Regulatory Alerts2020-06-03
Added · Updated
Circular to Licensed Banks Regarding Bounced Checks for Financial Reasons During the Suspension Period
The Central Bank of Lebanon mandates that licensed banks calculate grace periods for bounced checks using calendar days rather than business days during three specific intervals between February 26 and May 21, 2020. Banks are prohibited from collecting check return fees for financial reasons during the pandemic suspension period, though fees may be charged if the customer fails to settle the check by the final deadline. Licensed banks must report these bounced checks by October 31, 2020, and standard returned checks instructions resume on May 26, 2020.
10/5/6069 11/10 /1441 AH 3/ 6/2020 AD
Circular to Licensed Banks Subject: Bounced Checks for Financial Reasons During the Suspension Period
Greetings,
With reference to the above subject, and following Circulars with numbers (1/4/4583) dated 19/3/2020, (1/4/4641) dated 31/3/2020, (1/4/4659) dated 5/4/2020, (1/4/4737) dated 15/4/2020, and (1/4/4936) dated 30/4/2020, the following is decided:
- Rely on time periods (days of the week) instead of business days for the mechanism of calculating the grace period for bounced checks during the exceptional period of the Corona pandemic, which starts from 26/2/2020 and ends on 21/5/2020, as follows:
- The first period from 26/2/2020 to 4/4/2020.
- The second period from 5/4/2020 to 30/4/2020.
- The third period from 3/5/2020 to 21/5/2020.
Banks are left to determine the customer sectors whose checks were returned, as well as to determine the extent to which customers of these sectors were conducting business/suspended their business during the exceptional periods mentioned above, for the purpose of calculating the grace period in accordance with the circulars issued on this matter.
Banks are required to report bounced checks during the suspension period due to the Corona pandemic, no later than 31/10/2020; otherwise, the bank is considered in violation of the prevailing instructions.
It is prohibited to collect any commissions for bounced checks (check return fee) during the Corona pandemic, whether submitted once during the pandemic, resubmitted and presented again during the pandemic period, or after 21/5, until the end of the settlement period granted to the customer. If the deadline specified for the customer expires without the customer settling the checks, they will be included in the list of defaulters and charged the commissions incurred in accordance with the prevailing legislation on this matter.
Instructions of the Returned Checks Unit will resume as usual from 26/5/2020.
Please accept our highest respect,
The Governor Dr. Ziad Fries
Attached: A guide for banks on how to report returned checks during the Corona pandemic.
Circular to Licensed Banks Regarding Bounced Checks for Financial Reasons / O.Sh