Central Bank of Libya

P.O. Box 1103 Tripoli - The Great Socialist People's Libyan Arab Jamahiriya

Telex Address: Misr Libya - Tripoli

Article Three

The structure of the bank's direct credit portfolio is determined according to the categories below, such that the facilities granted in each category do not exceed 30% of the total.

No.	Credit Category
1	- Overdraft facilities
2	- Commercial real estate loans
3	- Other commercial loans
4	- Residential real estate loans
5	- Retail loans

Article Four

Indirect facilities (letters of credit, guarantees, and standby letters of credit) granted by banks must not exceed the following limits:

No.	Type of Indirect Facilities	Limit
1	Open letters of credit	Three times the core capital
2	Guarantees and standby letters of credit issued	150% of core capital

Letters of credit, guarantees, and standby letters of credit must be reduced by the guarantees provided against them according to the types, percentages, and conditions specified in the table below, when calculating excesses over the limits.

Type of Guarantee	Conditions for Deduction	Deduction Percentage
Cash Collateral	- The collateral must be cash deposited in an account blocked by the bank and not withdrawable.<br>- The cash collateral must be effectively funded by the client, i.e., not funded by debiting their account.	- If the cash collateral is in the same currency as the indirect facility: 100%<br>- If the cash collateral is in a different currency than the indirect facility: 80%
Guarantees and standby letters of credit issued by banks operating in Libya		- In the same currency as the indirect facility (80%)<br>- In a different currency than the indirect facility (60%)
Guarantees and standby letters of credit issued by banks affiliated with the Central Bank of Libya and the Libyan Foreign Bank		- In the same currency as the indirect facility (80%)<br>- In a different currency than the indirect facility (60%)

Continued...

| Guarantees and standby letters of credit issued by foreign banks | The credit rating of the bank issuing the guarantee is calculated as follows:<br>1. From AAA to AA-<br>2. From A+ to A-<br>3. From BBB+ to BBB-<br>4. From BB+ to B-<br>5. Less than B-<br>6. Unrated | If the guarantee and standby letter of credit are in the same currency as the indirect facility:<br>1. (80%)<br>2. (50%)<br>3. (50%)<br>4. Reduction<br>5. Reduction<br>6. Reduction<br><br>If the guarantee and standby letter of credit are in a different currency than the indirect facility, the above percentages are reduced by 20%, so that the percentages in items 1, 2, and 3 become (60%), (30%), and (30%) respectively. |

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Central Bank of Libya

P.O. Box 1103 Tripoli / The Great Socialist People's Libyan Arab Jamahiriya Telex Address: Misr Libya - Tripoli

Article Five

The following loans and facilities (direct and indirect) are not subject to the limits in Articles Three and Four above:

• All loans and facilities granted by the bank with the guarantee of the Planning and Finance Authority, and funded from the state general budget.
• All loans and facilities granted by the bank to projects that have allocations listed in the state general budget items.

Article Six

Without prejudice to the penalties and fines stipulated in the Banking Law, if any bank exceeds the limits, ceilings, or ratios specified under the provisions of this circular, it must rectify its situation and remove the violation within a period of six months from the date of issuance of this circular.

Article Seven

This decision shall be implemented from the date of its issuance, and the Banking and Currency Supervision Department shall take the necessary measures for its implementation. Decision No. 45 of 2008 of the Board of Directors of the Central Bank of Libya regarding the determination of the financial structure and credit portfolios of banks is repealed.

Farajat Omar bin Qadarah Governor

Issued in: …………………… Date: 2010-01-20