Regulatory Alerts2010-04-05
Added · Updated
Circular 2010/6: Rules and Standards for Debt Write-Offs by Banks
The Central Bank of Libya mandates specific rules and standards for commercial banks before writing off debts. Debts classified as doubtful or bad for at least five years are eligible for write-off, with an exception for debts under 3,000 Libyan Dinars after three years if collection costs exceed their value. Banks must establish 100% provisions, obtain external auditor reviews, and secure approval from the Central Bank’s supervision department or wait one month for non-objection before proceeding. The decision requires Board of Directors approval and General Assembly ratification, while banks must maintain off-balance-sheet records to preserve the right to pursue debtors in the future.
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