Regulatory Alerts2004-08-26 | 8828Functioning of Islamic Banks in Lebanon
The Central Bank of Lebanon issued Basic Decision No. 8828 to regulate the operation, deposit contracts, and investment frameworks of Islamic banks in Lebanon. The decision mandates specific reserve requirements, including a minimum 10% annual deduction for an Investment Risk Reserve and a Profit Rate Reserve, while restricting fixed asset holdings to 30% of net own funds and investment portfolio allocations to 50%. It further prohibits real estate brokerage, caps financing exposures to affiliated entities at 30%, and requires prior regulatory approval for new Islamic financial products, ensuring alignment with Shariah principles and standard banking supervision.
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