Banque du Liban tightens oversight on $300 million in startup investments

Banque du Liban has issued regulatory amendments to Article 8 bis of Basic Regulation No. 6116 to strengthen governance and oversight of investments made through the banking sector. These measures aim to protect the central bank's funds and ensure the recovery of rights and assets.

Since 2013, the central bank has provided over $300 million in financing through commercial banks for investments in startups, business incubators, accelerators, and venture capital firms. The central bank noted that such commercial investment activities are not part of a central bank's traditional mandate and raised questions regarding their compatibility with the Code of Money and Credit.

A review conducted by Banque du Liban revealed serious deficiencies in how many of these investments were monitored and managed by the involved banks, their appointed managers, and investment committees. Consequently, the new circular requires all relevant banks to provide full disclosure regarding the status and use of these funds to ensure accountability and financial discipline.