Circular No. 517: Amendment to the Central Office of Credit Risk System

Circular No. 517

To Banks, Financial Institutions, and Leasing Companies

We submit to you a copy of Intermediary Decision No. 12993 dated 30/1/2019 regarding the amendment of the system of the Central Office of Credit Risk attached to Basic Decision No. 7705 dated 26/10/2000, subject of Circular No. 75.

Beirut, January 30, 2019

Governor of the Bank of Lebanon

Riad T. Salam

Intermediary Decision No. 12993

Amendment to the System of the Central Office of Credit Risk Attached to Basic Decision No. 7705 dated 26/10/2000

The Governor of the Bank of Lebanon, Based on the Monetary and Loans Law, specifically Articles 147 and 179 thereof, Based on the provisions of Article 3 of the Law implemented by Decree No. 5439 dated September 20, 1982, Based on Basic Decision No. 7705 dated 26/10/2000 and its amendments regarding the system of the Central Office of Credit Risk, Based on the decision of the Central Council of the Bank of Lebanon taken at its meeting held on January 23, 2019,

Decides as follows:

Article One: The entire text of the "Loan Type Codes" table (01CTC) in Arabic and French attached to the system of the Central Office of Credit Risk subject of Basic Decision No. 7705 dated 26/10/2000 is hereby replaced by the new text attached to this Decision.

Article Two: This Decision shall be enforced upon its issuance.

Article Three: This Decision shall be published in the Official Gazette. Beirut, January 30, 2019

Governor of the Bank of Lebanon

Riad T. Salam

Bank of Lebanon Central Risk BANQUE DU LIBAN Situation of clients at the Central Risk Office

CTC01 Loan Type Codes

: 1a Medium and long-term loans for productive sectors (Basic Decision No. 6101 dated 8/2/1996), excluding those mentioned below. 11a: Loans granted in foreign currency to finance environmentally friendly projects outside the energy sector benefiting from interest subsidies (Basic Decision No. 7835 dated 2/6/2001). 12a: Loans granted in foreign currency to finance environmentally friendly projects in the energy sector benefiting from interest subsidies (Basic Decision No. 7835 dated 2/6/2001). 13a: Loans granted to finance environmentally friendly projects after the end of the interest subsidy period (Basic Decision No. 7835 dated 2/6/2001). 19a: Medium or long-term loans for productive sectors granted in foreign currency benefiting from the 2009 incentives (Article 10 bis of Basic Decision No. 7835 dated 2/6/2001). : 2a Residential loans (Basic Decision No. 6101 dated 8/2/1996). 29a: Medium or long-term residential loans granted in foreign currency benefiting from the 2009 incentives (Article 10 bis of Basic Decision No. 7835 dated 2/6/2001). 3a: Loans for productive sectors benefiting from interest subsidies (Basic Decision No. 7743 dated 2/1/2001), excluding those mentioned below. 3xa: Loans for productive sectors benefiting from interest subsidies converted to US Dollars (Basic Decision No. 7743 dated 2/1/2001), excluding those mentioned below. k3a: Loans for productive sectors benefiting from interest subsidies (Basic Decision No. 6116 dated 7/3/1996), excluding those mentioned below. k3xa: Loans for productive sectors benefiting from interest subsidies converted to US Dollars (Basic Decision No. 6116 dated 7/3/1996), excluding those mentioned below. 31a: Loans benefiting from interest subsidies granted by banks based on agreements signed between the Lebanese Republic and the "European Investment Bank". 32a: Loans granted by banks with funding from IFC or EIB or OPIC or AFD or AFESD and benefiting from interest subsidies. 33a: Loans granted in foreign currency against guarantee from IFC or EIB or OPIC or AFD or AFESD and benefiting from interest subsidies. 34a: Loans designated to finance working capital needs of tourist institutions and benefiting from interest subsidies. 35a: Loans granted to finance environmentally friendly projects and benefiting from interest subsidies (Basic Decision No. 7835 dated 2/6/2001). 35x: Loans granted to finance environmentally friendly projects and benefiting from interest subsidies converted to US Dollars (Basic Decision No. 7835 dated 2/6/2001). k35a: Loans granted to finance environmentally friendly projects and benefiting from interest subsidies (Basic Decision No. 6116 dated 7/3/1996). k35x: Loans granted to finance environmentally friendly projects and benefiting from interest subsidies converted to US Dollars (Basic Decision No. 6116 dated 7/3/1996). : 4a Loans granted in foreign currency against guarantee from "Kafalat S.A.L." and benefiting from interest subsidies (Basic Decision No. 7835 dated 2/6/2001). 49a: Loans granted in foreign currency against guarantee from Kafalat S.A.L. benefiting from the 2009 incentives and benefiting from interest subsidies (Article 10 bis of Basic Decision No. 7835 dated 2/6/2001).

: 5a Loans granted in foreign currency against guarantee from "Kafalat S.A.L." and benefiting from interest subsidies (Basic Decision No. 7835 dated 2/6/2001). 51a: Loans granted in foreign currency to finance environmentally friendly projects in the energy sector against guarantee from "Kafalat S.A.L." and benefiting from interest subsidies. : 6a Residential Savings/Loan Program (Basic Decision No. 6180 dated 31/5/1996) : 7a Other residential loans. : 8a Loans granted by banks with funding from IFC or EIB or OPIC or AFD or AFESD and not benefiting from interest subsidies. 89a: Loans granted by banks with funding from IFC or EIB or OPIC or AFD or AFESD benefiting from the 2009 incentives and not benefiting from interest subsidies (Article 10 bis of Basic Decision No. 7835 dated 2/6/2001). : 9a Loans granted in foreign currency against guarantee from IFC or EIB or OPIC or AFD or AFESD and not benefiting from interest subsidies. 99a: Loans granted in foreign currency against guarantee from IFC or EIB or OPIC or AFD or AFESD benefiting from the 2009 incentives and not benefiting from interest subsidies (Article 10 bis of Basic Decision No. 7835 dated 2/6/2001). : 0a Loans for productive sectors that have become within the extended repayment period and no longer benefit from interest subsidies. (Article 4 bis of Basic Decision No. 7743 dated 2/1/2001) 10a: Loans granted to cover 60% of the replacement value of buildings and equipment damaged by the July 2006 war (Article 9 of Basic Decision No. 6116 dated 7/3/1996) 09v: Other loans granted in foreign currency benefiting from the 2009 incentives (Article 10 bis of Basic Decision No. 7835 dated 2/6/2001). 22b: Private sector debt securities and related facilities (Basic Decision No. 7835 dated 2/6/2001). 3:b Debt bonds and similar instruments issued by the private sector benefiting from exemption from mandatory reserve obligations (Basic Decision No. 7835 dated 2/6/2001). : 1c Debtors under Credit Cards paid in monthly installments. 2:c Debtors under Charge Cards paid in a single payment at the end of the billing cycle. 1d: Customer debts factored or bad – Primary code 11740 in banks' status (Form 2010) – referring to debts for which the Banking Control Committee agreed to form a partial or full provision against them, and their balance is recorded in the Central Risk Office. 2d: Pending debts under repayment. 3d: Disputed debts – referring to debts before judicial authorities resulting from an ongoing dispute between the debtor and the creditor and not yet adjudicated. 1e: Commercial notes discounted with recourse 2e: Commercial notes discounted without recourse 3e: Purchased debt factoring operations (Factoring) with recourse. 4e: Purchased debt factoring operations (Factoring) without recourse. f: Leveraged buyout facilities. 0h: Small loans in Lebanese Lira granted directly by banks. 1h: Small loans in Lebanese Lira granted with approval of microfinance institutions. k1h: Small loans in Lebanese Lira granted with approval of microfinance institutions and funded by the Bank of Lebanon under Basic Decision No. 6116 dated 7/3/1996. 21h: Small loans in Lebanese Lira funded by facilities granted by banks to microfinance institutions. k21h: Small loans in Lebanese Lira funded by facilities granted by banks to microfinance institutions and funded by the Bank of Lebanon under Basic Decision No. 6116 dated 7/3/1996. 22h: Small loans in Lebanese Lira funded by facilities granted by banks to financial institutions. k22h: Small loans in Lebanese Lira funded by facilities granted by banks to financial institutions (Basic Decision No. 6116 dated 7/3/1996). 3h: Small loans in Lebanese Lira funded by financial institutions and granted by them or by microfinance institutions. i: Residential loans granted by the Housing Bank and funded by loans granted to it. ik: Residential loans granted by the Housing Bank (Basic Decision No. 6116 dated 7/3/1996). 09i: Residential loans benefiting from the 2009 incentives granted by the Housing Bank and funded by loans granted to it. 10i: Residential loans funded by loans granted to the Housing Bank according to Central Council Decision No. 16/26/10 dated 11/8/2010. 1if: Murabaha 2if: Ijara 3if: Salam sale (mostly agricultural products) 4if: Istisna 1ip: Mudaraba 2ip: Diminishing partnership iq: Qard Hasan (Good Loan) io: Other equity financing k: Debtors under receipts (Primary code 11800 in banks' status Form 2010). 1l: Leasing operations not benefiting from interest subsidies (Basic Decision No. 7540 dated 4/3/2000) 2l: Leasing operations benefiting from interest subsidies. lc: Letters of Credit 1lg: Bid bonds 2lg: Performance bonds 3lg: Cash bonds 4lg: Other bonds dp: Residential loans in Lebanese Lira granted based on the protocol signed between banks and the Ministry of Displaced Persons. dpk: Residential loans granted in Lebanese Lira based on the protocol signed between banks and the Ministry of Displaced Persons (Basic Decision No. 6116 dated 7/3/1996). jr: Residential loans in Lebanese Lira granted based on the protocol signed between banks and the Judges' Mutual Aid Fund (Basic Decision No. 7835 dated 2/6/2001). jrk: Residential loans granted in Lebanese Lira based on the protocol signed between banks and the Judges' Mutual Aid Fund (Basic Decision No. 6116 dated 7/3/1996). 1m: Residential loans in Lebanese Lira granted based on the protocol signed between banks and the "Voluntary Military Housing Agency" (Basic Decision No. 7835 dated 2/6/2001). k1m: Residential loans granted in Lebanese Lira based on the protocol signed between banks and the Voluntary Military Housing Agency (Basic Decision No. 6116 dated 7/3/1996). 2m: Residential loans in Lebanese Lira granted directly to the "Voluntary Military Housing Agency" (Basic Decision No. 7835 dated 2/6/2001). 3m: Residential loans granted by the Voluntary Military Housing Agency before 6/2/2009 which are transferred to banks (Basic Decision No. 7835 dated 2/6/2001). fs: Residential loans in Lebanese Lira granted based on the protocol signed between banks and the General Directorate of Internal Forces (Basic Decision No. 7835 dated 2/6/2001). fsk: Residential loans granted in Lebanese Lira based on the protocol signed between banks and the General Directorate of Internal Forces (Basic Decision No. 6116 dated 7/3/1996). sg: Residential loans in Lebanese Lira granted based on the cooperation protocol signed between banks and the General Directorate of Public Security (Basic Decision No. 7835 dated 2/6/2001). sgk: Residential loans granted in Lebanese Lira based on the cooperation protocol signed between banks and the General Directorate of Public Security (Basic Decision No. 6116 dated 7/3/1996). se: Residential loans in Lebanese Lira granted based on the cooperation protocol signed between banks and the General Directorate of State Security (Basic Decision No. 7835 dated 2/6/2001). sek: Residential loans granted in Lebanese Lira based on the cooperation protocol signed between banks and the General Directorate of State Security (Basic Decision No. 6116 dated 7/3/1996). ad: Residential loans in Lebanese Lira granted based on the cooperation protocol signed between banks and the Customs Administration (Basic Decision No. 7835 dated 2/6/2001). adk: Residential loans granted in Lebanese Lira based on the cooperation protocol signed between banks and the Customs Administration (Basic Decision No. 6116 dated 7/3/1996). 19n: Medium or long-term loans for productive sectors granted in Lebanese Lira and benefiting from the 2009 incentives (Article 10 bis of Basic Decision No. 7835 dated 2/6/2001). k19n: Medium or long-term loans for productive sectors granted in Lebanese Lira and benefiting from the 2009 incentives (Basic Decision No. 6116 dated 7/3/1996). d19n: Medium or long-term loans for productive sectors granted in foreign currency according to the conditions stipulated in the "or" paragraph of Article 10 bis of Basic Decision No. 7835 dated 2/6/2001 (Basic Decision No. 6116 dated 7/3/1996). 19x: Medium or long-term loans for productive sectors granted in Lebanese Lira and benefiting from the 2009 incentives and converted to US Dollars (Article 10 bis of Basic Decision No. 7835 dated 2/6/2001). k19x: Medium or long-term loans for productive sectors granted in Lebanese Lira and benefiting from the 2009 incentives and converted to US Dollars (Basic Decision No. 6116 dated 7/3/1996). 29n: Medium or long-term residential loans granted in Lebanese Lira and benefiting from the 2009 incentives (Article 10 bis of Basic Decision No. 7835 dated 2/6/2001). k29n: Medium or long-term residential loans granted in Lebanese Lira and benefiting from the 2009 incentives (Basic Decision No. 6116 dated 7/3/1996). 29x: Medium or long-term residential loans granted in Lebanese Lira and benefiting from the 2009 incentives and converted to US Dollars (Article 10 bis of Basic Decision No. 7835 dated 2/6/2001). k29x: Medium or long-term residential loans granted in Lebanese Lira and benefiting from the 2009 incentives and converted to US Dollars (Basic Decision No. 6116 dated 7/3/1996). 09n: Other loans granted in Lebanese Lira benefiting from the 2009 incentives. (Article 10 bis of Basic Decision No. 7835 dated 2/6/2001). k09n: Other loans granted in Lebanese Lira benefiting from the 2009 incentives (Basic Decision No. 6116 dated 7/3/1996). d09n: Other loans granted in foreign currency according to the conditions stipulated in the "or" paragraph of Article 10 bis of Basic Decision No. 7835 dated 2/6/2001 (Basic Decision No. 6116 dated 7/3/1996). 09x: Other loans granted in Lebanese Lira benefiting from the 2009 incentives and converted to US Dollars (Article 10 bis of Basic Decision No. 7835 dated 2/6/2001). k09x: Other loans granted in Lebanese Lira benefiting from the 2009 incentives and converted to US Dollars (Basic Decision No. 6116 dated 7/3/1996). 1ev: Loans granted in Lebanese Lira to finance environmentally friendly projects outside the energy sector not benefiting from interest subsidies (Basic Decision No. 7835 dated 2/6/2001). k1ev: Loans granted in Lebanese Lira to finance environmentally friendly projects outside the energy sector not benefiting from interest subsidies (Basic Decision No. 6116 dated 7/3/1996). d1ev: Loans granted in foreign currency to finance environmentally friendly projects outside the energy sector not benefiting from interest subsidies. 1xv: Loans granted in Lebanese Lira to finance environmentally friendly projects outside the energy sector not benefiting from interest subsidies and converted to US Dollars (Basic Decision No. 7835 dated 2/6/2001). k1xv: Loans granted in Lebanese Lira to finance environmentally friendly projects outside the energy sector not benefiting from interest subsidies and converted to US Dollars (Basic Decision No. 6116 dated 7/3/1996). 2ev: Loans granted in Lebanese Lira to finance environmentally friendly projects in the energy sector not benefiting from interest subsidies (Basic Decision No. 7835 dated 2/6/2001). k2ev: Loans granted in Lebanese Lira to finance environmentally friendly projects in the energy sector not benefiting from interest subsidies (Basic Decision No. 6116 dated 7/3/1996). d2ev: Loans granted in foreign currency to finance environmentally friendly projects in the energy sector not benefiting from interest subsidies. 2xv: Loans granted in Lebanese Lira to finance environmentally friendly projects in the energy sector not benefiting from interest subsidies and converted to US Dollars (Basic Decision No. 7835 dated 2/6/2001). k2xv: Loans granted in Lebanese Lira to finance environmentally friendly projects in the energy sector not benefiting from interest subsidies and converted to US Dollars (Basic Decision No. 6116 dated 7/3/1996). ag: Agricultural loans granted in Lebanese Lira to the protocol signed between banks and the Ministry of Agriculture. en: Loans granted in Lebanese Lira to debtors to construct or rehabilitate government buildings (Basic Decision No. 7835 dated 2/6/2001). o: Non-financial sector debt bonds not linked and purchased from banks (Primary code 15643 + 16804 in banks' status Form 2010). p: Residential loans granted in Lebanese Lira based on the protocol signed between banks and the "General Housing Establishment" (Basic Decision No. 7835 dated 2/6/2001). pk: Residential loans granted in Lebanese Lira based on the protocol signed between banks and the "General Housing Establishment" (Basic Decision No. 6116 dated 7/3/1996). 09p: Residential loans granted in Lebanese Lira based on the protocol signed between banks and the "General Housing Establishment" and benefiting from the 2009 incentives (Basic Decision No. 7835 dated 2/6/2001). 0q: Loans granted in Lebanese Lira against guarantee from "Kafalat S.A.L." from the "Kafat Ashjar" programs after the end of the support period. (Basic Decision No. 7835 dated 2/6/2001). 1q: Loans granted in Lebanese Lira against guarantee from "Kafalat S.A.L." and not benefiting from interest subsidies (Basic Decision No. 7835 dated 2/6/2001). 2q: Loans granted in Lebanese Lira against guarantee from "Kafalat S.A.L." and benefiting from interest subsidies (Basic Decision No. 7835 dated 2/6/2001). k2q: Loans granted in Lebanese Lira against guarantee from "Kafalat S.A.L." and benefiting from interest subsidies (Basic Decision No. 6116 dated 7/3/1996). 3q: Loans granted in Lebanese Lira to finance environmentally friendly projects in the energy sector against guarantee from "Kafalat" benefiting from interest subsidies (Basic Decision No. 7835 dated 2/6/2001). k3q: Loans granted in Lebanese Lira to finance environmentally friendly projects in the energy sector against guarantee from "Kafalat" and benefiting from interest subsidies (Basic Decision No. 6116 dated 7/3/1996). r: Loans granted in Lebanese Lira against guarantee from IFC or EIB or OPIC or AFD or AFESD and benefiting from interest subsidies. rk: Loans granted in Lebanese Lira against guarantee from IFC or EIB or OPIC or AFD or AFESD and benefiting from interest subsidies (Basic Decision No. 6116 dated 7/3/1996). s: Residential loans granted in Lebanese Lira directly to the "General Housing Establishment" designated for constructing buildings for low-income individuals (Basic Decision No. 7835 dated 2/6/2001). t: Loans granted in Lebanese Lira against guarantee from IFC or EIB or OPIC or AFD or AFESD and not benefiting from interest subsidies. td: Loans granted in foreign currency against guarantee from IFC or EIB or OPIC or AFD or AFESD and not benefiting from interest subsidies. u: Loans granted in Lebanese Lira for continuing studies in higher education institutions. uk: Loans granted in Lebanese Lira for continuing studies in higher education institutions (Basic Decision No. 6116 dated 7/3/1996). ud: Loans granted in foreign currency for continuing studies in higher education institutions. ict: Loans granted in Lebanese Lira to Lebanese doctors to purchase a tablet computer. rd: Loans granted in Lebanese Lira for research and development purposes in productive sectors. RDD: Loans granted in foreign currency for research and development purposes in productive sectors. cin: Loans in Lebanese Lira granted to entrepreneurs and innovators to establish new projects in the field of knowledge and creativity. cind: Loans granted in foreign currency granted to entrepreneurs and innovators to establish new projects in the field of knowledge and creativity. fr: Loans granted in Lebanese Lira for working capital needs. frd: Loans granted in foreign currency for working capital needs. ea: Loans granted in Lebanese Lira to finance Lebanese production of artistic works (Basic Decision No. 6116 dated 7/3/1996). ead: Loans granted in foreign currency to finance Lebanese production of artistic works (Basic Decision No. 6116 dated 7/3/1996). pp: Residential loans in Lebanese Lira granted based on the cooperation protocol between banks and the Fire Brigade - Basic Decision No. 7835 dated 2/6/2001 ppk: Residential loans in Lebanese Lira granted based on the cooperation protocol between banks and the Fire Brigade funded by the Bank of Lebanon under Basic Decision No. 6116 dated 7/3/1996 pkg: Loans granted in Lebanese Lira to build a public parking garage for the purpose of renting car parking spaces pkgd: Loans granted in foreign currency to build a public parking garage for the purpose of renting car parking spaces (Basic Decision No. 6116 dated 7/3/1996). cma: Residential loans in Lebanese Lira granted to employees of the Financial Markets Authority (Basic Decision No. 7835 dated 2/6/2001). cmak: Residential loans in Lebanese Lira granted to employees of the Financial Markets Authority (Basic Decision No. 6116 dated 7/3/1996). cca: Residential loans in Lebanese Lira granted to users of the Supervisory Committee of Insurance Bodies Basic Decision No. 7835 dated 2/6/2001). ccak: Residential loans in Lebanese Lira granted to users of the Supervisory Committee of Insurance Bodies (Basic Decision No. 6116 dated 7/3/1996). emh: Residential loans granted in foreign currency to expatriates to purchase or build a residence in Lebanon. (Basic Decision No. 6116 dated 7/3/1996). emp: Non-residential loans granted in foreign currency to expatriates to finance new projects in Lebanon. (Basic Decision No. 6116 dated 7/3/1996). ce: Loans granted in Lebanese Lira to industrial institutions to finance working capital against exports (Article 10 bis of Basic Decision No. 7835 dated 2/6/2001). ced: Loans granted in foreign currency to industrial institutions to finance working capital against exports (Article 10 of Basic Decision No. 6116 dated 7/3/1996). gb: Residential loans in Lebanese Lira granted based on the cooperation protocol between banks and the Beirut Municipality Police (Basic Decision No. 7835 dated 2/6/2001) gbk: Residential loans in Lebanese Lira granted based on the cooperation protocol between banks and the Beirut Municipality Police (funded by the Bank of Lebanon under Basic Decision No. 6116 dated 7/3/1996) 07p: Residential loans granted in Lebanese Lira after 7/2/2017 based on the protocol signed between banks and the "General Housing Establishment" (Basic Decision No. 7835 dated 2/6/2001). k07p: Residential loans granted in Lebanese Lira after 7/2/2017 based on the protocol signed between banks and the "General Housing Establishment" (funded by the Bank of Lebanon under Basic Decision No. 6116 dated 7/3/1996) 27n: Medium or long-term residential loans granted in Lebanese Lira after 7/2/2017 and benefiting from the 2009 incentives (Article 10 bis of Basic Decision No. 7835 dated 2/6/2001). k27n: Medium or long-term residential loans granted in Lebanese Lira after 7/2/2017 and benefiting from the 2009 incentives (funded by the Bank of Lebanon under Basic Decision No. 6116 dated 7/3/1996) 27x: Medium or long-term residential loans granted in Lebanese Lira after 7/2/2017 and benefiting from the 2009 incentives and converted to US Dollars (Article 10 bis of Basic Decision No. 7835 dated 2/6/2001). k27x: Medium or long-term residential loans granted in Lebanese Lira after 7/2/2017 and benefiting from the 2009 incentives and converted to US Dollars (funded by the Bank of Lebanon under Basic Decision No. 6116 dated 7/3/1996) 1x: Loans granted against commercial mortgage or machinery mortgage or goods mortgage not accepted by the Banking Control Committee. They shall be transferred to the "Other Tangible Guarantees" box, known as (ASR) in the "Declaration to the Central Risk Office – Direct Commitments", upon approval of the Banking Control Committee of the provided guarantee. 2x: Loans granted against assignment of advances contracts (marché sur avances). 1z: Other current account facilities. 2z: Other facilities in the form of direct bonds. 3z: Other facilities in the form of a fixed-term loan account.

Note:

• The loans mentioned above that benefit from...