Tripoli, 8 June:
The Central Bank of Libya has approved the resumption of issuing pre-paid debit cards. It has done so on . . .[restrict]the basis of Law No.1 of 2005 and Publication no. 16 of 2003.
Under the latest regulation announced during the week, the Central Bank has granted permission to all commercial banks to issue these cards against personal accounts held in Libyan dinars provided that such accounts are fully functioning and have not been frozen as a result of judicial proceedings.
The following conditions apply:
- The debit card should only be issued upon the customer’s request;
- The customer must have an existing Libyan Dinar account before a debit card can be issued to him/her from the card-issuing bank;
- The debit cards should only be used within the rules of law;
- The highest value of the debit cards shall be set at $10,000 and the lowest at $500;
- The customer’s account against which the debit card is issued must have sufficient funds to cover the card value;
- The approved standard exchange rates of the Libyan dinar shall adopted in all transfers, cash withdrawals and transactions. When credit cards are used abroad the outstanding balance will be deducted from the customer’s account in Libyan dinars;
- The bank charges shall be set at 1 percent of the total value of any foreign currency;
- The bank shall establish a comprehensive database system in order to monitor transactions and keep track of all issued cards so as to avoid duplication, not issue more than one card per customer and en sure customers do not exceed their permitted limits.
In addition to the decision on debit cards, Central Bank governor Sadek Elkaber also announced this week that there are to be no further restrictions on cash withdrawals from current accounts in banks in Libya.
The aim is to restore faith in the banking system, hit when the Qaddafi regime imposed draconian limits on the amounts people could take from their accounts — just LD 750 per month. As a result, people opted to keep their money at home or in the office. It was estimated in February that there was LD 15 billion held in cash by individuals and businesses compared to less than LD 1 billion in all the banks combined.
The limit was raised to LD 2,000 earlier this year but it was seen as a brief stepping stone to this week’s complete lifting of the restrictions.