Central Bank of Lebanon Circular No. 521: Amendment of Decision No. 7776 on Credit, Investment, and Participation Operations

Circular No. 521

For Banks and Financial Institutions

Amendment to Decision No. 13087 dated 18/7/2019 regarding the amendment of Decision No. 7776 dated 21/2/2001 (Credit, Investment, Participation, and Joint Venture Operations) Attached to Circular No. 81

Beirut, July 18, 2019

Governor of the Central Bank of Lebanon

Riad T. Salamé

Decision No. 13087

Amending Decision No. 7776 dated 21/2/2001 (Credit, Investment, Participation, and Joint Venture Operations)

The Governor of the Central Bank of Lebanon,

Pursuant to the Monetary and Loan Law, particularly Articles 17, 70, and 182 thereof,

Pursuant to Decision No. 7776 dated 21/2/2001 and its amendments regarding Credit, Investment, Participation, and Joint Venture Operations,

Pursuant to the powers vested in the Governor to ensure the continuity of the Central Bank of Lebanon based on the principle of the continuity of public service,

Hereby decides as follows:

Article 1: The following text is added to Item (10) of Article 1 of Decision No. 7776 dated 21/2/2001:

"10. First: Banks and financial institutions are prohibited from granting or renewing credit to any institution or company whose annual business volume equals or exceeds 1.5 billion Lebanese Lira, subject to the following two conditions being met cumulatively:

• That audited financial statements (Balance Sheet, Income Statement, and Cash Flow Statement) have been obtained from the institution or company, such that the credit study is based on these statements.
• That these statements match those submitted to the Tax Administration.

Second: Banks and financial institutions that are in violation of the provisions of the 'First' paragraph of Item (10) above are granted a maximum deadline of 30/9/2020 to regularize the status of their clients' credit files. Banks and financial institutions must demand immediate repayment of any loan whose status has not been regularized within the aforementioned deadline, or deposit a special reserve in a non-interest-bearing frozen account at the Central Bank of Lebanon in the same currency as the loan granted, equivalent to its value until its status is fully regularized."

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Article 2: This Decision shall take effect upon its issuance.

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

Beirut, July 18, 2019 Governor of the Central Bank of Lebanon

Riad T. Salamé