Banking Law No. (1) of 1373 P.D. (2005)
Chapter One – The Central Bank
Part 1 – Nature and Functions of the Central Bank of Libya
The Central Bank of Libya shall be an autonomous institution with the status of a legal entity with independent financial liability. In this chapter, the word “Bank” refers to the Central Bank of Libya.
With the exception of matters related to the implementation of the Penal Code or the Law on Administrative Attachment, the Central Bank of Libya’s funds shall be considered its own funds and may not be attached to pay the debts of other entities.
The Bank shall be under the auspices of the secretariat of the General People’s Congress and shall carry out its duties in pursuit of its objectives as stipulated in this law within the framework of the government’s general policy. To this end, the Central Bank of Libya may adopt the principles and procedures it deems appropriate, and it may establish rules and regulations related to its operations and to financial, administrative, or other matters by means of decrees of the board of directors.
The head office of the Central Bank of Libya shall be in the city of Tripoli. The Bank may establish branches or appoint agents or correspondents elsewhere within or outside of Libya by decree of the board of directors.
The authorized capital of the Central Bank of Libya shall be LD500 million, which may be increased by decree of the secretariat of the General People’s Congress, upon the recommendation of the board of directors, in coordination with the secretariat of the General People’s Committee on Finance.
- The Bank shall have the following duties and responsibilities:
- Issue the Libyan currency and maintain its stability within Libya and abroad.
- Manage the government’s reserves of gold and foreign exchange.
- Regulate monetary policy and supervise currency conversion transactions within Libya and abroad.
- Regulate credit and banking policy and supervise its implementation within the framework of the government’s general policy.
- Achieve the goals of economic policy in terms of stabilizing the general level of prices and maintaining the soundness of the banking system.
- Manage the liquidity of the national economy.
- Regulate and supervise the foreign exchange market.
- Provide advice to the government on matters related to the general economic policy.
- In carrying out the above-mentioned duties the Central Bank of Libya may:
- Exert control on the amount, type, and period of credit available to ensure that the actual needs of economic factors involved in production and services will be met.
- Take appropriate measures to deal with economic and financial troubles, whether domestic or international.
- Monitor and supervise banking institutions to ensure the soundness of their financial position, monitor their performance, and protect the rights of their depositors and customers.
- Supervise the national system of payments, including clearing operations between banks subject to the provisions of this law, and develop regulations to govern the system.
- Any other measures required to implement the monetary, credit, and banking policies and enhance the supervision of banking credit.
The Bank may execute the following transactions in the course of engaging in its activity:
- Purchase, sell, import, export, and transact in gold bars and coins.
- Purchase and sell foreign currencies.
- Rediscount domestic commercial paper and promissory notes according to the rules established by the Central Bank of Libya’s board of directors.
- Manage and develop the government’s gold and foreign exchange reserves.
- Purchase, sell, or guaran