New rules for electronic transfers

Concerned firms remain
under BDL supervision

The Central Bank (BDL) has issued a circular amending the rules for electronic transactions. The intermediary circular 325, issued in June, amends basic circular 7548 issued in 2000. Amendments included more detailed rules pertaining to electronic transfers in and out of Lebanon.

Electronic financial and banking transactions include all banks, financial institutions, and other institutions' phone, computer, online, and ATM operations. This definition applies equally to operations undertaken by issuers of payment and credit cards, and to platforms involved in all sorts of electronic transfers.

The new rules specify that banking transactions using mobile devices must be restricted solely to the concerned bank and its own clients. It is also prohibits issuing and dealing with all sorts of non-currency based ‘electronic money’.

Concerning electronic money transfers, all non-banking institutions should be registered as SAL, with nominal shares, and a minimum capital of $3.3 million. These institutions should also obtain prior approval from the BDL if and whenever they are subject to a stock acquisition giving a unique shareholder direct or indirect control over more than ten percent of the company’s shares.

All institutions performing electronic transfers should file a monthly report to the BDL listing the transactions they have carried out and specifying the point of transfer (source) and the date of each one.

Banks, financial firms, and brokerage firms do not need a license to pursue electronic transactions, but they should inform the BDL of their intention to undertake electronic transactions 30 days ahead of launching pursuant operations. Any local or foreign institution wishing to undertake electronic transactions locally, including money exchange firms, should have a prior license from the BDL.

Operations of institutions undertaking electronic transactions are controlled by the BDL and the Banking Control Commission (BCC). Institutions should have their auditors prepare annual reports for their electronic banking operations and for their technical and organizational status. They should send copies of the audit report to the BDL and the BCC by April each year.

Non-banking institutions who are currently performing electronic transfers should comply with the provisions of the new circular by end-March 2014.