Regulatory Alerts2019-09-03 | 13101Facilities that may be granted by BDL to banks and financial institutions
The Central Bank of Lebanon issued Decision No. 10113 on September 3, 2019, to amend Decision No. 6116 regarding the facilities available to banks and financial institutions. The amendments introduce a 0.5% one-time commission for green loans, increase the housing loan limit for 2019 to 465 billion LBP, and allow the Housing Bank to receive support for residential loans until December 31, 2019. Additionally, the decision permits the rescheduling of non-residential loans converted to US dollars and updates the associated reporting forms.
Comprehensive Circular 524
For Banks and Financial Institutions
We enclose for you a copy of Decision No. 10113 dated 3/9/2019 regarding the amendment of Decision No. 6116 dated 7/3/1996 (The Facilities that may be granted by the Central Bank of Lebanon to Banks and Financial Institutions) attached to Basic Circular No. 23.
Beirut, on 3 September 2019
Governor of the Central Bank of Lebanon
Riad T. Salam
Decision No. 10113
Amendment of Decision No. 6116 dated 7/3/1996 Regarding the Facilities that may be granted by the Central Bank of Lebanon to Banks and Financial Institutions
The Governor of the Central Bank of Lebanon,
Pursuant to the Monetary and Loan Law, particularly Articles 70, 79, 99, and 174 thereof,
And pursuant to Basic Decision No. 6116 dated 7/3/1996 and its amendments regarding the Facilities that may be granted by the Central Bank of Lebanon to Banks and Financial Institutions,
And pursuant to the powers vested in the Governor to ensure the operation of the Central Bank of Lebanon based on the principle of continuity of the public service,
Decides as follows:
Article One: The text of Item (31) of "Section Two" of Article 11 bis of Basic Decision No. 6116 dated 7/3/1996 is repealed and replaced by the following text:
« 31- Loans granted in US Dollars to finance the working capital of industrial establishments for the purpose of exporting their production, in accordance with the conditions defined in "Section Six" of "Article 10 bis" of Basic Decision No. 7835 dated 2/6/2001, provided that the value of the loan does not exceed 5,000,000 US Dollars. »
Article Two: The text of the first paragraph of "Section Twelve" of Article 11 bis of Basic Decision No. 6116 dated 7/3/1996 is repealed and replaced by the following text:
« The Central Bank of Lebanon shall collect a one-time commission in US Dollars of 0.5% of the value of all green loans granted by banks under the provisions of this Article. »
Article Three: The text of paragraph (b) of Item (1) of "Section Fifteen" of Article 11 bis of Basic Decision No. 6116 dated 7/3/1996 is repealed and replaced by the following text:
« b - An amount of 465 billion Lebanese Lira regarding residential loans granted during the year 2019, provided that each bank grants these loans from the amounts deposited in its name in Lebanese Lira in a special liability account at the Central Bank of Lebanon resulting from US Dollar sales operations conducted with the Central Bank of Lebanon for this purpose. Residential loans granted in accordance with this mechanism shall not be included in the calculation of the 25% rate specified in Article 1 bis of Basic Decision No. 7776 dated 21/2/2001. »
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Article Four: The following text of "Section Sixteen" is added to Article 11 bis of Basic Decision No. 6116 dated 7/3/1996:
« Within the overall limits mentioned at the beginning of "Section Fifteen" of this Article, the Housing Bank may, for a period not exceeding 31/12/2019, receive support from the Central Bank of Lebanon against residential loans granted to customers and financed directly by it, in accordance with the conditions defined in "Sections Third", "Fourth", "Fifth", "Sixth", "Eleventh", and "Twelfth" and in Item (2) of "Section Fourth", "Fifth", "Sixth", "Seventh", "Eighth", "Ninth", and "Tenth" of this Article. »
Article Five: The text of Article 12 bis of Basic Decision No. 6116 dated 7/3/1996 is repealed and replaced by the following text:
« Non-residential loans subject to "Article 9 bis", "Article 10", and "Article 11 bis" of this Decision may be rescheduled if they are converted for this purpose from Lebanese Lira to US Dollars. »
Article Six: The text of all forms (IN), (-18IN), and (BDL-PB) attached to Basic Decision No. 6116 dated 7/3/1996 is repealed and replaced by the new text attached to this Decision.
Article Seven: This Decision shall take effect upon its issuance.
Article Eight: This Decision shall be published in the Official Gazette.
Beirut, on 3 September 2019
Governor of the Central Bank of Lebanon
Riad T. Salam