Operations Relating to Credit, Investment and Shareholding and Participation

Circular No. 568 for Banks and Financial Institutions

Reference: Decision No. 13260 dated August 26, 2020 regarding the amendment of a version of Basal Decision No. 7776 dated February 21, 2001 (Credit, Investment, Shareholding and Participation Operations) attached to Basal Circular No. 81.

Beirut, August 26, 2020
Governor of the Central Bank of Lebanon
Riad T. Salam

Decision No. 13260
Amending Basal Decision No. 7776 dated February 21, 2001 (Credit, Investment, Shareholding and Participation Operations)

The Governor of the Central Bank of Lebanon,
Pursuant to the Monetary and Banking Law, particularly Articles 70, 79, and 174 thereof; Pursuant to Basal Decision No. 7776 dated February 21, 2001 and its amendments regarding Credit, Investment and Shareholding and Participation Operations; Pursuant to Basal Decision No. 10439 dated May 17, 2010 regarding transparency, principles and conditions of lending, particularly Clause "Fourth" of Article 10 thereof, Item 6(n) and (11); Pursuant to the provisions of Basal Decision No. 6170 dated May 17, 1996 and its amendments regarding the definition of "Resident and Non-Resident" in Lebanon, and the classification of accounts, operations, and statistics based thereon; After consulting the Association of Lebanese Banks; Considering the public interest in the current exceptional circumstances passing through the country, and preserving the current stability; And pursuant to the decision of the Central Council of the Central Bank of Lebanon taken in its meeting held on August 25, 2020;

Decides as follows:

Article 1: The following text is added to "Article 3 bis" of Basal Decision No. 7776 dated February 21, 2001:
"Fifth and Sixth:
Fifth: Banks and financial institutions operating in Lebanon shall accept the settlement by clients of installments or due payments in foreign currencies resulting from all retail loans subject to this Article, including personal loans, at the Lebanese Lira based on the specified rate (currently 1507.5 Lebanese Lira for the US Dollar, reflecting the Central Bank of Lebanon's average transaction rate with banks), subject to the following conditions:

• The client is a non-resident as defined in the regulatory texts issued by the Central Bank of Lebanon.
• The client holds an account in this foreign currency at the concerned bank, which can be used to settle these installments or payments.
• The total residential loans granted to the client do not exceed 800,000 USD, and the total other retail loans do not exceed 100,000 USD.
  All other facilities and loans, particularly commercial ones, remain subject to the terms of the loan or facility agreement concluded between the bank/financial institution and the client, particularly regarding the obligation to repay in the loan's currency.

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Sixth: Excluding retail loans (including personal and residential loans), banks and financial institutions operating in Lebanon shall not accept the settlement of loans granted in foreign currencies to non-residents from new funds transferred from abroad."

Article 2: This Decision shall take effect upon its issuance.
Article 3: This Decision shall be published in the Official Gazette.

Beirut, August 26, 2020
Governor of the Central Bank of Lebanon
Riad T. Salam