Introduction to Payment Systems

In Lebanon, the Banque du Liban (BDL), the central bank of Lebanon, owns and operates the major clearing and settlement systems as the final settlement of payment obligations among the participants in the banking and financial systems is done at the BDL. The BDL as the ultimate source of liquid funds to these systems is concerned about the soundness and the safety of these systems.

This section describes the main payment media used by the public, the role of the BDL in relation to payment systems and the interbank exchange and settlement systems. The main payment instruments used by the public are cash, cheques and payment cards. Settlement for cheques in domestic and foreign currencies is done through BDL's Clearing Houses. Settlement of local ATM transactions using a card issued in Lebanon started to take place through BDL in February 2003.

Payment instructions for the banking and financial sector are settled primarily by the BDL for BDL account-holders. International transfers not executed through the BDL are transacted through banks proprietary networks.

The clearing and settlement of financial instruments is carried out through Midclear, the Custodian and Clearing Center of Financial Instruments for Lebanon and the Middle East. Midclear is also the central depositary for Lebanon and is the central registrar for bank shares.