By Sami Zaptia.
London, 18 August 2020:
The eastern branch of the Central Bank of Libya based in Beida announced yesterday that it has started to collect the necessary data regarding the problems faced by local banks with Turkish foreign Letters of Guarantee.
The CBL said that it had already begun to collect the necessary data to be provided by commercial banks within its scope on the problem. It has set a deadline of seven days for local banks to send information on stalled transactions and send it to its relevant department.
A letter of guarantee is a type of contract issued by a bank on behalf of a customer who has entered a contract to purchase goods from a supplier. The letter of guarantee lets the supplier know that they will be paid, even if the customer of the bank defaults.
With Libya’s current political/economic crisis which has spilt over into its banking sector, very few foreign banks are willing to deal with Libyan banks.