DAMASCUS: Syria’s central bank has ordered commercial lenders to fully provision for losses tied to Lebanon’s financial collapse and submit credible restructuring plans within six months, a move that could reshape the country’s battered banking sector.
The directive issued on September 22 requires banks to recognize 100 percent of their exposure to Lebanon’s financial system, where Syrian lenders parked funds during the country’s civil war.
Syrian officials say the decision is part of a wider effort to clean up a banking sector crushed by 14 years of war and Western sanctions and help address a liquidity crisis that has stifled economic activity.
The order has prompted some banks to seek new investors or explore foreign acquisitions, three Syrian bankers told Reuters.
“They will need to provide us with a credible plan for restructuring, and now the countdown has started,” Syrian Central Bank governor Abdelkader Husriyeh told Reuters.
