Regulatory Alerts2020-08-27 | 13262Exceptional Measures to Revive the Business of Banks Operating in Lebanon
The Governor of the Central Bank of Lebanon issued Decision No. 13262 to revive banking operations by mandating fair asset and liability valuations, establishing a 15% (or 30% for senior stakeholders and PEPs) mandatory deposit into a new eight-year 'Special Account' for clients transferring over $500,000 abroad since July 2017, and requiring banks to maintain a minimum 3% foreign currency external account. The decision further enables capital reconstitution through the issuance of redeemable, tradable perpetual bonds and allows depositors to voluntarily convert funds into equity or bonds, with proceeds transferable abroad if funded by new capital. Non-compliant banks face administrative and criminal sanctions, while supervisory commissioners are tasked with verifying implementation and reporting suspected money laundering or terrorist financing activities.