Regulatory Alerts2020-12-09 | 13298Addressing Banks’ Breaches Relating to the Marketing of Preferred Shares
The Central Bank of Lebanon issued Basic Decision No. 13298 to address banks' breaches in marketing preferred shares as interest-guaranteed to individual investors without adequate risk disclosure. The Decision mandates that affected banks pay the agreed profit rates to these customers, while non-compliant institutions must either establish a provision or a reserve with the Central Bank equivalent to three times their unpaid profits until settlement. This measure, enacted pending the Capital Market Authority's Penalty Committee appointment, subjects non-compliance to administrative penalties under Article 208 of the Monetary and Banking Law.
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