Central Bank prohibits
instant money transfers

The BDL wants tighter control over the market

The Central Bank (BDL) issued recently two intermediate circulars in order to organize money withdrawal and payment through electronic tools.

The first circular banned banking transactions through mobile or fixed tools among clients of different banks, unless it is to receive money transfers. The circular stated that these money transfers should not happen instantly through the application or program used by the client’s device. They may only be executed through the SWIFT network, which allows money transfers between banks.

“The money transfer order should pass first by our back office and then be moved to another bank,” said Wissam Ali Hassan, Head of Electronic Banking at Fransabank, developer of the Simba application.

"The circular will not have any impact on our current mobile payment service (CMO with CSC Bank),”said Ziad Jalloul, Head of Retail Support at Lebanon and Gulf Bank.

The circular said electronic money may not be issued by any party or through any deal.

Banks should also make sure of clients’ identities and addresses, according to official documents. They need to have special records of each transaction exceeding or equivalent to $10,000 and to keep copies of clients’ official documents and documents of transactions exceeding or equivalent to $10,000, for at least five years.

“Banks are already putting limits on daily transactions through mobile apps and other e-tools,” said Ali Hassan. “The BDL just wants to control the market,” he said.

The circular said that banks should set an effective internal control system to fight money laundering and financing of terrorism, including the publication of an efficient guide for this purpose and appointment of a compliance officer. Banks should also report to the Special Investigation Commission of any suspicious transactions.

“The BDL is putting all these circulars to stay compliant with its own requirements as well as with international ones,” said Jalloul. “This is a very positive step, but it is incurring more operational costs,” he said.

The second circular stated that each Automated Teller Machine (ATM) should include at least three categories of paper money withdrawals. Banks allowed to establish and operate ATMs have until the end of the year to enforce the provisions of the circular.