BDL urges banks to recapitalise, transfer back funds from abroad

BEIRUT: In a bid to attract fresh capital, Lebanon’s central bank issued a circular Thursday calling on banks to urge depositors who transferred more than $500,000 since 2017 to return 15 percent of the amount.

It also called on banks to initiate the first step of a restructuring, urging them to “conduct a fair evaluation of their assets and liabilities.”

The central bank’s move is aimed at attracting fresh funds to revive Lebanon’s ailing banking sector which has been crippled in the midst of a widespread economic crisis.

Defacto capital controls have rendered Lebanon’s economy into a cash-only model.

The call to redeposit transferred funds applies to anyone who “transferred more than $500,000 abroad as of July 1, 2017.” The money will be frozen in a special account for a period of 5 years.

This also applies to all bank stakeholders and shareholders, as well as politically exposes persons (PEPs).

PEPs, however, are asked to transfer back 30 percent of any amount transferred abroad.