BDL’s Circular 165: Electronic Settlement Operations of “Banknotes”

BDL issued a new Circular No 165 on 19/04/2023 in relation to the electronic settlement operations related to “banknotes” or “cash money”.  The Central Bank of Lebanon took the initiative to declare several decisions within the monetary and credit law that aim to organize the work of cash money and fresh checks and legalize their exchange through BDL in line with the exceptional circumstances that the Lebanese economy is going through.

According to the main articles of the circular, cash money indicates money transferred from abroad and/or received banknotes in foreign currencies after the date of 17/11/2019, and money deposited or to be deposited cash in new accounts in Lebanese pounds. In more details, the circular stated that all banks must open new accounts with cash (Banknotes) in US dollars and Lebanese pounds, to be used exclusively for settling electronic bank transfers for cash money and for settling checks clearing that are traded with cash money. Nevertheless, no specific amounts are subject to be deposited in these new cash accounts, Hence the circular claimed that banks are free to determine the value of its deposits in the new accounts, provided that the necessary balance is always available for the success of the settlement operations.

Moreover, the circular allowed cash transfers to be made electronically, and also permits the exchange of checks issued by Fresh accounts in Lebanese pounds and US dollars. It is expected that this will be followed by the issuance of payment cards linked to cash accounts, which can be used without conditions or any additional commissions at all points of sale in Lebanon. This reduces the burden of using banknotes to pay for purchases and others.

Furthermore, BDL also imposed strict conditions regarding banks without sufficient supplies to settle cash operations, as the circular stipulated that “in the event that sufficient supplies are not available in these accounts to complete settlement operations, the concerned bank is subject to the application of the provisions of Law No. 2/67 dated 16/1/1967, in addition to obligating him to pay compensation, as a penalty clause of not less than one billion Lebanese pounds. The circular also stipulated the addition of the word “Fresh” in green printed on the checks of “cash money” in order to distinguish it from other checks that remain without modification. Banks could also add any distinguishing mark with security protection for these checks.


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