The role of the Banque du Liban in relation to payment systems

Banque du Liban provides a wide range of services for banks, financial institutions, other institutions it supervises and the Lebanese government. The services include, inter alia, check processing, interbank transfers and book-entry services for treasury bills.

The role of the Banque du Liban was modified in virtue of Law No. 133/99 dated 26 October 1999 in order to extend the prerogatives, duties and responsibilities of the BDL. The Law provides for (1) developing and regulating payment systems, especially with regard to ATMs and payment cards; (2) developing and regulating transfer payments, including electronic transfers; and (3) developing and regulating clearing and settlement operations related to payment systems and financial instruments.

In line with technological developments throughout the world, the central bank issued Basic Decision No. 7548 dated 30 March 2000 to define electronic banking and financial operations undertaken by banks, financial institutions, financial intermediaries, mutual funds or any other similar entity operating in Lebanon. Any bank, financial institution, financial intermediary, mutual fund or any other institution supervised by the BDL that wishes to conduct any of its previously approved activities through electronic means needs to notify the central bank. These entities should comply with norms of transparency, integrity and security.

In order to update existing laws and regulations related to the Lebanese financial and payment systems, the BDL created the Commission for Developing and Modernising Financial and Banking Laws (established March 2001, internal circular no. 1612). This commission resulted from the cooperation between the Banque du Liban, the Banking Control Commission, the Association of Banks in Lebanon and other private and public bodies.

Additionally, the BDL formed a Committee on Modern Banking and Financial Techniques and Information Technology (COBIT) chaired by the First Vice-Governor of the Banque du Liban. COBIT includes members from the BDL, the Banking Control Commission and the Association of Banks in Lebanon. COBIT reports to the Governor of the BDL.

The main objectives of COBIT are the following:

	Setting out a comprehensive strategic plan for the payment and settlement systems in the banking sector which would include advanced electronic techniques, with a view to developing and modernizing (1) the payment and settlement system in Lebanon, with the objective of adopting electronic means of payment, (2) the techniques of using the SWIFT network in Lebanon, (3) banking operations and services, including advanced electronic services, and (4) the circulars and decisions to keep pace with developments in the fields of electronic banking and financial services.
	Obtaining information and keeping abreast of the most recent technical developments and expertise in all matters relating to modern banking and financial techniques and information technology in Lebanon and overseas, via interaction with specialized committees as well as with domestic and international institutions and organizations.
	Reviewing the project of direct links between the Banque du Liban and the banking and financial sectors for the purpose of establishing and developing an inter-bank communication network.
	Examining the means and instruments by which the banking sector may contribute to the development of IT services and activities.
	Contributing to the development and modernization of automated and computerized operations of banks, financial institutions and other entities supervised by the Banque du Liban.
	Designing training programs for the staff involved in implementing modern banking and financial techniques and IT.