BDL Circular 682: Amendment of Basic Circular 158 of Exceptional Measures to Gradually Repay Deposits in Foreign Currencies

BDL issued, on 17/11/2023, an amendment to Basic Decision 13335, outlining exceptional measures for the gradual repayment of deposits in foreign currencies as per Circular No 158. This decision applies to depositors whose accounts were in any bank (the transferring bank) in foreign currencies before 10/31/2019, and subsequently transferred to other (remitting) banks. The entitled amount should be returned to the remitting bank. This includes accounts that were joint and became individual, or accounts that were individual and became joint in the receiving bank.

The primary account holder benefiting from this decision is the one from whom the amounts are transferred. In case of death, inheritors can benefit up to 100% of the specified limits. Moreover, the account holder must sign a form lifting banking secrecy with the referred bank in favor of BDL and the Banking Control Commission. Additionally, a statement from the transferring bank, confirming that the amount to be returned corresponds to the account holder, must be obtained.

The remitting bank is responsible for calculating the transferable amount, subject to the available balance on 10/31/2023. The transferred amount should not exceed the balance on the date of opening the account with the receiving bank, excluding amounts not received from the account holder’s account.

The remitting bank is requested to reopen an account for the customer to receive the entitled amount. Compliance is required, and any failure may lead to penalties specified in the decision, with the transferred amount not exceeding $50,000. Furthermore, if the account with the transferring bank is still open, the account holder can request replenishment from the account with the receiving bank, not exceeding the total returned amount plus $50,000. The receiving bank must calculate the eligible amount based on conditions mentioned in the decision, with the balance not exceeding that available on 10/31/2019.

Additionally, the account holder benefits retroactively from the date of application until the opening of the special branched account. Also, noting that no commissions or expenses are charged, and the special account does not earn interest. The account holder can withdraw funds from the single account through checks or transfers within Lebanon.

Lastly, BDL has sparked some hope regarding the fate of deposits as this circular provides depositors with a dose of confidence that the fate of their money is still under consideration. However, issuing such an amendment especially during the country’s critical circumstances raise concerns for the banking sector especially regarding the funding sources and the mechanism of implementing the Circular. Criticisms from banking sources mainly focus on the lack of clear procedures, especially concerning important details such as who will pay the $300 to depositors if the bank had previously withdrawn their deposit. It expected that about 10% of the accounts will be affected with almost three-quarters of them with the five largest banks.

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