Central Bank of Lebanon Circular No. 545: Amendments to Decision No. 6116 and Decision No. 7835 Regarding Reserve Requirements and Facilities

Circular No. 545

For Banks

A copy of the Interim Decision No. 13199 dated 25/2/2020 regarding the amendment of:

• The Basic Decision No. 6116 dated 7/3/1996 (Facilities that may be granted by the Central Bank of Lebanon to banks and financial institutions) attached to Basic Circular No. 23.
• The Basic Decision No. 7835 dated 2/6/2001 (Mandatory Reserves) attached to Basic Circular No. 84.

Beirut, February 25, 2020

Governor of the Central Bank of Lebanon

Riad T. Salam

Interim Decision No. 13199

Amendment of Basic Decision No. 6116 dated 7/3/1996 and Basic Decision No. 7835 dated 2/6/2001

The Governor of the Central Bank of Lebanon,

Pursuant to the Monetary and Loan Law, particularly Articles 174, 70, 76, and 79 thereof,

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,

Pursuant to Basic Decision No. 7835 dated 2/6/2001 and its amendment regarding mandatory reserves,

And based on the principle of continuity of the public service, relying on the powers returned to the Governor to ensure the operation of the Central Bank of Lebanon,

Decides as follows:

Article One: The text of paragraph (h) of item (1) of Article Nine of Basic Decision No. 7835 dated 2/6/2001 is repealed and replaced with the following text:

• h) Loans to Bank Al-Ahli Bank S.A.L. and used to finance housing loans granted by the latter, provided that the interest and commissions of any kind calculated on these housing loans do not exceed 20% of the yield of Lebanese Treasury bonds for a period of one year plus 3.45% annually.

Article Two: The text of paragraph (c) of item (6) of "Article Ten" of Basic Decision No. 7835 dated 2/6/2001 is repealed and replaced with the following text:
« -c) 80% of the balances of housing loans granted in Lebanese Lira before the date of 8/2/2017 to the General Establishment for Housing based on the protocol signed with the General Establishment for Housing, provided that the interest and commissions of any kind calculated on these loans do not exceed 20% of the yield of Lebanese Treasury bonds for a period of two years plus 1.6%, and 90% of the balances of these loans granted in Lira after the date of 7/2/2017, provided that the interest and commissions of any kind calculated on these loans do not exceed 10% of the yield of Lebanese Treasury bonds for a period of one year plus 2.35%, to be calculated annually from the date the loan is put into effect.»

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Article Three: The text of item (7) "first" of "Article Ten bis" of Basic Decision No. 7835 dated 2/6/2001 is repealed and replaced with the following text:

« 7- The interest and commissions of any kind calculated annually from the date the loan is put into effect shall not exceed the percentages specified in the following table:

Type of Loan | Maximum Interest and Commissions --- | --- Non-housing loans | 40% of the yield of Lebanese Treasury bonds for a period of one year plus 2.4% Housing loans granted before the date of 8/2/2017 exceeding 800,000,000 L.L. | 40% of the yield of Lebanese Treasury bonds for a period of one year plus 2% Housing loans granted before the date of 8/2/2017 not exceeding 800,000,000 L.L. | 40% of the yield of Lebanese Treasury bonds for a period of one year plus 3% Housing loans granted after the date of 7/2/2017 not exceeding 800,000,000 L.L. | 25% of the yield of Lebanese Treasury bonds for a period of one year plus 1.5% Housing loans granted after the date of 7/2/2017 exceeding 800,000,000 L.L. | 25% of the yield of Lebanese Treasury bonds for a period of one year plus 2.5%

Article Four: The text of the paragraph "eighth" of "Article Ten bis" of Basic Decision No. 7835 dated 2/6/2001 is repealed and replaced with the following text:
« eighth: The liabilities calculated on the basis of which mandatory reserves are calculated at a rate of 200% of the balances of loans granted in foreign currency that do not benefit from state interest subsidies, provided that the conditions stipulated in items (1) to (6) of the paragraph "first" or in the paragraph "second" of this article are met, and that the interest and commissions of any kind calculated on non-housing loans do not exceed the financing cost (Funds of Cost) plus 1.4%, and on housing loans the financing cost (Funds of Cost) plus 1%, to be calculated annually from the date the loan is put into effect, and this after obtaining individual approval from the Governor of the Central Bank of Lebanon regarding non-housing loans or approval from the Central Council of the Central Bank of Lebanon for the total amounts intended to be invested in housing loans, provided that the reduction applies for the duration of the loan from:

• The date of withdrawal if it was done after approval.
• The date of approval if the withdrawal was done before this approval, in the case where the loan was granted within the year 2009 before the date of enforcement of the provisions of Article Ten bis of this.»

Article Five: The text of all forms (IN), (-18IN), and (BDL-PB) attached to Basic Decision No. 6116 dated 7/3/1996 is repealed and replaced with the new text attached to this Decision.

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Article Six: Banks are granted a maximum deadline of 31/3/2020 to amend the interest rates according to the provisions of this Decision, for loans granted before the date of its issuance.

Article Seven: This Decision shall be enforced immediately upon its issuance.

Article Eight: This Decision shall be published in the Official Gazette.

Beirut, February 25, 2020

Governor of the Central Bank of Lebanon

Riad T. Salam

Central Bank of Lebanon – Financing Unit
Statement of Decision No. 6116 dated 7/3/1996 Basic Circular No. 23
Table No. IN

Serial No.	Category Code	Loan Type Code	Loan Description	Interest and Commission Rate
1	PRDB	k3a	Loans granted with guarantee from Kafalat S.A.L. for productive sectors benefiting from state interest subsidies, except loans granted in Lebanese Lira.	+ 1.075% of the yield of Lebanese Treasury bonds for two years
			Loans granted in foreign currency.	+ 7.075% of the 3-month LIBOR rate
2	RDEV	rd	Loans in Lebanese Lira for research and development in productive sectors.	0.75%
3	ENVE	ev2k	Loans in Lebanese Lira to finance environmentally friendly projects in the energy sector benefiting from state interest subsidies, where each exceeds 30 million Lebanese Lira.	3.75% minus 50% of the yield of Lebanese Treasury bonds for one year, provided the interest calculated annually does not fall below that calculated at the signing of the loan contract.
4	ENVB	k35a	Loans in Lebanese Lira to finance environmentally friendly projects benefiting from state interest subsidies, where each exceeds 30 million Lebanese Lira.	0.75% minus the interest on state debts, calculated annually.
5	INFE	d2ev	Loans to finance environmentally friendly projects in the energy sector financed by EIB and AFD, benefiting from state interest subsidies.	Margin of EIB and AFD + 0.5% + CBL commission + 3.75% minus (150% of the Treasury bond interest for one year)
			Loans to finance environmentally friendly projects to reduce pollution financed by the World Bank, benefiting from state interest subsidies.	Margin of World Bank + 0.5% + CBL commission + 3.75% minus (150% of the Treasury bond interest for one year)
6	WBEV	d2ev -d1ev	Non-housing loans granted in Lebanese Lira according to the conditions stipulated in item "first" of "Article Ten bis" of Basic Decision No. 7835 dated 2/6/2001.	n09k, n19k: 40% of the yield of Lebanese Treasury bonds for one year + 2.4%
7	IN09	k2q	Loans for productive sectors in Lebanese Lira with guarantee from Kafalat S.A.L. benefiting from state interest subsidies.	40% of the yield of Lebanese Treasury bonds for one year + 3.3%
8	KAFB
9	HIN9		Housing loans in Lebanese Lira granted according to the conditions stipulated in item "first" of "Article Ten bis" of Basic Decision No. 7835 dated 2/6/2001.	k29n: 40% of the yield of Lebanese Treasury bonds for one year + 3.2% (granted before 8/2/2017)
				k27n: 25% of the yield of Lebanese Treasury bonds for one year + 1.9% (granted after 7/2/2017, not exceeding 800,000,000 L.L.)
				k27n: 25% of the yield of Lebanese Treasury bonds for one year + 2.9% (granted after 7/2/2017, exceeding 800,000,000 L.L.)
10	HEPH	pk	Housing loans in Lebanese Lira granted based on the protocol signed with the General Establishment for Housing.	k07p: 20% of the yield of Lebanese Treasury bonds for two years + 1.6% (granted before 8/2/2017)
				k07p: 10% of the yield of Lebanese Treasury bonds for one year + 2.35% (granted after 7/2/2017)
11	HMLT	m1k	Housing loans in Lebanese Lira granted based on the protocol signed between banks and the Volunteer Military Housing Device.	2.128%
12	HJUR	jrk	Housing loans in Lebanese Lira granted based on the cooperation protocol signed between banks and the Judges' Mutual Aid Fund.	2.128%
13	HDPL	dpk	Housing loans granted to displaced persons based on the cooperation protocol signed between banks and the Ministry of Displaced Persons.	2.128%
14	HFSI	fsk	Housing loans in Lebanese Lira granted based on the cooperation protocol signed between banks and the General Directorate of Internal Security Forces.	2.128%
15	HDSG	sgk	Housing loans in Lebanese Lira granted based on the cooperation protocol signed between banks and the General Directorate of Public Security.	2.128%
16	EDUS	uk	Loans in Lebanese Lira granted to continue studies in higher education institutions.	3.5%
17	EVES	ev2k	Loans in Lebanese Lira exceeding 30 million L.L. each, benefiting from state interest subsidies to finance environmentally friendly projects in the energy sector.	0.75%
18	EVER	ev2k	Loans in Lebanese Lira exceeding 30 million L.L. each, benefiting from state interest subsidies to finance solar energy systems in rural areas at cost, in cooperation with UNDP.	0.75%
19	ENTP	cin	Loans in Lebanese Lira granted to entrepreneurs and initiators to establish new projects in the field of knowledge and creativity.	0.75%
20	HABT	ik	Housing loans in Lebanese Lira granted by Bank Al-Ahli.	3%
21	MICR	h1k, h21k, h22k	"Small loans" granted in Lebanese Lira with the approval of "Microfinance Institutions" and "Small loans" financed by loans granted in Lebanese Lira to these institutions or financial institutions.
22	ENVP	a35k	Loans to finance environmentally friendly projects to reduce pollution.	k1ev: Granted in Lebanese Lira or US Dollar benefiting from state interest subsidies and benefiting from the provisions of Article Nine bis of this Decision before 8/11/2016. 1.2% minus the yield of Lebanese Treasury bonds for two years for loans granted in Lebanese Lira, and 4.5% + LIBOR 3-month rate for others.
				k2ev -k1ev: Granted in Lebanese Lira benefiting from state interest subsidies. 3% minus 50% of the yield of Lebanese Treasury bonds for one year.
23	EVNE	k1ev	Loans granted in Lebanese Lira to finance the environmental part of environmentally friendly projects in non-energy sectors benefiting from state interest subsidies, provided the loan value does not exceed 30,000,000,000 L.L.	3.75% minus 50% of the yield of Lebanese Treasury bonds for one year, provided the interest calculated annually does not fall below that calculated at the signing of the loan contract.
24	KAFT	q2k	Loans for productive sectors in Lebanese Lira granted within the "Kafalat Ashjar" program benefiting from state interest subsidies.	3.5%
25	KAFE	q3k	Loans in Lebanese Lira to finance the environmental part of environmentally friendly projects in the energy sector, granted with the guarantee of "Kafalat" S.A.L., benefiting from state interest subsidies.	3.5%
26	GSSE	t	Loans granted in Lebanese Lira for productive sectors within the "Small Enterprises Guarantee" program mentioned in item (26) of "third" of Article Nine bis of this Decision.	6%
27	WRCP	fr	Working capital loans mentioned in item (27) of "third" of Article Nine bis of this Decision.	40% of the yield of Lebanese Treasury bonds for one year + 3.3%
28	HDSE	sek	Housing loans granted in Lebanese Lira based on the cooperation protocol signed between banks and the General Directorate of State Security.	2.128%
29	HADD	adk	Housing loans granted in Lebanese Lira based on the cooperation protocol signed between banks and the Customs Inspectorate.	2.128%
30	EVRE	k2ev	Loans granted in Lebanese Lira to support villages and rural areas to finance environmentally friendly projects in the energy and renewable energy sectors benefiting from state interest subsidies, where each exceeds 30 million L.L.	3.75% minus 50% of the yield of Lebanese Treasury bonds for one year, provided the interest calculated annually does not fall below that calculated at the signing of the loan contract.
31	EVRN	k2ev	Loans granted in Lebanese Lira to support villages and rural areas to finance environmentally friendly projects in the energy and renewable energy sectors benefiting from state interest subsidies, where each exceeds 30 million L.L.	3.75% minus 50% of the yield of Lebanese Treasury bonds for one year, provided the interest calculated annually does not fall below that calculated at the signing of the loan contract.
32	PLEA	ea	Loans granted in Lebanese Lira to finance Lebanese production of artistic works (films, cinematic and television, fictional or documentary or educational, or theatrical works).	3.75% minus 50% of the yield of Lebanese Treasury bonds for one year.
33	HPMP	ppk	Housing loans granted in Lebanese Lira based on the cooperation protocol signed between banks and the Fire Brigade.	2.128%
34	HGMB	gbk	Housing loans granted in Lebanese Lira based on the cooperation protocol signed between banks and the Beirut Municipality Guard Brigade.	2.128%
64	HIN9X	k27x, k29x	Housing loans granted according to the conditions stipulated in item "first" of "Article Ten bis" of Basic Decision No. 7835 dated 2/6/2001, converted to US Dollar.	k27x: Granted after 7/2/2017. k29x: Granted before 8/2/2017.
65	IN09X	x09k, x19k	Non-housing loans granted according to the conditions stipulated in item "first" of "Article Ten bis" of Basic Decision No. 7835 dated 2/6/2001, converted to US Dollar.
66	ENVEX	xv2k	Loans granted to finance environmentally friendly projects in the energy sector benefiting from state interest subsidies, where each exceeds 30 million L.L., converted to US Dollar.
67	ENVBX	xv1k	Loans granted to finance environmentally friendly projects benefiting from state interest subsidies, where each exceeds 30 million L.L., converted to US Dollar.
68	EVNEX	xv1k	Loans granted to finance the environmental part of environmentally friendly projects in non-energy sectors benefiting from state interest subsidies, provided the loan value does not exceed 30,000,000,000 L.L., converted to US Dollar.
69	PLEAX	xea	Loans granted to finance Lebanese production of artistic works (films, cinematic and television, fictional or documentary or educational, or theatrical works), converted to US Dollar.
70	PRDBX	k3xa	Loans for productive sectors benefiting from interest subsidies, converted to US Dollar.
71	KAFTX	k2xq	Loans granted in Lebanese Lira with guarantee from "Kafalat S.A.L." benefiting from state interest subsidies, converted to US Dollar.

Central Bank of Lebanon – Financing Unit
Statement of Decision No. 6116 dated 7/3/1996 Basic Circular No. 23
Table No. 18IN

Serial No.	Category Code	Loan Type Code	Loan Description	Interest and Commission Rate
9	HIN9	k27n	Housing loans in Lebanese Lira granted according to the conditions stipulated in item "first" of "Article Ten bis" of Basic Decision No. 7835 dated 2/6/2001.	k27n: 25% of the yield of Lebanese Treasury bonds for one year + 1.9% (exceeding 800,000,000 L.L.)
				k27n: 25% of the yield of Lebanese Treasury bonds for one year + 2.9% (not exceeding 800,000,000 L.L.)
10	HEPH	k07p	Housing loans in Lebanese Lira granted based on the protocol signed with the General Establishment for Housing.	10% of the yield of Lebanese Treasury bonds for one year + 2.35%
11	HMLT	m1k	Housing loans in Lebanese Lira granted based on the protocol signed between banks and the Volunteer Military Housing Device.	2.128%
12	HJUR	jrk	Housing loans in Lebanese Lira granted based on the cooperation protocol signed between banks and the Judges' Mutual Aid Fund.	2.128%
13	HDPL	dpk	Housing loans in Lebanese Lira granted based on the cooperation protocol signed between banks and the Ministry of Displaced Persons.	2.128%
14	HFSI	fsk	Housing loans in Lebanese Lira granted based on the cooperation protocol signed between banks and the General Directorate of Internal Security Forces.	2.128%
15	HDSG	sgk	Housing loans in Lebanese Lira granted based on the cooperation protocol signed between banks and the General Directorate of Public Security.	2.128%
20	HABT	ik	Housing loans in Lebanese Lira granted by Bank Al-Ahli.	3%
21	MICR	h1k, h21k, h22k	"Small loans" granted in Lebanese Lira with the approval of "Microfinance Institutions" and "Small loans" financed by loans granted in Lebanese Lira to these institutions or financial institutions.
26	GSSE	t	Loans granted in Lebanese Lira for productive sectors within the "Small Enterprises Guarantee" program mentioned in item (26) of "third" of Article Ten of this Decision.	6%
28	HDSE	sek	Housing loans granted in Lebanese Lira based on the cooperation protocol signed between banks and the General Directorate of State Security.	2.128%
29	HADD	adk	Housing loans granted in Lebanese Lira based on the cooperation protocol signed between banks and the Customs Inspectorate.	2.128%
33	HPMP	ppk	Housing loans granted in Lebanese Lira based on the cooperation protocol signed between banks and the Fire Brigade.	2.128%
34	HGMB	gbk	Housing loans granted in Lebanese Lira based on the cooperation protocol signed between banks and the Beirut Municipality Guard Brigade.	2.128%
35	PRDBD	k3a	Loans in US Dollar for productive sectors benefiting from interest subsidies, except loans granted with guarantee from Kafalat S.A.L.	7% + 15% of the (FFR) rate + 3-month LIBOR rate
36	INFED	d2ev	Loans in US Dollar to finance environmentally friendly projects in the energy sector financed by EIB and AFD, not benefiting from state interest subsidies.	Margin of EIB and AFD + 0.5% + CBL commission + Margin of Bank + 100% of (FFR) rate minus 2% (100% of the yield of certificates of deposit issued by CBL in US Dollar) *
37	WBEVD	d2ev -d1ev	Loans in US Dollar to finance environmentally friendly projects to reduce pollution, financed by the World Bank, benefiting from state interest subsidies.	Margin of World Bank + 0.5% + CBL commission + Margin of Bank + 100% of (FFR) rate minus (100% of the yield of certificates of deposit issued by CBL in US Dollar) *
38	RDEVD	rdd	Loans in US Dollar for research and development in productive sectors.	100% of the (FFR) rate
39	ENVED	ev2d	Loans in US Dollar to finance environmentally friendly projects in the energy sector benefiting from state interest subsidies, where each exceeds 20,000,000 USD, provided the loan value does not exceed 20,000,000 USD.	2.5% + 100% of (FFR) rate minus 50% of the yield of certificates of deposit issued by CBL in US Dollar *
40	ENVBD	k35a	Loans in US Dollar to finance environmentally friendly projects benefiting from state interest subsidies, where each exceeds 20,000,000 USD.	3% + 100% of (FFR) rate + 3-month LIBOR rate
41	IN09D	n09d, n19d	Non-housing loans granted in US Dollar according to the conditions stipulated in item "first" of "Article Ten bis" of Basic Decision No. 7835 dated 2/6/2001.	40% of the yield of certificates of deposit issued by CBL in US Dollar + 100% of (FFR) rate *
42	KAFBD	k2xq	Loans in US Dollar for productive sectors with guarantee from Kafalat S.A.L. benefiting from state interest subsidies.	15% + 100% of (FFR) rate
43	EDUSD	ud	Loans in US Dollar granted to continue studies in higher education institutions.	1.25% + 100% of (FFR) rate
44	EVESD	ev2d	Loans in US Dollar exceeding 20,000,000 USD each, benefiting from state interest subsidies to finance environmentally friendly projects in the energy sector.	100% of (FFR) rate
45	EVERD	ev2d	Loans in US Dollar exceeding 20,000,000 USD each, benefiting from state interest subsidies to finance solar energy systems in rural areas at cost, in cooperation with UNDP.	100% of (FFR) rate
46	ENTPD	cind	Loans in US Dollar granted to entrepreneurs and initiators to establish new projects in the field of knowledge and creativity.	100% of (FFR) rate
47	DENVP	d2ev -d1ev	Loans in US Dollar to finance environmentally friendly projects to reduce pollution, benefiting from state interest subsidies.	100% of (FFR) rate minus 2% (50% of the yield of certificates of deposit issued by CBL in US Dollar) *
48	EVNED	ev1d	Loans in US Dollar to finance the environmental part of environmentally friendly projects in non-energy sectors benefiting from state interest subsidies, provided the loan value does not exceed 20,000,000 USD.	2.5% + 100% of (FFR) rate minus 50% of the yield of certificates of deposit issued by CBL in US Dollar *
49	KAFTD	51a	Loans in US Dollar for productive sectors granted within the "Kafalat Ashjar" program benefiting from state interest subsidies.	100% of (FFR) rate + 2.25%
50	KAFED	51a	Loans in US Dollar to finance the environmental part of environmentally friendly projects in the energy sector, granted with the guarantee of "Kafalat" S.A.L., benefiting from state interest subsidies.	100% of (FFR) rate + 2.25%
52	WRCPD	frd	Working capital loans mentioned in item (27) of "third" of Article Ten of this Decision in US Dollar.	40% of the yield of certificates of deposit issued by CBL in US Dollar + 1.5% + 100% of (FFR) rate *
53	EVRED	ev2d	Loans in US Dollar to support villages and rural areas to finance environmentally friendly projects in the energy and renewable energy sectors benefiting from state interest subsidies, where each exceeds 20,000,000 USD.	2.5% + 100% of (FFR) rate minus 50% of the yield of certificates of deposit issued by CBL in US Dollar *
54	EVRND	ev2d	Loans in US Dollar to support villages and rural areas to finance environmentally friendly projects in the energy and renewable energy sectors benefiting from state interest subsidies, where each exceeds 20,000,000 USD.	2.5% + 100% of (FFR) rate minus 50% of the yield of certificates of deposit issued by CBL in US Dollar *
55	PLEAD	ead	Loans in US Dollar to finance Lebanese production of artistic works (films, cinematic and television, fictional or documentary or educational, or theatrical works).	2.5% + 100% of (FFR) rate minus 50% of the yield of certificates of deposit issued by CBL in US Dollar *
56	HCMA	cmak	Housing loans granted in Lebanese Lira to employees of the Capital Market Authority.	2.128%

• Applies throughout the loan period: Yield of certificates of deposit issued by the Central Bank of Lebanon in US Dollar for seven years if the original maturity of the loan is less than 10 years; Yield of certificates of deposit issued by the Central Bank of Lebanon in US Dollar for 10 years if the original maturity of the loan is 10 years or more.