Lebanese Banking Control Commision- MH04022020 لجنة الرقابة على المصارف

لجنة الرقابة على المصارف
تتألف لجنة الرقابة على المصارف
من رئيس واربعة اعضاء
‏#سمير_حمود
:
-
رئيس لجنة الرقابة على المصارف.‏
‏-عضو في هيئة األسواق المالية.‏
‏-عضو في هيئة التحقيق الخاصة.‏
‏#احمد_ابراهيم_صفا
:
عضو في لجنة الرقابة على
المصارف منذ عام ٢٠١٠.
شغل عدة مناصب مع البنك
الكندي وجمال ترست بنك.‏
Mehdi El Husseini-04022020

‏#منير_حبيب_ليان
عضو في لجنة الرقابة على المصارف.‏
ممثل لجنة الرقابة على المصارف في الهيئة المصرفية العليا لدى
المصرف المركزي.‏
-
‏#جوزيف_الياس_سركيس
عضو تنفيذي في لجنة الرقابة على المصارف بصفته ممثل
مؤسسة ضمان الودائع.‏
‏#سامي_عازار
عضو لجنة الرقابة على المصارف.‏
Mehdi El Husseini-04022020

والية لجنة الرقابة على المصارف هي خمسة سنوات،‏ تنتهي في اذار 2020.
مخصصات لجنة الرقابة على المصارف المالية:‏
لدى لجنة الرقابة على المصارف ميزانية منفصلة تمول من قبل المصرف المركزي بعد موافقة الهيئة المصرفية العليا.‏
دور لجنة الرقابة على المصارف:‏
لديها دائرة مقسم بطريقة تضمن سالمة
ونزاهة وحسن سير عمل المصارف ومؤسسات
الصرافة باإلضافة الى أعمال أخرى.‏
١٥
-
I. Off-Site Supervision Department
Off-site Supervision Department is responsible for the on-going monitoring of banks and NBFI to
ensure financial soundness of institutions. The department also ensures effective enforcement of
regulatory and supervisory policies, monitors risk profiles, evaluates financial performance of
individual banks and NBFI on solo and consolidated basis, prepares off-site risk reports, suggests
enforcement actions and follows up on the institution’s compliance with the corrective measures.
To effectively discharge its function, the department uses variety of quantitative tools, including
CAMELS-BCOM rating system, peer group review in addition to key financial indicators calculated
from regular prudential information related to on- and off-balance sheet, profitability, capital,
liquidity, large exposures, risk concentrations, asset quality, related party transactions, interest rate
and market risk.
These are in addition to qualitative information including corporate governance, internal controls,
risk management derived from on-site inspection reports, external audit reports, supervisory reports
of subsidiaries operating abroad, Memorandum of Understanding in addition to frequent meetings
and continuous dialogue with the institution’s senior management.
Mehdi El Husseini-04022020

II.
On-Site Supervision Department
On-site Examination/Review is the earliest established activity of the BCCL and remains the core
instrument of banking supervision in Lebanon.
The BCCL has, at any time, around 10 On-site teams reviewing banks and other financial institutions
under its supervision.
Each team is made up usually of 3 to 7 members headed by a team leader.
The frequency (and comprehensiveness) with which On-site reviews are conducted depend on each
bank’s internal risk-rating. The ratings are not published, and are restricted to the BCCL Board.
The On-site review covers several issues, through a comprehensive process (On – site Examination
Manuel). The issues covered are specified in the “Outline of the On-site Reports”, which is an
internal document for the use of On-site examiners. The review usually covers :
• Loan Portfolio : The sample covered depends on several factors and can go up to 90% of the
loan portfolio of a bank. Each loan reviewed is classified by the examiners.
Reserves/Provisions are set accordingly as and when needed.
• Sovereign Exposure : Banks are required to have a study that sets the ceiling of their
sovereign exposures. These Ceilings would depend on factors, such as the bank’s liquidity
and capitalization. The currency of debt instruments is also taken into consideration
• Banks : Exposure to other banks is analyzed. It is a requirement that exposure to other banks
be set after appropriate study of each bank / correspondent and its financials and ratings.
• Capitalization, Earnings and Liquidity: of each bank is reviewed. The review covers the
accuracy of numbers. More importantly, it covers their adequacy compared to norms set
internationally (e.g. by Basel Committee) and locally (by the BDL & BCCL).
• Management : Management systems are reviewed with close scrutiny. Both the
organization and how well it functions are analyzed. Particular emphasis is given to controls.
Staffing is given special attention as well, especially in terms of adequacy. Risk Management
in banks has become an important part of the focus of the On-Site examination as well as
Corporate Governance ; Banks are expected to comply with Central Bank regulation issued in
July 2006, which is based on Basel guidelines issued in February 2006.
• Market Risks.
• Operational Risks.
• Information Technology: Assessment of the banks’ Systems accuracy and security, the
Business Continuity Plan.
• Anti Momey Laudering (AML): Assessment of the banks’ AML process and implementation.
• Basel II / III Implementation : The On-site teams carry out an assessment of each banks’
Action Plan for the implementation of Basel accords and analyses their Pillar I Capital
Adequacy in addition to their Liquidity and conduct a Supervisory Review and Evaluation
Process (SREP) on the ICAAP exercises of banks.
Mehdi El Husseini-04022020

III.
Financial Institutions Department
The department’s objective is to maintain financial stability of the Non-Banking financial sector
through continuous On-Site & Off – Site supervision of financial institutions regulated by Banque du
Liban. Those institutions perform a wide range of activities such as:
• Financial markets operations: Market making/liquidity providing, asset management,
brokerage services and loan providing against securities.
• Specialized lending through factoring and leasing operations.
• Loans to small medium enterprises (SME), retail banking and micro finance.
• Investment banking and advisory services.
The Financial Institutions supervision is based on Risk Based Approach (RBA) and allows the BCCL to
grade them according to their overall risk profile which is the result of the impact and the probability
of occurrence.
The risk profiles determine the scope of the On-Site missions that range from a thematic to a full
scope mission. However, spot missions are conducted based on early warning indicators provided by
the Off-Site unit within the department that monitors Macro & Micro prudential indicators on
regular basis.
IV.
Money Exchange Department
The Department supervises the Money Exchange Institutions, the Electronic Money Transfer Firms
and Specialized Lending Entities (Comptoirs) operating in Lebanon in a risk based supervision
approach.
The main functions of the department could be summarized as follows:
The Exchange Institutions:
o
o
o
o
Making specific recommendations to the license Cancellation of Exchange
Institutions, when off-site or on-site examinations show that the conditions set by
the Central Bank are no longer met.
Conduct on-site reviews by the examiners, This task aims to follow up on the
findings by the off-site Examination..
Both the on-site and off-site reviews evaluate management, and examine
compliance with different rules and regulations covering the Money Exchange
business.
Moreover, the findings related to the Anti-Money Laundering (AML) and Combating
the Financing of Terrorism (CFT) laws and regulations are coordinated with those of
the S.I.C.
o A Risk Focused Supervision is being initiated since the beginning of the year 2014.
o
Making recommendations for licensing new Money Exchange Houses.
Mehdi El Husseini-04022020

o
o
Conduct specific targeted examinations (changes in ownership, change of venue,
complaints etc… ).
Conduct off-site examinations over Money Exchange Houses.
The Examination is based on:
Electronic Money Transfer Firms:
1. Auditors Annual Reports through the control of the numbers in the balance
sheet, and income statements.
2. Periodic and monthly Reports from Money Exchange Houses.
3. Special Investigation Commission (S.I.C.) reports.
4. Monthly bank-note and metals shipments reports (from Exchange Houses
and Commercial Banks).
o
o
o
o
o
o
o
Making specific recommendations to the license Cancellation of Electronic Money
Transfer Firms, when off-site or on-site examinations show that the conditions set
by the Central Bank are no longer met.
Conduct on-site reviews by the examiners, this task aims to follow up on the findings
by the off-site examination.
Both on-site and off-site reviews evaluate management, and examine compliance
with different rules and regulations covering the Electronic Money Transfer Firms.
Moreover, the findings related to the AML and CFT laws and regulations are
coordinated with those of the S.I.C.
Making recommendations for licensing new Electronic Money Transfer Firms.
Conduct specific targeted examinations (changes in ownership, change of venue,
sub- agents reviews, complaints etc…).
Conduct off-site examinations over Money Exchange Houses.
The Examination is based on:
1. Auditors Annual Reports through the control of the numbers in the balance
sheet, and income statements.
2. Periodic and monthly Reports .
3. Special Investigation Commission (S.I.C.) reports.
Mehdi El Husseini-04022020

V. Studies Department
The Studies Department is responsible for preparing the required studies and analysis of banks,
Financial Institutions transactions and requests. These include but are limited to:
• Licensing and establishment of Lebanese commercial, investment or Islamic banks and other
financial institutions (locally and abroad).
• Establishing foreign financial institutions branches or representative offices in Lebanon.
• Opening and closing of banks / financial institutions branches (locally and abroad).
• Opening of representative offices of Lebanese banks abroad
• Banks / Financial institutions mergers and acquisitions.
• Transfer of significant ownership or controlling interest in banks / financial institutions held
either directly or indirectly.
• Increase of Capital, allocation of cash contributions, issuance of stocks and bonds, and
capital restructuring.
• Other matters related to banks / Financial institutions requests concerning compliance with
Lebanese banking rules and regulations.
The studies Department was established in October 2001. It is responsible for studying thoroughly
the applications and requests of Banks and Financial Institutions.
In addition to the above, the Department recommend to BCCL board the proposed decisions on the
requests received. The studies and analysis take into consideration (where applicable) the
compliance of each Bank / Financial Institution with prudential rules and regulations, and other
indicators generated by the other off – site departments (after evaluation the Bank / Financial
Institution risk profile, taking into consideration the Lebanese banking / Financial Instituions sectors
risk profile).
The Department may also conduct certain “on – site” spot reviews in the objective of verifying
certain requests and analysis when needed.
VI.
Risk Assessment Department
The Risk Assessment Department was established in 2009 as a move toward Risk-Based Supervision.
Its mandate is to ensure that banks have in place a comprehensive risk management process to
identify, measure, evaluate, monitor and control or mitigate all material risks and to assess their
averall Capital Adequacy and Liquidity Adequacy in relation to their Risk Profile and in line with Basel
III requirements.
Mehdi El Husseini-04022020

The Risk assessment process adopted by the department includes a review of the quality, quantity
and availability of capital and liquidity resources of banks.
A wide range of supervisory techniques are used, including Stress Testing exercises that provide
information on the major vulnerabilities and identify major risk concentrations for each bank.
The Risk Assessment Department supports the On-Site teams and relies on their assessment of the
quality of risk management and internal controls surrounding material risks.
VII.
Regulation, Macro Prudential & Consumer Protection Department
The department is in charge of three
functions:
1. Regulatory
Development: The
department is responsible
for developing prudential
Regulations and
implementation guidance on
policies issued by the Central
Bank of Lebanon, based on
sector needs and in line with
international standards and
best practices.
2. Macro Prudential
Supervision: The department
is responsible for identifying
and monitoring risks and trends within the Banking Sector, and macroeconomic
developments in countries where Lebanese banks have significant activities, based on a set
of tools and indicators, to address proactively potential risks. It prepares regular banking
sector stability reports highlighting main developments and risks.
3. Consumer protection: The department is responsible for promoting and monitoring banks’
and other financial Institutions’ compliance with consumer protection rules, regulations and
best practices, and developing related guidance and regulations
VIII.
IX.
Information Technology Control Department
Information Technology Department
The Information Technology department at BCCL was established in 1991.
Mehdi El Husseini-04022020

It is responsible for the development and maintenance of an information technology
environment that would enrich the examination process with automated and meaningful
reports and analytics.
The IT department main roles are:
• Developing, maintaining, and upgrading the BCCL central Oracle Database
applications.
• Collecting electronic data from Banks and Financial Institutions.
• Validating and processing the collected data to produce informative indicators.
• Developing analytics and produce informational reports.
• Maintaining and managing the Data Warehouse application which provides remote
access to on-site examiners from the banks which they supervise.
• Maintaining the well-being of the IT infrastructure, networks, and computer
equipment.
• Automating the various business functions at BCCL.
X. Subsidized Loans Department
This department specializes in monitoring the compliance of banks with the conditions of
government subsidized loans. The Department studies a sample of subsidized loans in banks and
ensures that they are in accordance with BDL and BCC circulars.
The department checks invoices & statement of accounts of subsidized loans, and verifies the
conformity of loans utilization with the purpose of the loan. Other functions of the department are
review of early settlement of subsidized loans, and loan transfer from one bank to another, in
addition to investigation of financial groups.
The subsidies take two different forms. The first form is the payment of part of the interest paid by
certain borrowers in a particular sector. These loans are:
• Industrial loans, Touristic loans, Agricultural loans, Software and technology development
loans, and handicrafts loans.
• Loans that are guaranteed by Kafalat S.A.L. (a company which guarantees some loans to
small and medium enterprises).
• Loans granted according to the agreement signed between the Lebanese government and
(the European Investment Bank – IFC – AFD).
The other major form of subsidized loans is exemption (or reduction) of Legal Reserves held at BDL.
These loans are extended to the following categories:
• Subsidized loans guaranteed by Kafalat S.A.L.
• Housing loans granted by banks based on a protocol signed with the Public Housing
institution.
• Housing loans granted by banks based on a protocol signed with the Military volunteers
housing unit.
• Long term housing loans that banks grant to their clients, and which are subject to the
exemptions that long term and investment banks are subject to.
Mehdi El Husseini-04022020

• Private and public sector bonds denominated in foreign currency and purchased without
recourse.
• Direct loans that the banks grant to the public housing institution to construct buildings for
rent by limited income groups.
• Loans granted to the Housing Bank S.A.L. that are used to finance the loans granted by the
bank.
• Micro credits granted with the approval of Micro – Credits Institutions.
• Housing loans granted by banks based on a protocol signed with the Mutual Fund of the
Magistrate.
• Housing loans granted by banks based on a protocol signed with the Directorate General of
the ISF.
• Housing loans granted by banks based on a protocol signed with the Directorate General of
the SG.
• Housing loans granted by banks based on a protocol signed with the Ministry of Displaced.
• Loans granted by banks to finance the environmental loans in both energy and non-energy.
• Loans granted by banks for High School Education.
• Loans granted by banks based on a protocol signed with the Ministry of Agriculture.
• Loans granted by banks to students to buy tablets.
XI.
Large Exposure Department
The main functions of the “Large exposure” (LE) department are:
• Conducting a preventive supervision of borrowers having critical sized exposures in the
banking sector.
• Unifying loan rating of a LE borrower among banks.
• Elaborating economic sector studies in coordination with the “Regulations, Macro prudential
and Consumer protection” department.
The Main objectives of the “LE” department can be resumed as the following:
• Avoiding unexpected delinquencies among LE borrowers that could lead to major losses for
the different players in the banking sector.
• Reducing systematic risk and contagion risks in the banking sector.
Preventive supervision consists of three majors tasks:
• Performing a Risk Focused Study approach for each LE’s borrower.
Mehdi El Husseini-04022020

• Reviewing LE portfolio at specific deadlines. These deadlines are set according to borrowers
rating and performance.
• Tracking and Monitoring, periodically, the major changes in the loan exposure of LE
borrowers.
Since 2016, the department became also in charge of assessing debt restructuring plan requests, as
per BDL circular No. 135, and got involved in spreading banks’ awareness.
XII.
Large Exposure Department
The main functions of the “Large exposure” (LE) department are:
• Conducting a preventive supervision of borrowers having critical sized exposures in the
banking sector.
• Unifying loan rating of a LE borrower among banks.
• Elaborating economic sector studies in coordination with the “Regulations, Macro prudential
and Consumer protection” department.
The Main objectives of the “LE” department can be resumed as the following:
• Avoiding unexpected delinquencies among LE borrowers that could lead to major losses for
the different players in the banking sector.
• Reducing systematic risk and contagion risks in the banking sector.
Preventive supervision consists of three majors tasks:
• Performing a Risk Focused Study approach for each LE’s borrower.
• Reviewing LE portfolio at specific deadlines. These deadlines are set according to borrowers
rating and performance.
• Tracking and Monitoring, periodically, the major changes in the loan exposure of LE
borrowers.
Since 2016, the department became also in charge of assessing debt restructuring plan requests, as
per BDL circular No. 135, and got involved in spreading banks’ awareness.
XIII.
Islamic Banking Department
The Islamic Banking department at the BCCL was established in 2012. Its mission is to put in
place a sound and effective framework of supervisory policies, standards, controls and
instruments that conform to international best practices and comply with Islamic banking
activities and applicable laws and regulations in Lebanon.
Mehdi El Husseini-04022020

The main functions of the Islamic Banking department are:
On-site Supervision of Islamic Banks: The department conducts full onsite examination of Islamic
banks. The study covers, in addition to the portfolio assessment, risk management, corporate
governance, anti-money laundering, management, capital adequacy, liquidity, compliance with
prudential ratios, laws and regulations.
Special on site Missions to address specific regulatory issues.
Special Reporting System: The department is developing a special reporting system for Islamic
banks that takes into consideration the specificities of Islamic Banking.
Financial Analysis Template: The department is in the process of preparing a financial analysis
framework for Islamic banks that covers all risks that banks are subject to, and the additional
risks that Islamic banks bear, due to their specific modes of operations and transactions.
Review and Update Guidelines and Regulations: The department reviews and updates
continuously the guidelines and regulations applicable to Islamic banks.
Source: http://www.bccl.gov.lb/
.
Mehdi El Husseini-04022020