Banks in Lebanon will soon be required to start paying a monthly sum of $400 and their equivalent in Lebanese pounds to holders of accounts dating before October 2019, according to a new decision by the Central Bank of Lebanon.
The announcement was made following a meeting of the Banque du Liban’s (BDL) Central Council on Friday.
It was decided during the meeting that banks would have to pay the aforementioned amount on a monthly basis in fresh U.S. dollars.
The BDL will soon issue a circular that includes the details of the decision, according to a statement issued by the BDL media department.
The statement noted that the amounts that banks will pay in the first year “will be paid from their accounts at correspondent banks abroad, which range between one billion and two hundred million U.S. dollars.”
Additionally, banks will be allowed to withdraw the same amounts from the Central Bank, in exchange for mandatory investments.
“The monthly payment of $400 concurs with the payment of the same amount in Lebanese pounds based on the exchange rate of the Sayrafa platform.”
During the first year of this decision’s implementation, the balances of 800,000 customers’ accounts – around 70% of depositor accounts in Lebanon – will be repaid, the statement said.
“Banks may use the 3%, except for the fresh dollar accounts of depositors, for this purpose. The Central Council also decided to reduce the mandatory investment in foreign currencies from 15% to 14%.”
The decision takes effect on July 1st, 2021, and it will include “an entry point” for dealing with banks that are not committed to it.