Are there licenses for new banks?

In an interview with MTV, Professor of Economics at the Lebanese University, Professor Jassem Ajaka, pointed out that “the issue of granting licenses to banks began with the government of former President Hassan Diab, where he proposed canceling bank licenses and granting licenses to five new banks, but the plan was not implemented.” Then Deputy Prime Minister His Excellency Al-Shami presented the same plan. In practice, the Acting Governor of the Central Bank, Wassim Mansouri, refused to grant any license to any new financial institution, regardless of its type.”

Ajaqa confirmed, “There are no licenses yet, and I believe that it is impossible to grant licenses to new banks for many reasons, and if these banks that will be granted licenses are foreign, they cannot open branches in Lebanon unless reforms are implemented.”

He explained: “The credit rating of these banks is declining because Lebanon’s rating is now at the “selective default” and foreign banks will not come to Lebanon without there being reforms and signing a program with the International Monetary Fund.”

He pointed out that “if licenses are granted to banks, they will be Lebanese, marginalized banks, or established for a specific purpose, that is, in partnership between international financiers and influential people in Lebanon.”

He said, “At the level of banks, we cannot cancel existing ones and give licenses to new ones at this stage,” stressing that “there is a deposit crisis that requires a plan to reconstitute funds in the banking sector, as they will not generally trust new banks.”

Ajaqa said it was unlikely that Mansouri would be ready to take such a decision, pointing out that “what is required is to implement Circular 154 and for the government to study with the lenders in the banks how it will repay its public debt, waiting for what will happen in Gaza.”