What are the latest developments in Circular 166?

Basma Atwi wrote in “Nidaa Al Watan” newspaper: “Two months after the issuance of Circular 166 (last February 2), nothing has changed. That is, there is no specific date for the Bank of Lebanon to give the green light to the banks to start implementing it, and several banks are still refusing to accept depositors’ requests to benefit from the circular due to their stubbornness, with what this means is depriving them of the possibility of benefiting from the circular with retroactive effect if they are among those who meet the conditions. There are multiple explanations for this delay, including that there are technical reasons that prevent the Central Bank from issuing its decision, and including that it has a tendency to amend the circular to include a broader category of depositors.

Atwi continued,

Sources confirmed to “Nidaa Al Watan” that the Bank of Lebanon “warned these banks against continuing this intransigence and is following the issue closely and that there will be no change in the terms of the circular. Rather, the Central Bank is studying the files in preparation for giving its approval,” suggesting that “depositors will begin receiving their dues from Circular during the current month. She added: “The circular began to be implemented immediately after its issuance, with the banks receiving the transactions.” Checking the file for the first time takes some time, but payment is made retroactively from the date of submitting the application. Payment to depositors began in the last week of March. Some banks were late in receiving the transactions, and the matter was pursued, and all banks are supposed to be compliant now. As for expanding the segment of beneficiaries, this will be studied after a period of implementation because it requires determining the actual cost of the generalization before expanding it.”

The Chairman of the Board of Directors of the Lebanese Swiss Bank, Dr. Tanal Sabah, asserts to “Nidaa Al Watan” that “the secrets of the Bank of Lebanon are known only to those close to them, and the assumption that Circular 166 can be amended by it to expand the circle of its beneficiaries is inaccurate, because any amendment must first be made through the banks.” “Data” owns the depositors who meet the conditions for benefiting from the circular, and any attempt to expand the circle of beneficiaries must be carried out by the banks, and this matter did not happen and we were not informed of it.” He concludes: “We, as a bank, have sent the data required of us according to the circular, and we are awaiting the green light from the Central Bank for implementation.”

For his part, Nassib Ghobril, head of the Research Center at Byblos Bank, recalls that “the circular was issued practically two months ago,” pointing out to “Nidaa Al Watan” that “the banks needed some clarifications from the Central Bank about the depositors who are entitled to benefit from the circular, including depositors who They bought more than 7 thousand dollars on a banking platform, and those who transferred more than 300 thousand dollars from the pound to the dollar, and those who paid bank loans in Lebanese pounds and other list of conditions, including an item from a merchant with checks.”

He adds: “All of the previous conditions were easy for the banks to apply on their own, and there are standards based on numbers for them, while the last condition is that the banks do not have accurate numbers around it (i.e. identifying the depositor who traded in 10, 50, or 100 checks, for example, and how check trade can be calculated,” he said definitively). “This condition led to a delay in the implementation of the circular, noting that most banks began receiving applications and transferring them to the Central Bank for approval, and to date they have not received them.”

He concludes: “There are those who say that the reason for the delay is that the Central Bank is studying the possibility of expanding the number of beneficiaries of the circular by amending its provisions.” But the banks have no answer regarding a specific date that will enable depositors to collect their dues from Circular 166.”

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