Exclusive: Central Bank Issues Strict Warning to Banks: Tighten Letter of Credit Procedures or Face Penalties

Our source has exclusively obtained a circular from the Central Bank of Libya addressed to commercial banks and their compliance units regarding the issuance of letters of credit. This follows the bank’s observation of weak compliance with regulatory and supervisory requirements aimed at mitigating risks that banks may face both locally and internationally.

The Central Bank noted that the main issues include the presence of operating licenses that do not match the type of imported goods, along with the failure to provide several documents, including: tax clearance, valid commercial registration, value deduction documents, and proof of using electronic payment methods.

The Central Bank concluded its communication to banks by stating: All instructions must be strictly followed, and the integrity of the procedures for issuing letters of credit must be ensured to avoid negative consequences that could expose the banking sector to local and international reputational risks. Banks in violation will face legal measures against their management.