Central Bank of Libya Circular 3/2023: Requirements for Board of Directors Membership in Banks

Central Bank of Libya P.O. Box 1103, Telegram Address: MasrafLibya - Tripoli, Libya

Reference Number / C.B.L. Circular | C.B.L. No. (03/2022) Date: 10 Jumaada al-Akhir 1444 AH Corresponding to: January 02, 2023 AD

To: Chairmen of the Boards of Directors of Banks Subject: Requirements for Serving on the Boards of Directors of Banks.

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With greetings,

Based on the provisions of Law No. (1) of 2005 concerning Banks and its amendments, and within the framework of the supervisory and oversight role exercised by the Central Bank of Libya on banks operating in Libya, particularly Articles 68, 69, and 70, which stipulate the aforementioned requirements set forth in the amended Banks Law. Referring to Circular No. (2010/13) issued on September 27, 2010, regarding the circulation of the Central Bank of Libya Board of Directors Resolution No. (20) of 2010 approving the Corporate Governance Guide for the Libyan Banking Sector. And referring to the periodic letter No. C.B.L. (2014/108), dated December 28, 2014, through which the modified forms required for candidates nominated for the position of (Board Member) were submitted. And in the context of the Central Bank of Libya's efforts to apply international best practices, and the Basel Committee on Banking Supervision's Core Principles for Effective Banking Supervision. Therefore, without prejudice to the requirements of the Corporate Governance Guide for the Libyan Banking Sector in this regard, we inform you of the issuance of the Central Bank of Libya's instructions updating the requirements for serving on the Board of Directors, as follows:

1. The candidate must not be a board member in any Libyan bank.
2. A court judgment must not have been issued against the candidate for an honor-related or breach-of-trust crime.
3. The candidate must not have previously been deprived of political or civil rights.
4. The candidate must not have previously been dismissed or removed by an administrative or judicial decision.
5. The candidate must not have previously been declared bankrupt.

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Central Bank of Libya P.O. Box 1103, Telegram Address: MasrafLibya - Tripoli, Libya

6. The candidate must not have previously held the position of board member, department manager, or general manager in an institution that was liquidated by a court decision.
7. The candidate must not have previously been suspended from work pursuant to Article (6/119) of the Banks Law (suspension of the general manager or bank's board due to violation of the Banks Law, regulations, and resolutions issued thereunder).
8. The candidate must not hold shares or stakes in commercial or banking companies exceeding the permitted ratios according to Central Bank of Libya instructions.
9. The candidate must not hold membership or partnership in an accounting and legal audit office, or practice as a certified public accountant.
10. The candidate must not manage a real estate valuation office or an engineering office.
11. The candidate or one of their relatives must not have a fourth-degree kinship connection with any board member or general manager of the bank for which the candidate is nominated as a board member or general manager.
12. The candidate must not be an agent or trustee for any related party holding shares in the institution.
13. The candidate must not have previously been convicted of committing a crime, whether inside or outside Libya.
14. The candidate must not have been prohibited from practicing trade, commercial activity, financial activity, or a profession requiring licensing, registration, delegation, or restriction of that practice, whether inside or outside Libya.
15. The candidate must not have previously shown unwillingness to comply with any laws, regulations, or instructions, or has previously assisted another person in violating the provisions of any laws, regulations, or instructions in any manner, or incited them to violate them.

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Central Bank of Libya P.O. Box 1103, Telegram Address: MasrafLibya - Tripoli, Libya

16. The candidate must not have previously been convicted of conducting any unauthorized or unlicensed activities, whether inside or outside Libya.
17. The candidate must not have previously been associated with any illegal activity related to banking operations, receiving deposits, or other financial or commercial transactions, whether inside or outside Libya.
18. The candidate must possess all scientific qualifications, practical experience, skills, and knowledge necessary to perform their duties as stipulated in the prevailing instructions.
19. The candidate must not have previously failed to meet their financial obligations, including loans and credit facilities with banks or financing companies upon maturity.
20. The candidate must not have previously failed to pay a due debt required to be paid pursuant to a court judgment or a decision issued by a specialized judicial committee.

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Central Bank of Libya P.O. Box 1103, Telegram Address: MasrafLibya - Tripoli, Libya

21. The candidate must not have previously filed for bankruptcy declaration, had a bankruptcy petition filed against them, been declared bankrupt, entered into any settlement with creditors, or undergone similar procedures.
22. The candidate must not have previously been a shareholder, board member, or manager in an institution that faced bankruptcy, liquidation, or receivership while they had a relationship with it or within one year after the termination of that relationship, whether inside or outside Libya.
23. The candidate must not be a shareholder, board member, or manager in an institution conducting similar or identical activities to the bank's operations in Libya.
24. Consideration shall be given to diversity in academic, financial, legal, and administrative specializations.
25. Regarding non-Libyans, a no-objection certificate from the central bank of the candidate's country must be provided to hold this position, as well as a certificate from their employer.

And as we forward these instructions for implementation, you are requested to attach a questionnaire for candidates for the position of (Board Member), ensuring compliance with the aforementioned requirements sufficiently before the bank's General Assembly meeting.

Peace be upon you,

Naji Mohammed Issa Director of the Banking and Monetary Supervision Department

Copies to:

• The Governor
• The Deputy Director of the Banking and Monetary Supervision Department
• The Deputy Director of the Banking and Monetary Supervision Department (Office Supervision & Compliance Monitoring)
• The Deputy Director of the Banking and Monetary Supervision Department (Inspection Affairs)
• The Deputy Director of the Banking and Monetary Supervision Department (Islamic Banking Affairs)
• The Banking Supervision Department, Benghazi

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