Central Bank of Lebanon Circular No. 7926 Concerning Reserve Requirements, Statistics Reports, and Regulatory Rules for Bank Investments in Foreign Currencies

Central Bank of Lebanon
Circular No. 488

For Banks

We enclose a copy of Intermediary Decision No. 12773 dated 16/3/2018 concerning the amendment of:

• The Fundamental Decision No. 7835 dated 2/6/2001 (Mandatory Reserves) attached to Fundamental Circular No. 84.
• The Fundamental Decision No. 7858 dated 30/6/2001 (Statistical Reports) attached to Fundamental Circular No. 85.
• The Fundamental Decision No. 7935 dated 27/9/2001 (Application Rules for Fundamental Decision No. 7926 dated 20/9/2001 Concerning Bank Investments in Foreign Currencies) attached to Fundamental Circular No. 87.

Beirut, March 16, 2018

Governor of the Central Bank of Lebanon

Riad T. Salam

Intermediary Decision No. 12773

Amending Fundamental Decision No. 7835 dated 2/6/2001 Concerning Mandatory Reserves

The Governor of the Central Bank of Lebanon,

Pursuant to the Monetary and Discount Law, specifically Articles 146, 174, 70, 76, and 79 thereof,

Pursuant to Fundamental Decision No. 7835 dated 2/6/2001 and its amendments concerning mandatory reserves,

Pursuant to Fundamental Decision No. 7858 dated 30/6/2001 and its amendments concerning statistical reports,

Pursuant to Fundamental Decision No. 7935 dated 27/9/2001 and its amendments concerning the application rules for Fundamental Decision No. 7926 dated 20/9/2001 (Bank Investments in Foreign Currencies),

Pursuant to the decision taken by the Central Council of the Central Bank of Lebanon in its session held on 14/3/2018,

Decides as follows:

Article One: The text of Form (-011RO) attached to Fundamental Decision No. 7835 dated 2/6/2001 is repealed and replaced by the new text attached to this Decision.

Article Two: The text of Form (-1MMO) attached to Fundamental Decision No. 7858 dated 30/6/2001 is repealed and replaced by the new text attached to this Decision.

Article Three: The table attached to Fundamental Decision No. 7935 dated 27/9/2001 is repealed and replaced by the table (-10RO) attached to this Decision.

Article Four: This Decision shall take effect immediately upon its issuance.

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

Beirut, March 16, 2018
Governor of the Central Bank of Lebanon

Riad T. Salam

Central Bank of Lebanon
Directorate of Statistics and Economic Research Form No.: (1/5) -011RO Liabilities in Lebanese Lira Subject to Mandatory Reserves Average between _______________ and_________________ Bank Name: Number:
Values in Thousands of Liras

Code Name of Liabilities
Demand Liabilities
Time Liabilities
Total

20100 Other Non-Resident Issuing Institutions
20180 Less: Accrued Interest Not Yet Payable (Non-Resident) 20200 Non-Resident Commercial Banks 20250 Less: Credit Accounts for Debit Accounts (Non-Resident) 20280 Less: Accrued Interest Not Yet Payable (Non-Resident) 20300 Resident and Non-Resident Medium and Long-Term Credit Banks 20370 Less: Credit Accounts for Debit Accounts 20380 Less: Accrued Interest Not Yet Payable 20500 Registered Financial Institutions (Resident and Non-Resident) 20560 Less: Credit Accounts for Debit Accounts 20580 Less: Accrued Interest Not Yet Payable 23900 Other Financial Sector Institutions (Resident and Non-Resident) 23960 Less: Credit Accounts for Debit Accounts 23980 Less: Accrued Interest Not Yet Payable Z20800 Customer Deposits (Resident and Non-Resident) (1) 20871 Less: Documentary Credits for Import Guarantees 20890 Less: Credit Accounts for Debit Accounts 20895 Less: Accrued Interest Not Yet Payable 24300 Deposits from Credit Agreements (Resident and Non-Resident) 24301 Less: Accrued Interest Not Yet Payable 20900 Public Sector Deposits 20980 Less: Accrued Interest Not Yet Payable 21000 Payment Values (Resident and Non-Resident) 21210 Various Creditors - Private Sector (Resident) 21221 Various Creditors - Public Sector (Demand Accounts) 21225 Cash for Electronic Operations Guarantees 21300 Partners (Resident and Non-Resident) 21325 Less: Accrued Interest 21330 Less: Cash Advances for Covering Shortfalls in Reserves 21350 Less: Deposits for Increasing Own Funds 21700 Bonds and Similar Instruments (Resident and Non-Resident) 21748 Less: Accrued Interest Not Yet Payable (Fair Value through P&L) 21755 Less: Accrued Interest Not Yet Payable (Amortized Cost) 23000 Branches Abroad 23050 Less: Credit Accounts for Debit Accounts 23080 Less: Accrued Interest Not Yet Payable Z23100 Head Office, Parent Institution, Sister and Subsidiary Financial Institutions and Banks (Resident and Non-Resident) (excluding Resident Commercial Banks) 23150 Less: Credit Accounts for Debit Accounts 23180 Less: Accrued Interest Not Yet Payable Z24600 Bank Certificates at Fair Value through P&L (Resident and Non-Resident) (excluding those sold to Resident Commercial Banks) 24680 Less: Accrued Interest Not Yet Payable Z24700 Bank Certificates at Amortized Cost (Resident and Non-Resident) (excluding those sold to Resident Commercial Banks) 24780 Less: Accrued Interest Not Yet Payable 99999 Total Liabilities in Thousands of Lebanese Liras

(1) Excluding accounts from the Housing Savings/Borrowing Program and deposits from the Volunteer Military Housing Device which benefited from them prior to 20/10/2017. Intermediary Circular 475 dated 19 October 2017

Central Bank of Lebanon
Form No.: (2/5) -011RO

Bank Name: ___________________________ Number: ______________

Status as of Wednesday: _____________

Time Liabilities
(In Thousands of Lebanese Liras)

Allowed Deductions from Time Liabilities in Lira

A - Balances of Medium and Long-Term Loans
:“1 Medium and Long-Term Loans to Productive Sectors not listed below - Code “a” :“2 Housing Loans - Code “a” :“3 Loans benefiting from Interest Subsidies not listed below - Code “a” :“31 Loans to the Agreement signed between the Lebanese Republic and the European Bank for Reconstruction and Development - Code “a” :“32 Loans granted with financing from AFESD, AFD, OPIC, EIB, IFC benefiting from Interest Subsidies - Code “a” :“33 Loans granted in foreign currency against guarantee from AFESD, AFD, OPIC, EIB, IFC benefiting from Interest Subsidies - Code “a” :“34 Loans designated to finance working capital needs of Tourism Institutions benefiting from Interest Subsidies - Code “a” :“0 Loans to Productive Sectors that have entered the extended repayment period and no longer benefit from Interest Subsidies - Code “a” :“4 Loans granted in foreign currency against guarantee from Kafalat Company not benefiting from Interest Subsidies - Code “a” :“5 Loans granted in foreign currency against guarantee from Kafalat Company benefiting from Interest Subsidies - Code “a” :“8 Loans granted with financing from AFESD, AFD, OPIC, EIB, IFC not benefiting from Interest Subsidies - Code “a” :“9 Loans granted in foreign currency against guarantee from AFESD, AFD, OPIC, EIB, IFC not benefiting from Interest Subsidies - Code “a”

B - Bonds and Debt Securities
:“1 Bonds approved by the Central Bank of Lebanon, up to 80% of the purchase price - Code “b” :“2 Foreign Currency Debt Securities purchased and loans granted to Financial Institutions and Collective Investment Institutions for the exclusive purpose of purchasing Foreign Currency Debt Securities - Code “b” ⇒ Code “21b” Public Sector Debt Securities and related loans ⇒ Code “22b” Private Sector Debt Securities and related loans :“3 Private Sector Bonds benefiting from incentives - Code “b”

Total balances of loans, bonds, and securities benefiting from time liability deductions equivalent to (A + B)

Central Bank of Lebanon
Form No.: (3/5) -011RO

Bank Name: ___________________________ Number: ______________

Status as of Wednesday: _____________

Time Liabilities
(In Thousands of Lebanese Liras)

Allowed Deductions from Time Liabilities in Lira

C - Loans benefiting from time liability deductions equivalent to 200% of their balances − Code “19a” Balances of loans granted in foreign currency to Productive Sectors not listed below benefiting from 2009 incentives − Code “29a” Balances of housing loans granted in foreign currency benefiting from 2009 incentives − Code “49a” Balances of loans granted in foreign currency against guarantee from Kafalat Company not benefiting from Interest Subsidies and benefiting from 2009 incentives − Code “89a” Balances of loans granted with financing from AFESD, AFD, OPIC, EIB, IFC not benefiting from Interest Subsidies and benefiting from 2009 incentives − Code “99a” Balances of loans granted in foreign currency against guarantee from AFESD, AFD, OPIC, EIB, IFC not benefiting from Interest Subsidies and benefiting from 2009 incentives − Code “09v” Other loans granted in foreign currency benefiting from 2009 incentives

Total balances of loans benefiting from time liability deductions equivalent to 200% of (C) their balances

D - Loans benefiting from time liability deductions equivalent to 400% of their balances :“35 Loans granted to finance environmentally friendly projects benefiting from Interest Subsidies Code “a”

Total balances of loans benefiting from time liability deductions equivalent to 400% (D) of their balances

E - Loans benefiting from time liability deductions equivalent to 500% of their balances :“11 Loans granted in foreign currency to finance environmentally friendly projects outside the energy sector not benefiting from Interest Subsidies Code “a” :“12 Loans granted in foreign currency to finance environmentally friendly projects in the energy sector not benefiting from Interest Subsidies Code “a”

Total balances of loans benefiting from time liability deductions equivalent to 500% (E) of their balances

F - Loans benefiting from time liability deductions equivalent to 600% of their balances :“13 Loans granted to finance environmentally friendly projects after the end of the Interest Subsidy period Code “a”

Total balances of loans benefiting from time liability deductions equivalent to 600% of (F) their balances

2 (A + B) + (C x 2) + (D x 4) + (E x 5) + (F x 6) Total Deductions from Time Liabilities

Central Bank of Lebanon
Form No.: (4/5) -011RO

Bank Name: ___________________________ Number: ______________ Status as of Wednesday: _____________

Allowed Incentives from Mandatory Reserves (1) in Thousands of Lebanese Liras

G - Loan Balances Not Benefiting from 2009 Incentives ♦ Code “p” Housing Loans granted in Lira based on the Protocol signed with the General Establishment for Housing prior to 8/2/2017 ♦ Code “07p” Housing Loans granted in Lira based on the Protocol signed with the General Establishment for Housing after 7/2/2017 ♦ Code “0q” Loans granted in Lira within the “Kafalat Ashjar” program after the end of the subsidy period ♦ Code “1q” Loans granted in Lira against guarantee of “Kafalat Company” not benefiting from Interest Subsidies ♦ Code “2q” Loans granted in Lira against guarantee of “Kafalat Company” benefiting from Interest Subsidies ♦ Code “3q” Loans granted in Lira to finance environmentally friendly projects in the energy sector against guarantee of “Kafalat Company” benefiting from Interest Subsidies ♦ Code “r” Loans granted in Lira against guarantee from AFESD, AFD, OPIC, EIB, IFC benefiting from Interest Subsidies ♦ Code “i” Housing Loans financed by loans granted in Lira to the Housing Bank ♦ Code “s” Loans granted in Lira directly to the General Establishment for Housing ♦ Code “1m” Housing Loans granted in Lira based on the Protocol signed with the “Volunteer Military Housing Device” ♦ Code “2m” Loans granted in Lira directly to the “Volunteer Military Housing Device” ♦ Code “3m” Loans granted by the Volunteer Military Housing Device prior to 6/2/2009 and transferred to the Bank ♦ Code “1h” Small Lira Loans granted with approval of Microfinance Institutions ♦ Code “21h” Small Lira Loans financed by loans granted to Microfinance Institutions ♦ Code “22h” Small Lira Loans financed by loans granted to Financial Institutions ♦ Code “t” Loans granted in Lira against guarantee from AFESD, AFD, OPIC, EIB, IFC not benefiting from Interest Subsidies ♦ Code “u” Loans granted in Lira for continuing studies in Higher Education Institutions ♦ Code “1ev” Loans granted in Lira to finance environmentally friendly projects outside the energy sector not benefiting from Interest Subsidies ♦ Code “2ev” Loans granted in Lira to finance environmentally friendly projects in the energy sector not benefiting from Interest Subsidies ♦ Code “ag” Agricultural Loans granted in Lira based on the Protocol signed with the Ministry of Agriculture ♦ Code “dp” Housing Loans granted in Lira based on the Protocol signed with the Ministry of Displaced Persons ♦ Code “jr” Housing Loans granted in Lira based on the Protocol signed with the Judges’ Mutual Aid Fund ♦ Code “10i” Housing Loans financed from loans granted to the Housing Bank according to Central Council Decision No. 10/26/16 dated 11/8/2010 ♦ Code “fs” Housing Loans granted in Lira based on the Protocol signed with the General Directorate of Internal Security ♦ Code “sg” Housing Loans granted in Lira based on the Protocol signed with the General Directorate of Public Security ♦ Code “en” Loans granted in Lira to contractors for constructing or rehabilitating government buildings ♦ Code “ict” Loans granted in Lira to
Lebanese Doctors to purchase a Tablet ♦ Code “se” Housing Loans granted in Lira based on the Protocol signed with the State Customs Directorate ♦ Code “ad” Housing Loans granted in Lira based on the Protocol signed with the Customs Police ♦ Code “pp” Housing Loans granted in Lira based on the Cooperation Protocol with the Fire Brigade ♦ Code “pkg” Loans granted in Lira to build a public garage for parking spaces ♦ Code “cma” Housing Loans granted in Lira to employees of the Financial Markets Authority ♦ Code “gb” Housing Loans granted in Lira based on the Cooperation Protocol between Banks and the Beirut Municipality Guard Brigade ♦ Code “cca” Housing Loans granted in Lira to users of the Supervisory Committee for Insurance Bodies

Central Bank of Lebanon
Form No.: (5/5) -011RO

Bank Name: ___________________________ Number: ______________ Status as of Wednesday: _____________

Allowed Incentives from Mandatory Reserves (2) in Thousands of Lebanese Liras

H - Loan Balances Benefiting from 2009 Incentives ♦ Code “19n” Loans granted in Lira to Productive Sectors not benefiting from Interest Subsidies and benefiting from 2009 incentives ♦ Code “29n” Housing Loans granted in Lira prior to 8/2/2017 benefiting from 2009 incentives ♦ Code “27n” Housing Loans granted in Lira after 7/2/2017 benefiting from 2009 incentives ♦ Code “09n” Other Loans granted in Lira benefiting from 2009 incentives ♦ Code “09i” Housing Loans benefiting from 2009 incentives financed by loans granted in Lira to the Housing Bank ♦ Code “ce” Loans granted in Lira to Industrial Institutions to finance working capital for exports

Note:

• For loan categories not benefiting from 2009 incentives, the following reserve deduction percentages apply:
  (s + m1 + m2 + m3 + h1 + h21 + h22 + t + u + ev1 + ag + dp + jr + i10 + fs + q0 + q3 + en + sg + se + ad + pp + pkg + cma + gb + cca) + 0.6 x (q1 + q2 + r) + 0.65 x (i) + 0.8 x (p) + 0.9 (p07) + 1.5 x (ev1 + ev2 + ict)

• For loan categories benefiting from 2009 incentives, the following reserve deduction percentages apply:
  0.6 x (n19 + n29 + n09) + 0.75 x (n27) + 0.8 x (i09) + (ce)

Form -1MMO
Bank Number: -------------
Fundamental Decision No. 7858 attached to Fundamental Circular No. 85 Bank Name: -------------- Weekly Statement: As of _ _ / _ _ / _ Values in Millions of Liras

Equivalent in Foreign Currency in Lira
Code Name
In Lira
Total
Resident
Non-Resident
Resident
Non-Resident

10100 The Fund
24500 Regional and International Entities and Multilateral Development Banks Among them: Regional and International Entities excluding Multilateral Development Banks Z24500 20800 Customer Deposits 20810 Demand Deposits 20820 Accidental Debit Credit Accounts 20830 Demand Savings Accounts 20840 Time Savings Accounts 20850 Time Deposits Subject to Prior Notice 20870 Frozen Accounts 20871 Among them: Documentary Credits for Import Guarantees 20873 Among them: Cash Guarantees for Loans 20876 Among them: Accounts frozen linked to Savings Programs 20890 Credit Accounts for Debit Accounts 20895 Accrued Interest Not Yet Payable 24300 Deposits from Credit Agreements 21000 Payment Values 21210 Various Creditors - Private Sector 21211 Among them: Demand Accounts 21225 Cash Guarantees for Electronic Operations 21300 Partners 21310 Credit Liabilities to Partners 21312 Among them: Demand Deposits of Partners 21320 Dividends and Returns to be Paid 21325 Accrued Interest Not Yet Payable 21330 Cash Advances for Covering Shortfalls in Reserves 21350 Deposits for Increasing Own Funds 20500 Registered Financial Institutions 20510 Among them: Demand Accounts 20520 Among them: Time Deposits 20560 Among them: Credit Accounts for Debit Accounts 20570 Among them: Financial Values Given in Trust or Repurchase Agreements 20580 Among them: Accrued Interest Not Yet Payable 23900 Other Financial Sector Institutions 23910 Among them: Demand Accounts 23920 Among them: Time Deposits 23960 Among them: Credit Accounts for Debit Accounts 23970 Among them: Financial Values Given in Trust or Repurchase Agreements 23980 Among them: Accrued Interest Not Yet Payable 48020 Head Office, Parent, Sister and Subsidiary Financial Institutions and Banks 48021 Among them: From Commercial Banks 48022 Among them: From Specialized Banks 48100 Bank Certificates Sold to the Financial Sector 48101 Among them: Primary or Remaining Maturity of One Year or Less for Banks Among them: Primary or Remaining Maturity of One Year or Less for Financial Institutions and Other Financial Sectors 48102 48150 Among them: Sold to Related Financial Institutions 48160 Among them: Sold to Unrelated Financial Institutions 48170 Among them: Sold to Related Other Financial Sectors 48180 Among them: Sold to Unrelated Other Financial Sectors 48200 Bank Certificates Sold to the Non-Financial Sector 48201 Among them: Primary or Remaining Maturity of One Year or Less 48300 Bonds and Similar Instruments Sold to the Financial Sector 48301 Among them: Primary or Remaining Maturity of One Year or Less for Banks Among them: Primary or Remaining Maturity of One Year or Less for Financial Institutions and Other Financial Sectors 48302 48350 Among them: Sold to Related Financial Institutions

Equivalent in Foreign Currency in Lira
Code Name
In Lira
Total
Resident
Non-Resident
Resident
Non-Resident

48360 Among them: Sold to Unrelated Financial Institutions 48370 Among them: Sold to Related Other Financial Sectors 48380 Among them: Sold to Unrelated Other Financial Sectors 48400 Bonds and Similar Instruments Sold to the Non-Financial Sector 48401 Among them: Primary or Remaining Maturity of One Year or Less 23600 Composite Financial Instruments Classified at Fair Value through P&L Z23600 Among them: Composite Financial Instruments Classified at Fair Value through P&L Sold to Non-Banks and Not Accepted in Supporting Own Funds

21800 Secured Debts and Similar Instruments Classified at Fair Value through P&L Among them: Secured Bonds Sold to Non-Banks and Not Accepted in Supporting Own Funds Z21820 Among them: Preferred Shares Sold to Non-Banks and Not Accepted in Supporting Own Funds Z21840

21850 Secured Debts and Similar Instruments Classified at Amortized Cost Among them: Secured Bonds Sold to Non-Banks and Not Accepted in Supporting Own Funds Z21856 Among them: Preferred Shares Sold to Non-Banks and Not Accepted in Supporting Own Funds Z21857

20100 Central Bank of Lebanon and Other Issuing Institutions Accounts 20200 Commercial Banks 20210 Among them: Demand Accounts 20220 Among them: Time Deposits 20250 Among them: Credit Accounts for Debit Accounts 20260 Among them: Financial Values Given in Trust or Repurchase Agreements 20280 Among them: Accrued Interest Not Yet Payable 20300 Medium and Long-Term Credit Banks 20310 Among them: Demand Accounts 20320 Among them: Time Deposits 20370 Among them: Credit Accounts for Debit Accounts 20350 Among them: Financial Values Given in Trust or Repurchase Agreements 20380 Among them: Accrued Interest Not Yet Payable 23000 Branches Abroad 23010 Among them: Demand Accounts 23020 Among them: Time Deposits 23050 Among them: Credit Accounts for Debit Accounts 23060 Among them: Financial Values Given in Trust or Repurchase Agreements 23080 Among them: Accrued Interest Not Yet Payable 29999 Total Liabilities Elements for Financial and Non-Financial Sectors

Name: -----------------
Signature -------------:

Central Bank of Lebanon
Directorate of Statistics and Economic Research Form -10RO Liabilities in Foreign Currencies Subject to the 15% Rate Imposed by Fundamental Decision No. 7926 Attached to Fundamental Circular No. 86 and Fundamental Decision No. 7935 Attached to Fundamental Circular No. 87

Average between _______________ and_________________ Bank Number:

Resident in Thousands of US Dollars
Bank Name:

Code Name
US Dollar
Euro
British Pound
Swiss Franc
Canadian Dollar
Australian Dollar
Japanese Yen
Other Currencies
Total

20100 Other Non-Resident Issuing Institutions
20180 Less: Accrued Interest Not Yet Payable (Non-Resident) 20200 Non-Resident Commercial Banks 20250 Less: Credit Accounts for Debit Accounts (Non-Resident) 20280 Less: Accrued Interest Not Yet Payable (Non-Resident) 20300 Non-Resident Medium and Long-Term Credit Banks 20370 Less: Credit Accounts for Debit Accounts (Non-Resident) 20380 Less: Accrued Interest Not Yet Payable (Non-Resident) 20500 Registered Financial Institutions (Resident and Non-Resident) 20560 Less: Credit Accounts for Debit Accounts 20580 Less: Accrued Interest Not Yet Payable 23900 Other Financial Sector Institutions (Resident and Non-Resident) 23960 Less: Credit Accounts for Debit Accounts 23980 Less: Accrued Interest Not Yet Payable Z20800 Customer Deposits (Resident and Non-Resident) (1) 20871 Less: Documentary Credits for Import Guarantees 20890 Less: Credit Accounts for Debit Accounts 20895 Less: Accrued Interest Not Yet Payable 24300 Deposits from Credit Agreements (Resident and Non-Resident) 24301 Less: Accrued Interest Not Yet Payable 20900 Public Sector Deposits 20980 Less: Accrued Interest Not Yet Payable 21000 Payment Values for Residents and Non-Residents 21210 Various Creditors - Private Sector (Resident and Non-Resident) 21221 Various Creditors - Public Sector (Demand Accounts) 21225 Cash for Electronic Operations Guarantees 21300 Partners (Resident and Non-Resident) 21325 Less: Accrued Interest 21330 Less: Cash Advances for Covering Shortfalls in Reserves 21350 Less: Deposits for Increasing Own Funds Z21700 Bonds and Similar Instruments (Maturity of One Year or Less) Less: Accrued Interest Not Yet Payable at Fair Value through P&L 21748 21755 Less: Accrued Interest Not Yet Payable (Amortized Cost) 23000 Branches Abroad 23050 Less: Credit Accounts for Debit Accounts 23080 Less: Accrued Interest Not Yet Payable Z23100 Head Office, Parent Institution, Sister and Subsidiary Financial Institutions and Banks (excluding Resident Banks) 23150 Less: Credit Accounts for Debit Accounts 23180 Less: Accrued Interest Not Yet Payable Z24600 Bank Certificates at Fair Value through P&L (Maturity of One Year or Less / excluding those sold to Resident Banks) 24680 Less: Accrued Interest Not Yet Payable Z24700 Bank Certificates at Amortized Cost (Maturity of One Year or Less / excluding those sold to Resident Banks) 24780 Less: Accrued Interest Not Yet Payable 99999 Total Resident Liabilities in US Dollars

Note:
Review of Fundamental Decision No. 7926 Article One: Bonds, Deposit Certificates, and Bank Certificates issued by Banks and loans obtained from the Financial Sector where the remaining maturity of each is one year or less. (1) Excluding accounts from the Housing Savings/Borrowing Program and deposits from the Volunteer Military Housing Device which benefited from them prior to 20/10/2017. Intermediary Circular 475 dated 19 October 2017

Name: ------------------------------
Signature -----------------------------: