Facilities that may be granted by BDL to banks and financial institutions

Circular No. 557 To Banks and Financial Institutions

We enclose for your reference Decision No. 13229 dated May 27, 2020, amending Basic Decision No. 6116 dated March 7, 1996 (Facilities that may be granted by the Central Bank of Lebanon to banks and financial institutions), attached to Basic Circular No. 23.

Beirut, May 27, 2020 Governor of the Central Bank of Lebanon

Riad T. Safieh

Decision No. 13229 Amending Basic Decision No. 6116 dated March 7, 1996

The Governor of the Central Bank of Lebanon, based on the Monetary and Discount Law, particularly Article 70 thereof, and based on Basic Decision No. 6116 dated March 7, 1996 and its amendments regarding the facilities that may be granted by the Central Bank of Lebanon to banks and financial institutions, and in view of the current exceptional circumstances through which Lebanon is passing, which have significantly affected financing operations for importing essential food materials and raw materials used in the food industry, and based on the recommendations returned to the Governor with the aim of ensuring the operation of the Central Bank of Lebanon, relying on the continuity of public service, decides as follows:

Article 1: The following text is added to Basic Decision No. 6116 dated March 7, 1996 under "Article Fourteen-bis (3)": «Article Fourteen-bis (1-3): Banks operating in Lebanon may request from the Central Bank of Lebanon foreign currency to meet the needs of Lebanese importers and manufacturers of essential food materials and raw materials used in the specified food industries listed by the Ministry of Economy and Trade. 2. The procedure and conditions imposed for benefiting from this Article shall be determined by a decision issued by the Minister of Economy and Trade for this purpose. 3. The concerned banks shall submit the applications subject to this Article to the Financing Unit at the Central Bank of Lebanon after obtaining its approval from the Ministry of Economy and Trade. 4. The exchange rate for the foreign currency shall be determined in accordance with the practice applied in implementing "Article 7-bis" of Basic Decision No. 7548 dated March 30, 2000. 5. Banks must ensure, under their full responsibility, the proper application of the conditions stipulated in this Article and the objective for which they were established, under the risk of the Central Bank of Lebanon taking measures it deems appropriate, particularly obliging the non-compliant bank to deposit a special reserve yielding interest at the Central Bank of Lebanon, equivalent to the value of the amounts from which it has benefited.»

Article 2: This Decision shall be effective for one year from the date of its issuance.

Article 3: This Decision shall be published in the Official Gazette.

Beirut, May 27, 2020 Governor of the Central Bank of Lebanon

Riad T. Safieh