Conditions of the Establishment of the persons governed by the provisions of Articles 183 and 184 of the Code of Money and Credit

Intermediary Circular 490

For the persons governed by the provisions of Articles 183 and 184 of the Code of Money and Credit "Credit Counters"

We enclose for you Intermediary Circular No. 12800 dated 2/5/2018 concerning the amendment of the Fundamental Decision No. 12174 dated 21/1/2016 regarding the conditions for practicing lending operations according to the provisions of Articles 183 and 184 of the Code of Money and Credit, and the Fundamental Circular "for Credit Counters" No. 2.

Beirut, on 2 May 2018

Governor of the Central Bank of Lebanon

Riad T. Souhane

Intermediary Decision No. 12800

Amendment of Fundamental Decision No. 12174 dated 21/1/2016

The Governor of the Central Bank of Lebanon,

Based on the Code of Money and Credit, particularly Articles 183, 184, 197, 198, 199, and 200 thereof,

And based on Fundamental Decision No. 12174 dated 21/1/2016 regarding the conditions for practicing lending operations according to the provisions of Articles 183 and 184 of the Code of Money and Credit,

And based on the decision of the Central Council of the Central Bank of Lebanon taken in its meeting held on 25/4/2018,

Has decided as follows:

Article One: The text of "Article 4" of Fundamental Decision No. 12174 dated 21/1/2016 is repealed and replaced by the following text:

"Credit Counters shall exercise their activities through their main center and no other. They are prohibited from opening any branch without the prior approval of the Central Bank of Lebanon and the condition of having free own capital available to them equivalent to one billion Lebanese Lira for each branch."

Article Two: The text of "Article 10" of Fundamental Decision No. 12174 dated 21/1/2016 is repealed and replaced by the following text:

"First: The maximum limit for the total exposures granted by any "Credit Counter" operating in Lebanon to one person, natural or legal, or belonging to a group of related debtors, according to the definition provided in the regulatory texts issued by the Central Bank of Lebanon, is 5% of the Counter's own capital or the amount of 150,000,000 L.L., whichever is lower, provided that the total repayments of all loans granted to him by banks and financial institutions and other lending institutions do not exceed 35% of the income of the family consisting of the husband and wife.

Second: The "Credit Counter" may, on its own responsibility, be exempted from the provisions of the "First" paragraph of this Article and the provisions of paragraph (5) of Article 11 below if the following conditions are met:

• The client has not benefited more than once from the provisions of the "Third" paragraph of this Article.
• The client has not previously borrowed from any other "Credit Counter" based on the provisions of the "Second" paragraph of this Article.
• The value of the loan granted by the "Credit Counter" to the client (natural or legal person or belonging to a group of related debtors) does not exceed the amount of 100,000,000 L.L.
• The title deed of the property is not encumbered by any mortgage or any other burden, if the security provided against the loan granted is the main residence of the borrower, and this must be verified on the responsibility of the relevant "Credit Counter."

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Article Three: The text of paragraph (2) of Article 11 of Fundamental Decision No. 12174 dated 21/1/2016 is repealed and replaced by the following text:

"2- Borrow directly or indirectly from banks and financial institutions operating in Lebanon."

Article Four: Article 14 bis is added to Fundamental Decision No. 12174 dated 21/1/2016 with the following text:

"Article 14 bis: Credit Counters shall, on a semi-annual basis, provide:

• The Banking Supervision Directorate at the Central Bank of Lebanon with an electronic copy on a compact disc (CD) according to a program obtained from this Directorate, and a paper copy of the status of granted and unpaid loans prepared according to Annex No. (1) attached, delivered within a period of fifteen days from the date of the report.
• The Banking Supervision Committee with a paper copy of Annex No. (1) mentioned above."

Article Five: The following text is added to "Article 15" of Fundamental Decision No. 12174 dated 21/1/2016:

"Third: Annually within a period not exceeding the month of April, provide the Banking Supervision Directorate with an electronic copy on a compact disc (CD) obtained from this Directorate, and a paper copy of the following tables:
1- Identification card of the Counter according to Annex No. (2) attached.
2- Information about partners according to Annex No. (3) attached.
3- List of employees according to responsibilities and the administrative structure of the Counter according to Annex No. (4) attached."

Article Six: This Decision shall be enforced upon its issuance.

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

Beirut, on 2 May 2018

Governor of the Central Bank of Lebanon

Riad T. Souhane