank margin + 100% of the (FFR) rate minus (100% of the yield of US Dollar certificates of deposit issued by Banque du Liban) *
37	WBEVD	a11, a12	Loans in US Dollars to finance environmentally friendly projects to reduce pollution financed by the World Bank, which do not benefit from state interest subsidies.	World Bank margin + 0.5%<br>Commission of Banque du Liban + 1%<br>Bank margin + 100% of the (FFR) rate minus (100% of the yield of US Dollar certificates of deposit issued by Banque du Liban) *
38	RDEVD	rdd	Loans in US Dollars for productive sectors / for research and development purposes.	100% of the (FFR) rate
39	ENVED	ev2d	Loans in US Dollars to finance environmentally friendly projects in the energy sector which benefit from state interest subsidies and where the value of each exceeds USD 20,000, provided that the value of a single loan does not exceed USD 20,000,000.	100% of the (FFR) rate + 2.5% minus (50% of the yield of US Dollar certificates of deposit issued by Banque du Liban) *
40	ENVBD	a35	Loans in US Dollars to finance environmentally friendly projects which benefit from state interest subsidies and where the value of each exceeds USD 20,000,000.	Libor rate for three months + 3%<br>100% of the (FFR) rate
41	IN09D	n09d, n19d	Non-housing loans granted in US Dollars according to the conditions stipulated in Section "First" of Article 10 bis of Basic Decision No. 7835 dated 2/6/2001.	100% of the (FFR*) rate + 1.5% + 40% of the yield of US Dollar certificates of deposit issued by Banque du Liban
42	KAFBD	5a	Loans in US Dollars for productive sectors with the guarantee of 'Kafalat' S.A.L. which benefit from interest subsidies.	5.5% + Libor rate for 1 year<br>100% of the (FFR) rate
43	EDUSD	ud	Loans in US Dollars granted to higher education institutions for study purposes.	100% of the (FFR) rate + 2.25%
44	EVESD	ev2d	Loans in US Dollars where the value of each exceeds USD 20,000,000 and which benefit from state interest subsidies to finance environmentally friendly projects in the energy sector.	100% of the (FFR) rate
45	EVERD	ev2d	Loans in US Dollars where the value of each exceeds USD 20,000,000 and which benefit from state interest subsidies to finance the purchase of solar energy systems in rural areas at cost price in cooperation with UNDP.	100% of the (FFR) rate
46	ENTPD	cind	Loans in US Dollars granted to entrepreneurs and innovators to create new projects in the field of knowledge and creativity.	100% of the (FFR) rate
47	DENVP	a11, a12	Loans to finance environmentally friendly projects to reduce pollution granted in US Dollars and which benefit from state interest subsidies.	100% of the (FFR) rate + 2% minus (50% of the yield of US Dollar certificates of deposit issued by Banque du Liban) *
48	EVNED	ev1d	Loans granted in US Dollars to finance the environmental part of environmentally friendly projects other than in the energy sector which benefit from state interest subsidies, provided that the value of a single loan exceeds USD 20,000,000.	100% of the (FFR) rate + 2.5% minus (50% of the yield of US Dollar certificates of deposit issued by Banque du Liban) *
49	KAFTD	5a	Loans for productive sectors in US Dollars granted under the "Kafalat Leasing" program and which benefit from state interest subsidies.	100% of the (FFR) rate + 2.25%
50	KAFED	51a	Loans in US Dollars to finance the environmental part of environmentally friendly projects in the energy sector granted with the guarantee of "Kafalat" S.A.L. and which benefit from state interest subsidies.	100% of the (FFR) rate + 2.25%
52	WRCPD	frd	Working capital loans referred to in item (27) of Section "Third" of Article 10 bis of this Decision in US Dollars.	100% of the (FFR*) rate + 1.5% + 40% of the yield of US Dollar certificates of deposit issued by Banque du Liban
53	EVRED	ev2d	Loans granted in US Dollars to support villages and rural areas to finance environmentally friendly projects in the energy and renewable energy sectors which benefit from state interest subsidies and where the value of each exceeds USD 20,000,000.	100% of the (FFR) rate + 2.5% minus (50% of the yield of US Dollar certificates of deposit issued by Banque du Liban) *
54	EVRND	ev2d	Loans granted in US Dollars to support villages and rural areas to finance environmentally friendly projects in the energy and renewable energy sectors which benefit from state interest subsidies and where the value of each exceeds USD 20,000,000.	100% of the (FFR) rate + 2.5% minus (50% of the yield of US Dollar certificates of deposit issued by Banque du Liban) *
55	PLEAD	ead	Loans granted in US Dollars to finance the production of Lebanese artistic works (cinematic or television films, novels or documentaries or educational, or theatrical works).	100% of the (FFR) rate minus (50% of the yield of US Dollar certificates of deposit issued by Banque du Liban) - 2.5%
56	HCMA	cma	Housing loans granted in Lebanese Lira to employees of the Financial Markets Authority.	2.128%
57	HCCA	cca	Housing loans granted in Lebanese Lira to users of the Insurance Authorities Supervisory Committee.	2.128%
58	HEMG	emh	Housing loans granted in US Dollars to expatriates.	1.25% + 100% of the (FFR) rate
59	PEMG	emp	Non-housing loans granted in US Dollars to expatriates.	2.25% + 100% of the (FFR) rate
60	PPKG	pkgd	Loans granted in US Dollars to build a public parking garage for the purpose of renting parking spaces.	2.25% + 100% of the (FFR) rate
61	WCEX	ced	Loans granted in foreign currency to industrial institutions to finance working capital against exports.	50% + 100% of the (FFR) rate + 3%

Depends on the entire loan duration: Yield of US Dollar certificates of deposit issued by Banque du Liban for seven years if the original loan maturity is less than 10 years; Yield of US Dollar certificates of deposit issued by Banque du Liban for 10 years if the original loan maturity is 10 years or more.

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Banque du Liban – Central Office of Credit Risk Loan Type Codes (CTC01)

1a: Medium and long-term loans to productive sectors (Basic Decision No. 6101 dated 8/2/1996), other than those mentioned below.

11a: Loans granted in foreign currency to finance environmentally friendly projects other than in the energy sector / benefiting from interest subsidies (Basic Decision No. 7835 dated 2/6/2001).

12a: Loans granted in foreign currency to finance environmentally friendly projects in the energy sector / benefiting from interest subsidies (Basic Decision No. 7835 dated 2/6/2001).

13a: Loans granted to finance environmentally friendly projects after the end of the interest subsidy period (Basic Decision No. 7835 dated 2/6/2001).

19a: Medium or long-term loans to productive sectors granted in foreign currency which benefit from 2009 incentives (Article 10 bis of Basic Decision No. 7835 dated 2/6/2001).

2a: Housing loans (Basic Decision No. 6101 dated 8/2/1996).

29a: Medium or long-term housing loans granted in foreign currency which benefit from 2009 incentives (Article 10 bis of Basic Decision No. 7835 dated 2/6/2001).

3a: Loans to productive sectors which benefit from interest subsidies (Basic Decision No. 7743 dated 2/1/2001), other than those mentioned below.

31a: Loans which benefit from interest subsidies and granted by banks based on agreements signed between the Lebanese Republic and the "European Bank for Reconstruction and Development".

32a: Loans granted by banks with financing from IFC or EIB or OPIC or AFD or AFESD and which benefit from interest subsidies.

33a: Loans granted in foreign currency against guarantee from IFC or EIB or OPIC or AFD or AFESD and which benefit from interest subsidies.

34a: Loans designated to finance working capital needs of tourist institutions which benefit from interest subsidies.

35a: Loans granted to finance environmentally friendly projects and which benefit from interest subsidies (Basic Decision No. 7835 dated 2/6/2001).

4a: Loans granted in foreign currency against guarantee from "Kafalat S.A.L." and / benefiting from interest subsidies (Basic Decision No. 7835 dated 2/6/2001).

49a: Loans granted in foreign currency against guarantee from Kafalat S.A.L. which benefit from 2009 incentives and / benefiting from interest subsidies (Article 10 bis of Basic Decision No. 7835 dated 2/6/2001).

5a: Loans granted in foreign currency against guarantee from "Kafalat S.A.L." and which benefit from interest subsidies (Basic Decision No. 7835 dated 2/6/2001).

51a: Loans granted in foreign currency to finance environmentally friendly projects in the energy sector against guarantee from "Kafalat S.A.L." and which benefit from interest subsidies.

6a: Housing Savings/Lending Program (Basic Decision No. 6180 dated 31/5/1996).

7a: Other housing loans.

8a: Loans granted by banks with financing from IFC or EIB or OPIC or AFD or AFESD and / benefiting from interest subsidies.

89a: Loans granted by banks with financing from IFC or EIB or OPIC or AFD or AFESD which benefit from 2009 incentives and / benefiting from interest subsidies (Article 10 bis of Basic Decision No. 7835 dated 2/6/2001).

9a: Loans granted in foreign currency against guarantee from IFC or EIB or OPIC or AFD or AFESD and / benefiting from interest subsidies.

99a: Loans granted in foreign currency against guarantee from IFC or EIB or OPIC or AFD or AFESD which benefit from 2009 incentives and / benefiting from interest subsidies (Article 10 bis of Basic Decision No. 7835 dated 2/6/2001).

0a: Loans to productive sectors which have entered the extended repayment period and no longer benefit from interest subsidies. (Article 4 bis of Basic Decision No. 7743 dated 2/1/2001).

10a: Loans granted to cover 60% of the replacement value of buildings and equipment damaged by the July 2006 war (Article 9 of Basic Decision No. 6116 dated 7/3/1996).

09v: Other loans granted in foreign currency and which benefit from 2009 incentives (Article 10 bis of Basic Decision No. 7835 dated 2/6/2001).

22b: Private sector debt securities and related lending (Basic Decision No. 7835 dated 2/6/2001).

3b: Debt bonds and similar instruments issued by the private sector benefiting from a reduction in mandatory reserve obligations (Basic Decision No. 7835 dated 2/6/2001).

1c: Credit card debts paid in monthly installments.

2c: Charge card debts paid in a single lump sum at the end of the billing cycle.

1d: Doubtful or bad debts - Sorting code 11740 in the Banks' situation (Form 2010). These are debts for which the Banks Supervision Committee has agreed to form a partial or full provision, and their balance is recorded in the Central Office of Credit Risk as principal and unrealized interest.

2d: Pending debts in the process of repayment.

3d: Disputed debts - These are debts before judicial authorities due to a dispute between the debtor and the creditor which has not yet been adjudicated.

1e: Commercial bills discounted with recourse.

2e: Commercial bills discounted without recourse.

3e: Debt securitization operations purchased (Factoring) with recourse.

4e: Debt securitization operations purchased (Factoring) without recourse.

f: Lending for leveraged buyouts.

1h: Micro-loans in Lebanese Lira granted with the approval of micro-lending institutions.

21h: Micro-loans in Lebanese Lira financed by lending granted by banks to micro-lending institutions.

22h: Micro-loans in Lebanese Lira financed by lending granted by banks to Financial Institutions.

3h: Micro-loans in Lebanese Lira financed by Financial Institutions and granted by them or by micro-lending institutions.

i: Housing loans granted by Bank Al Maskan and financed by loans granted to it.

09i: Housing loans benefiting from 2009 incentives granted by Bank Al Maskan and financed by loans granted to it.

10i: Housing loans financed by loans granted to Bank Al Maskan according to Central Council Decision No. 16/26/10 dated 11/8/2010.

1if: Murabaha

2if: Ijara

3if: Salam sale (mostly agricultural products)

4if: Istisna'a

1ip: Mudaraba

2ip: Diminishing partnership

iq: Qard Hasan (Good Loan)

io: Other nominal financing

k: Debtors under warehouse receipts (Sorting code 11800 in the Banks' situation Form 2010).

1l: Financing lease operations not benefiting from interest subsidies (Basic Decision No. 7540 dated 4/3/2000).

2l: Financing lease operations benefiting from interest subsidies.

lc: Documentary credits

1lg: Kafalat for bid participation

2lg: Kafalat for good performance

3lg: Cash Kafalat

4lg: Other Kafalat

dp: Housing loans in Lebanese Lira granted based on the Protocol signed between Banks and the Ministry of Displaced Persons.

jr: Housing loans in Lebanese Lira granted based on the Protocol signed between Banks and the Judges' Mutual Aid Fund.

1m: Housing loans in Lebanese Lira granted based on the Protocol signed between Banks and the "Military Housing Device for Volunteers" (Basic Decision No. 7835 dated 2/6/2001).

2m: Housing loans in Lebanese Lira granted directly to the "Military Housing Device for Volunteers" (Basic Decision No. 7835 dated 2/6/2001).

3m: Housing loans granted by the Military Housing Device for Volunteers before 6/2/2009 which are transferred to Banks (Basic Decision No. 7835 dated 2/6/2001).

fs: Housing loans in Lebanese Lira granted based on the Protocol signed between Banks and the General Directorate of Internal Security Forces (Basic Decision No. 7835 dated 2/6/2001).

sg: Housing loans in Lebanese Lira granted based on the Cooperation Protocol signed between Banks and the General Directorate of General Security (Basic Decision No. 7835 dated 2/6/2001).

se: Housing loans in Lebanese Lira granted based on the Cooperation Protocol signed between Banks and the General Directorate of the State (Basic Decision No. 7835 dated 2/6/2001).

ad: Housing loans in Lebanese Lira granted based on the Cooperation Protocol signed between Banks and the Customs Authority (Basic Decision No. 7835 dated 2/6/2001).

19n: Medium or long-term loans to productive sectors granted in Lebanese Lira and which benefit from 2009 incentives (Article 10 bis of Basic Decision No. 7835 dated 2/6/2001).

d19n: Medium or long-term loans to productive sectors granted in foreign currency according to the conditions stipulated in Section "First" of Article 10 bis of Basic Decision No. 7835 dated 2/6/2001.

29n: Medium or long-term housing loans granted in Lebanese Lira and which benefit from 2009 incentives (Article 10 bis of Basic Decision No. 7835 dated 2/6/2001).

09n: Other loans granted in Lebanese Lira and which benefit from 2009 incentives. (Article 10 bis of Basic Decision No. 7835 dated 2/6/2001).

d09n: Other loans granted in foreign currency according to the conditions stipulated in Section "First" of Article 10 bis of Basic Decision No. 7835 dated 2/6/2001.

1ev: Loans granted in Lebanese Lira to finance environmentally friendly projects other than in the energy sector / benefiting from interest subsidies (Basic Decision No. 7835 dated 2/6/2001).

d1ev: Loans granted in foreign currency to finance environmentally friendly projects other than in the energy sector / benefiting from interest subsidies.

2ev: Loans granted in Lebanese Lira to finance environmentally friendly projects in the energy sector / benefiting from interest subsidies (Basic Decision No. 7835 dated 2/6/2001).

d2ev: Loans granted in foreign currency to finance environmentally friendly projects in the energy sector / benefiting from interest subsidies.

ag: Agricultural loans granted in Lebanese Lira based on the Protocol signed between Banks and the Ministry of Agriculture.