Here is the article rewritten in Markdown format with proper headings, subheadings, and bullet points:
Lebanon’s Banking Sector: A Complex Web of Regulations
The Lebanese banking sector is governed by a complex set of laws and regulations, with multiple bodies overseeing its operations. At the heart of it all is Law No. 14 of 17 January 1977, as amended by Law No. 283 of 30 December 1993, which established the Housing Bank and defined its role in providing loans to Lebanese citizens.
Ownership Structure
The private sector owns 80% of the bank’s shareholding, with the main purpose of the Housing Bank being to grant loans for the purchase, construction, renovation, completion or revamp of real estate property in Lebanon. However, the sector is also subject to numerous regulatory limitations and restrictions, including those related to transactions between banks and their affiliates.
Transactions Between Affiliates
The meaning of an “affiliate” varies depending on the purpose of the circular, with Basic Circular No. 34 of 24 April 1997, as amended, distinguishing between three types of control:
- Exclusive control
- Joint control
- Participation interest
There are no limitations applicable to transactions between a bank and its affiliates other than conflict-of-interest limitations set out in the CMC and the Code of Commerce.
Regulatory Challenges
The principal regulatory challenges facing the banking industry in Lebanon include:
- Regulating an increasingly complex sector
- Growing supranational regulations focused on anti-money laundering (AML) and combating the financing of terrorism
- Preserving the specificities of the Lebanese banking sector, including banking secrecy
The recent sovereign debt default and economic crisis have also added to the regulatory challenges facing the BDL.
Consumer Protection
Banks are subject to consumer protection rules, with Consumer Protection Law No. 659 of 4 February 2005 (CPL) including banks within its scope of application. However, the provisions of the CPL on treatment of contracts between banks and consumers are enforced without prejudice to the specific laws and regulations applicable to the banking sector.
Future Changes
In the coming years, it is expected that legal and regulatory policies will be geared towards tackling the effects of Lebanon’s economic, financial, political and social crisis. The BDL is likely to play a crucial role in shaping the future of the sector, with a focus on maintaining stability and ensuring the continuity of banking services.
The article highlights the complexities of the Lebanese banking sector, with multiple bodies overseeing its operations and a plethora of regulations and restrictions in place. As the sector continues to evolve, it remains to be seen how these regulatory challenges will be addressed and what changes will be implemented to ensure the continued stability and growth of the sector.