Circular 20/2012 Regarding the Verification of Financial Soundness in Commercial Banks

Central Bank of Libya P.O. Box 1103 Telegram: Misrata, Libya - Tripoli, Libya

Framework: Arman / 960 Vol. 2 Circular No. (20/2012) Date: 28 Dhu al-Hijjah Location: 2012/11/13 AD

To: General Managers of Commercial Banks To: Heads of Temporary Administrative Committees of Commercial Banks To: General Manager of the Libyan Foreign Bank

Greetings,

Subject: Verification of the Financial Soundness of Commercial Banks

Based on the provisions of Article (81) and Article (83), paragraph fourth, of Banking Law No. (1) of 2005 concerning the establishment of an internal audit department and a compliance unit.

In implementation of the provisions of Article (49) of the statutes of commercial banks.

And with reference to Circulars No. A.R.M. No. (2004/5) and (2005/5), dated 2004/6/7 and 2005/3/15, respectively, regarding the necessity of establishing an internal audit department, a risk management department, and a compliance unit.

And with reference to Circular Letter No. (2006/50) dated 2006/5/17 AD, regarding compliance with the controls and standards of international banking supervision.

And with reference to Circular A.R.N. No. (2007/6) dated 2007/1/11, regarding the guiding competencies of the internal audit department, risk management department, and compliance unit, to be used in determining the competencies of these administrative units established in commercial banks.

And in light of what was mentioned in paragraph (2) of item second, regarding the report on the draft accounting system for commercial banks (FLEXCUBE) within the minutes of the second meeting of the Supreme Committee for the National Payments System project for the year 2012 AD, held on 2012/10/15 AD, and the recommendations reached regarding the conditions of the National Payments System and its components.

Therefore, you are requested to ensure the necessity of verifying the accuracy of the data contained in the financial positions of your banks and reviewing them, by activating the role of internal audit in commercial banks, so that it is directly responsible for the correctness of the bank's financial position.

Peace, mercy, and blessings of God be upon you.

Dr. Muhammad Abdul Jalil Aboustait Director of Banking Supervision and Verification Department

Copies to: Mr. / The Governor Mr. / The Deputy Governor Mr. / Director of the Applications Services Center for the National Payments System Project Banking Follow-up and Compliance Monitoring Department

www.cbl.gov.ly swift code:CBLJLYLX +218 21 444 1488 : Fax +218 21 333 3591 : Phone

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www.cbl.gov.ly swift code:CBLJLYLX +218 21 444 1488 : Fax +218 21 333 3591 : Phone