Regulatory Alerts2000-10-18 | 7694Constitution of Provisions and Ratio of Net Liquid Shareholders Equity in Lebanese Pound
The Central Bank of Lebanon, through Governor Riad Tawfiq Salamah, issued Basic Decision No. 7694 (as amended by Interim Circular No. 73) requiring Lebanese banks to maintain a minimum 40% ratio of net liquid shareholders' equity in Lebanese pounds as cash and to establish detailed provisioning rules for doubtful and bad debts. The regulation mandates specific reclassification, rescheduling, and collateral valuation mechanisms, including temporary accounting treatments for debts affected by the July 2006 war and a dedicated interest-free reserve account to absorb liquidity shortfalls. It further establishes penalty interest for non-compliance, defines precise timelines for provision release and debt settlement, and grants the Banking Control Commission authority to approve exceptions and supervise implementation.