Higher Banking Commission

The Higher Banking Commission (the Commission) was established at Banque du Liban (BDL) in 1967, pursuant to Article 10 of Law No 28/67.
 
Mission
 
The main mission of the Higher Banking Commission is to:

• Impose administrative sanctions on any bank[1], leasing company[2], financial institution or financial intermediation institution[3] that:
  • violates its bylaws
  • violates the provisions of the Code of Money and Credit
  • violates the measures prescribed by Banque du Liban
  • submits incomplete or inaccurate reports or information
• Impose administrative sanctions on any exchange institution[4] that:
  •  violates its bylaws
  • violates the provisions of the Code of Commerce
  • violates the provisions of Law 347 of August 6, 2001, on Regulating the Money Changer Profession in Lebanon
  • violates the recommendations or measures prescribed by the Banque du Liban
  • submits incomplete or inaccurate statements or information
  • undertake any activity that damages the reputation of Lebanon in the field of tourism or finance

In addition, the Commission approves the bylaws and employees’ statutes of the Banking Control Commission[5].

Composition

The Higher Banking Commission is composed of :

	The Governor of the Banque du Liban, as Chairman;
	A Vice-Governor selected by the Central Council of the Banque du Liban;
	The Director General of the Ministry of Finance;
	A high-ranking judge, with a 10-year experience at least, approved by the Higher Judicial Council and appointed by Decree;
	A member of the Banking Control Commission, nominated by the Association of Banks in Lebanon; and
	The Chairman of the National Deposit Guarantee Institution (NDGI).

The Higher Banking Commission’s incumbent members are:

[1] Article 208 of the Code of Money and Credit.
[2] Article 29 of Law No 160 of December 27, 1999, on Regulating Leasing Operations.
[3]  Article 23 of Law No 234 of June 10, 2000, on Regulating the Financial Intermediation Profession
[4] Article 18 of Law No 347 of August 6, 2001 on Regulating the Money Changer Profession in Lebanon
[5] Article 8 of Law No. 28/67 of May 9, 1967

Minutes of Meeting

The Higher Banking Commission meets upon the request of its Chairman or two of its members. The legal quorum is reached with the attendance of four members, and decisions are taken by a majority of three of the attending votes. In case of equality of votes, the Chairman shall have a casting vote.[1]

Procedures

The procedures to be followed before the Higher Banking Commission are as follows: 

• The Governor of the Banque du Liban shall: (a) summon the Chairman, or in case of impediment, the manager of the concerned institution[2], either directly or through the central bank’s employees in charge of serving the notification; (b) give the concerned Chairman or manager a copy of the Banking Control Commission’s report forwarded to the Higher Banking Commission; and (c) set a date on which the Chairman or manager must appear before the Higher Banking Commission[3].

• The Chairman or his duly mandated delegate may submit to the BDL Governor, in his capacity as Chairman of the Higher Banking Commission, written comments on the Banking Control Commission’s report, within three days from reception of the report. The Governor may, with a justified decision, extend this time-limit for three additional days[4].

• If the Chairman or manager does not appear before the Higher Banking Commission on the set date, the Higher Banking Commission may decide to postpone the final decision and grant an additional time-limit, or to settle the case in the absence of the Chairman or manager or without receiving their reply[5].

• The minutes of each meeting held by the Higher Banking Commission are recorded in a special register and signed by its Chairman and members.[6]

Decisions

• The decision of the Higher Banking Commission must be justified. When a decision concerns the appointment of a temporary manager or a supervisor, the Commission shall specify the powers vested in each of them.[1]

• Decisions taken by the Commission regarding the appointment of a temporary manager or the delisting of a bank must be published[2].

• The BDL Governor shall notify the Commission’s decision to the contravening institution.[3]

• The decisions of the Higher Banking Commission shall not be subjected to any ordinary or extraordinary form of administrative or judicial review.[4]

Sanctions

The Higher Banking Commission may impose the following administrative sanctions:

1. Issue a warning.

2. Prohibit specific operations or imposing other limitations or restrictions on professional activities.

3.  Appoint a controller.

4. Delisting.

5. Reduce or suspend credit facilities granted by the Central Bank.

6.  Prohibit the owner of the institution or any of the partners from carrying out their professional activities, either temporarily or in a permanent manner.

Sanctions (a), (b), (c), (d) and (e) are applied against banks and financial institutions[5].

Sanctions (a), (b), (c) and (d) are applied against financial intermediation institutions[6] and leasing companies.[7]

Sanctions (a), (b), (d) and (f) are applied against exchange institutions[8].

The administrative sanction of issuing a warning is imposed by decision of the Governor of the Banque du Liban, while the other sanctions are imposed by decision of the Higher Banking Commission.