File - The building housing the Lebanese Central Bank in Beirut, Thursday, Oct. 16, 2014. (The Daily Star/Hasan Shaaban)
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The Lebanese Central Bank has ordered banks and financial institutions to raise their provisions on commercial and retail loans, according to Byblos Bank."This measure is a stress test to assess the quality of assets and meet the requirements of Basel III," Joe Sarrouh, the adviser to the chairman of Fransabank, told The Daily Star.Banks must also build general reserves against their performing commercial loans portfolio, equivalent to at least 0.25 percent of a bank's loan portfolio at the end of 2014, 0.5 percent at the end of 2015, 1 percent at the end of 2016, and 1.5 percent at the end of 2017 . These provisions must be at least equivalent to 0.25 percent of a bank's retail loan portfolio at the end of 2014, 0.5 percent at the end of 2015, 1 percent at the end of 2016, and 1.5 percent at the end of 2017 .
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