Regulatory Alerts2025-08-29 | 13746Capital Adequacy Regulatory Framework for Banks Operating in Lebanon
The Central Bank of Lebanon has issued Interim Decision No. 13746 to temporarily reduce the Special Funds Preservation Reserve ratio below 2.5% for banks operating in Lebanon during 2023, 2024, and 2025, while mandating gradual replenishment per subsequent regulatory instructions. The decision suspends the application of Article Twelve bis until further notice and requires banks to submit quarterly liquidity ratio reports based on balance sheets as of March, June, September, and December, calculated individually and at the highest consolidated level. Enacted immediately upon issuance on August 29, 2025, and published in the Official Gazette, this framework amends key provisions of Basic Decision No. 6939 to enhance regulatory flexibility and reporting precision.
Circular No. 740
To Banks, Financial Institutions, and Supervisory Appointees
We enclose a copy of Interim Decision No. 13746 dated August 29, 2025, concerning the amendment of Basic Decision No. 6939 dated March 25, 1998 (the Regulatory Framework for the Capital Adequacy of Banks Operating in Lebanon), attached to Basic Circular No. 44.
Beirut, August 29, 2025
Governor of the Central Bank of Lebanon
Karim Saeed
Interim Decision No. 13746
Amending Basic Decision No. 6939 dated March 25, 1998
The Governor of the Central Bank of Lebanon, Pursuant to the Monetary and Loan Law, particularly Articles 70, 174, and 175 thereof, Pursuant to Basic Decision No. 6939 dated March 25, 1998, and its amendments concerning the Regulatory Framework for the Capital Adequacy of Banks Operating in Lebanon, Pursuant to the decision of the Central Bank Council adopted during its meeting held on August 27, 2025,
Has decided as follows:
Article One: The text of Item (5) of "Article Ten" of Basic Decision No. 6939 dated March 25, 1998 is repealed and replaced with the following text: « -5. Contrary to the provisions of Item (4) of this Article and exceptionally on a temporary basis, the ratio for "Special Funds Preservation Reserve" may be reduced below the required ratio (i.e., 2.5%) for the years 2023, 2024, and 2025, provided that this shortfall is gradually replenished in accordance with instructions to be issued by the Central Bank of Lebanon at a later date on this matter.»
Article Two: The text of Item (3) under the "First" paragraph of "Article Twelve bis" of Basic Decision No. 6939 dated March 25, 1998 is repealed and replaced with the following text: « -3. The application of the provisions of "Article Twelve bis" is suspended temporarily until further notice.»
Article Three: The text of Article Thirteen of Basic Decision No. 6939 dated March 25, 1998 is repealed and replaced with the following text: « Banks operating in Lebanon shall submit to the Supervisory Committee for Banks and to the Statistics and Economic Research Department at the Central Bank of Lebanon, quarterly, reports on liquidity ratios based on balance sheets as of the end of March, June, September, and December each year. These reports shall be prepared on both an individual and a consolidated basis at the highest level of consolidation where applicable.»
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Article Four: The text of Note One attached to Annex No. 1 of Basic Decision No. 6939 dated March 25, 1998 is repealed and replaced with the following text: «* The application of this Item is suspended temporarily until further notice, based on the mechanisms specified in the "First" paragraph of Article Twelve bis.»
Article Five: This decision shall take effect upon its issuance.
Article Six: This decision shall be published in the Official Gazette.
Beirut, August 29, 2025 Governor of the Central Bank of Lebanon
Karim Saeed