Central Bank raises minimum capital required for money exchange firms
The Central Bank has decided to raise the minimum capital for money exchange institutions.
The Governor of the Central Bank, Riad Salameh, issued, on December 7, a basic circular announcing the new capital requirements for money exchange institutions.
According to the decision (number 10853), the new minimum capital required for money dealers of Category A is LL750 million, while that of Category B is LL500 million.
The law regulating money exchange institutions (issued in 2001) has divided these firms into two categories, A and B, according to their activity. According to the initial law, the required capital of an exchange institution of Category A is LL250 million, and that of Category B is LL100 million.
The circular stated that the decision shall be effective immediately. However, it said that money dealing firms which were established prior to the decision will be given one year, starting December 7, to comply.
“The decision to raise the capital requirements has dealt a heavy blow to money exchange institutions,” said Mahmoud Halawi, the president of the Syndicate of Money Changers. Halawi projected the closedown of up to 200 of the small and medium-sized money dealing firms (of Category B).
“This major capital raise would gravely damage the sector, which is already suffering the negative attitude of banks,” said Halawi. He also said that some banks had even closed the accounts of money changers.
The Central Bank had issued, last September, a series of circulars regulating the activities of money changing firms in line with tighter anti-money laundering policies.
Date Posted: Dec 09, 2011