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Lebanon central bank seeks more powers to regulate bank restrictions on clients

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Lebanon central bank seeks more powers to regulate bank restrictions on clients

The Lebanese central bank is seeking "exceptional powers" from the country's finance ministry to regulate and standardize restrictions imposed by local commercial banks on depositors, Reuters reported.

Banque Du Liban Governor Riad Salamé confirmed to the newswire that he requested caretaker Finance Minister Ali Hassan Khalil for the extra powers in a Jan. 9 letter, citing the need to secure public good, safeguard banking and monetary stability and "to protect the legitimate interests of depositors and clients."

Since October 2019, Lebanon's banks have been controlling access to deposits and preventing most international transfers abroad to block capital from exiting the country.

Salamé noted that the measures imposed by commercial lenders need to be regulated with the intention of "implementing them fairly and equally" on all depositors, as the controls had "prejudiced" the rights of some clients on several occasions, according to the report.

Earlier in January, Nasser Saidi, Lebanon's former economy minister, said the country needs a rescue package worth $20 billion to $25 billion to recover from the economic state of emergency declared in September 2019.

In November 2019, the Association of Banks in Lebanon proposed a number of temporary measures, in coordination with the central bank, on the movement of capital, including lifting restrictions on new funds from abroad.