Regulatory Alerts1998-11-10 | 7159Classification of Loan Risks
Banque du Liban issued Basic Decision No. 7159 mandating all Lebanese banks and financial institutions to implement dual debt risk classification systems: a standardized supervisory framework distinguishing performing from non-performing loans, and a customized internal grading system with at least ten risk tiers. The regulation requires institutions to establish robust internal governance, adopt credit rating or scoring methodologies, and conduct comprehensive borrower and facility assessments covering financial, managerial, sectoral, and external risk factors. Compliance is enforced through mandatory quarterly reporting via the eSTR/SEBIL system, alignment mapping between internal and supervisory grades, and administrative penalties for non-compliance, with a six-month implementation grace period.