Regulatory Alerts2018-05-28 | 12814Central Bank of Lebanon Circular No. 493 Amending Decision No. 7156 on Lebanese Banks' Deposits, Investments, and Loans at Foreign Affiliated Institutions
The Central Bank of Lebanon issued Circular No. 493 to amend Decision No. 7156, imposing new regulatory requirements on Lebanese banks regarding their financial activities abroad. The amendment mandates that banks obtain prior approval from the Central Bank and its supervisory committee for any direct or indirect deposits, investments, or mandatory reserves held at foreign affiliated institutions. Additionally, the Central Bank reserves the authority to require banks to establish specific provisions against these foreign exposures.
Circular No. 493
For Banks
We refer you to Circular No. 12814 dated 28/5/2018 concerning the amendment of the Basic Decision No. 7156 dated 10/11/1998 (Deposits, Investments, and Loans of Lebanese Banks in Sister or Affiliated Banks and Institutions Abroad) attached to Basic Circular No. 57.
A copy of the Interim Decision No.
Beirut, on 28 May 2018
Governor of the Central Bank of Lebanon
Riad T. Salamah
Interim Decision No. 12814
Amending Basic Decision No. 7156 dated 10/11/1998 concerning the deposits, investments, and loans of Lebanese banks in sister or affiliated banks and institutions abroad
The Governor of the Central Bank of Lebanon,
Based on the Monetary and Loan Law, particularly Article 174 thereof,
And based on Basic Decision No. 7156 dated 10/11/1998 and its amendments concerning the deposits, investments, and loans of Lebanese banks in sister or affiliated banks and institutions abroad,
And based on the decision of the Central Council of the Central Bank of Lebanon taken in its session held on 16/5/2018,
Decides as follows:
The section "or" of Basic Decision No. 7156 dated 10/11/1998 Article 1: The following text is added to "" in Item (4) of Article 2:
« 4- The contributions, participations, investments, and mandatory deposits imposed by the laws, regulations, or relevant authorities (banking, financial...) in the host country, which are carried out directly or indirectly by:
- Branches of the Lebanese bank abroad.
- Banks, financial institutions, and investment funds in which the Lebanese bank holds a stake or participates abroad.
The concerned Lebanese bank shall inform the Central Bank of Lebanon and the Banking Supervision Committee of the details of the operations subject to Item (4) hereof, in order to obtain the approval of the Central Bank of Lebanon to carry them out, and this at its full responsibility.
The Central Bank of Lebanon may impose on the concerned Lebanese bank to form specific provisions against these contributions, participations, investments, or mandatory deposits. »
Article 2: This Decision shall be enforced upon its issuance.
Article 3: This Decision shall be published in the Official Gazette.
Beirut, on 28 May 2018
Governor of the Central Bank of Lebanon
Riad T. Salamah