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BDL asks banks not to impose new terms on Circular 158

Lebanon Central Bank in Beirut.(The Daily Star/Mohammad Azakir)

BEIRUT: The Central Bank on Friday asked Lebanese lenders to stick to the conditions of Circular 158 only and not to add new clauses and conditions in the contract with depositors who should benefit from the new decision.

BDL’s statement was released after a number of complaints from depositors who said that their banks have added clauses in the contract that makes it very difficult for the clients to withdraw $400 a month plus the equivalent of $400 in Lebanese pounds at the platform’s rate of LL12,000 to the dollar.

Citing an example, some of the banks have asked their customers to sign an agreement which prohibits the customer from filing a law suit against the lender in case the latter was unable under some circumstances from continuing the payment of $400 banknotes.

Circular 158 was supposed to take effect as of July 1, 2021, but most depositors seemed reluctant to accept BDL’s offer, citing a number of ambiguities in this circular that need to be clarified.

The depositors, or most of them, claimed that the banks were not very transparent or forthcoming with their customers, noting that the lenders ask their clients to sign a contract stating that any person who wants to withdraw $400 in cash must freeze his bank account for five years and to lift the banking secrecy on every transaction.

Furthermore, the depositors insisted on more clarification from the banks about the fate of their accounts if the clients declined to use Circular 158.

Not all banks have started implementing the new circular as of July 1, arguing that they needed a few more days to implement this decision, but stressed that the lenders had no problem in allowing their customers who meet the conditions to withdraw their money from any branch.

The depositors’ association warned the customers from signing the contract if they noticed serious loopholes in the agreement.

“Banks must take the signatures of all customers who wish to benefit from Basic Decision No. 13335 on 6/8/2021 (Basic Circular No. 158) on the waiver of banking secrecy by these clients toward “Special Branched Accounts” for the benefit of the Banque du Liban and the Banking Control Commission, exclusively, and adherence to the form prepared by the Banque du Liban for this purpose,” the statement by BDL said.

BDL added that banks should not impose any obligations, conditions, pledges, or procedures that are not stipulated in the Circular No. 13335 dated 6/8/2021 (Basic Circular No. 158) and its amendments and in any written instructions issued on behalf of the Banque du Liban or the Banking Control Commission, within the scope of its powers, in the contracts it signs with clients who wish to benefit from the aforementioned decision or in any declaration, pledge or document signed by these clients.

But the statement did not say what kind of action BDL will take against any bank that does not stick to the conditions of Circular 158.

The statement explained who will is entitled for Circular 158. “ The provisions of Basic Resolution No. 13335 dated 6/8/2021 (Basic Circular No. 158) will benefit the natural person, resident and nonresident, including a minor, who: - owns foreign currency bank accounts in the concerned bank as on October 31, 2019. He still owns bank accounts in foreign currencies in the concerned bank as on the date of the actual implementation of the provisions of the aforementioned decision (ie the date of transferring the amounts to the “Special Branch Account”).

The person who is not considered an “account holder” who can benefit from the aforementioned decision: A legal person, including institutions, commercial companies and individual institutions, associations and public sector institutions, resident and nonresident banks and financial institutions.

Joint accounts: “Joint accounts (and/or) and accounts in the Federation (f) concerned are accounts owned by more than one natural person. The maximum amount allowed to be used from the balance of the joint account is determined at $50,000 in US dollars, and the owners of this account choose by agreement among themselves the percentage of benefit for each of them.”

It added that in the event that one of the parties in the joint account decided not to benefit from the provisions of Circular No. 158, any of the remaining parties in the account can benefit from the maximum allowed from the account.

In the event of multiple joint accounts, the owners of these accounts choose by agreement among themselves which account each of them they can benefit from.

In the event that there is an individual private account for a joint account holder and he decides to benefit from the single account, his partner can benefit from the joint account.

The maximum allowed to be used from the balance of the joint account is $50,000 for all parties to the account.

In the event that there is an individual special account (ID or) of a joint account holder, the maximum return to it shall be used to enhance the eligible balance if necessary in order to allow its use to fund the "Special Branch Account" up to an amount of $50,000.

 

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