Lebanon Businessnews News

New rules for TB dealing
BDL guidelines for non-resident banks
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The Central Bank (BDL) recently issued two circulars to regulate financing activities within local banks and institutions.

The first circular prohibits resident banks and institutions from dealing in Lebanese financial securities through their correspondent banks abroad, as guarantees against financing operations.

This amendment includes Treasury bills and Certificates of Deposit (CDs) issued and held by the BDL (Credit Linked Notes) or related to them. Previously, correspondents used such securities as guarantees against financing operations including Repossession Agreements. The circular underlined the need for transparency in contracts related to such operations.

“These measures will protect banks and increase their work efficiency,” said George Aouad, Advisor to the Chairman at First National Bank.

The BDL issued another amendment to prevent loans and facilities to local banks’ stakeholders through their affiliates abroad. This includes shareholders, boards of directors, and senior managers of banks and their subsidiaries, as well as their families.

Banks welcomed the BDL’s decisions circulars. “This is an added value that guarantees the resilience of the banking sector,” said Aouad.
Reported by Leila Rahbani
Date Posted: Sep 10, 2013
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