The Lebanese Central Bank issued on April 9, 2020 basic circular no. 150 exempting banks from depositing mandatory reserves and placements against inward transfers in foreign currencies or cash receipts in Lebanese pounds or in foreign currencies if the following conditions are met:

1-    Granting the recipients freedom to use the wired money to benefit from the concerned banking services including transferring the money abroad, cash withdrawals, and cards operations inside and outside Lebanon.

2-    Concerned banks taking all the necessary accounting measures to follow-up on the utilization of the money (such as opening a private bank account)

The aforementioned exemptions will remain applicable even in the event the beneficiary opts to convert the full amount or partial amount to any other currency or requests to transfer the received amount to any other bank operating in Lebanon which will in turn benefit from the exemptions bestowed upon it by the provisions of this circular.

The circular also noted that auditors are required to regularly check the banks’ compliance to the provisions of the circular and to report to the Central Bank if any violation is detected. The circular stated that banks that are in breach of the provisions of the circular will be subject to the sanctions enforced by the laws and regulations specifically those related to article 208 of the law of money and credit in addition to being compelled to deposit a special non-interest generating reserve amount at the Central Bank. It also subjects non-compliant banks to pay a penalty of 15% of the concerned amount. The first calculation of the aforementioned exemptions covers the period extending between April 30 and May 6, 2020.