The Lebanese government issued a law encouraging banks to merge with the aim of developing larger and more solid financial institutions, which should lead to a competitive banking sector that can cope with international competition. The law extends cheap long-terms loans and gives tax breaks to banks that acquire smaller banks. Recent mergers and the listing of some banks on the Beirut Stock Exchange are positive indicators of the re-emergence of the Lebanese Banking sector. Lebanon has an open banking system with an easily convertible currency and no restriction on the transfer of earnings in and out of the country. In addition, interest on various accounts is tax exempt.
Banks rent safe deposit boxes to customers under the same provisions of the law.
Violators of the secrecy law can be jailed for between three months and a year, and any convicted person cannot be employed by, run, or establish a bank. It regulates domestic banking industry, issues currency, stabilizes the Lebanese lira, tries to control inflation and advises on economic and financial matters. The Central Bank is the licensing body for local and foreign banks, their branches and representative offices. BDL s role is also to address the risks in the banking sector, and it has been extremely prudent in regulating the sector. There are further measures for solvency that make sure that risk in the banking sector is tempered by reinforcement of the bank s equity bases.