Libya central bank defends commercial banks’ role in import finance

Libya’s central bank said on Monday that it does not grant documentary credits, responding to criticism from the country’s economy and trade minister over the handling of import financing.

In a statement, the Central Bank of Libya (CBL) said its role and that of the banking system is limited to supervision and regulation in line with applicable laws, and that the issuance of documentary credits is a commercial banking function.

The clarification followed comments made by Economy and Trade Minister Mohamed Hwej in a media interview on Jan. 17, in which he criticised procedures related to letters of credit.

The CBL said that granting documentary credits falls exclusively within the mandate of licensed commercial banks, which assess applications according to their own credit policies and documentary standards.

“The central bank’s role is limited to providing foreign currency coverage for approved documents after review,” the statement said.

The CBL added that responsibility for issuing commercial licences and registrations lies with the relevant administrative authorities, particularly the Ministry of Economy and Trade.

Once a company has obtained the required licences, commercial banks process applications based solely on the legal and financial documents submitted, without involvement in the licensing process itself.