Lebanon's new central bank chief vows to combat money laundering as cabinet discusses bank reforms
Lebanon 's new central bank chief pledged to combat money laundering and terror financing, and to rebuild trust in the country's much-maligned banking sector as he formally assumed office on Friday.
Karim Souaid, a former asset manager, said work must be done to ensure that depositors who were locked out of their life savings after Lebanon's 2019 economic collapse have their money returned, albeit gradually, with priority given to holders of smaller amounts.
Financial institutions including the central bank 'and the Lebanese state must assume their responsibilities' in this matter, Mr Souaid said.
'The Bank of Lebanon will work to eliminate the illegal economy by combating money laundering and terrorist financing,' he said. The bank would work independently, without political interference, he added.
The 2019 economic collapse was blamed on decades of financial mismanagement and corruption by Lebanon's ruling elite. Mr Souaid's predecessor, Riad Salameh, has been accused of helping to embezzle hundreds of millions of dollars from the central bank.
Mr Souaid replaced interim governor Wassim Mansouri, who has overseen the central bank since Mr Salameh stepped down at the end of his term in 2023 after 30 years in charge. Mr Souaid's appointment was favoured by Lebanon's banking sector and President Joseph Aoun, although not by Prime Minister Nawaf Salam.
Changes to Lebanon's banking sector are among key reforms demanded by international backers and lenders before the country can receive assistance.
In April 2022, Lebanon reached a staff-level agreement with the International Monetary Fund on a comprehensive economic reform programme supported by a 46-month extended fund facility, proposing access to about $3 billion. However, Lebanese authorities have been accused of dragging their feet on the required reforms.
The Lebanese cabinet on Friday discussed restructuring the banking sector and is expected to continue its deliberations next week.
As the central bank governor, Mr Souaid will play a key role in managing the restructuring, and in restoring international confidence in Lebanon's financial system.
His appointment comes as Lebanon seeks to recover from the financial losses incurred since the 2019 crisis, as well as the cost of the latest war between the armed Lebanese group Hezbollah and Israel, estimated at about $11 billion by the World Bank.
The financial sector will be expected, at least by some countries, to combat corruption and curb any illicit financing for Hezbollah through the banking system. However, the group is widely believed to have used parallel economic networks to finance its activities.
The new US administration of President Donald Trump has taken a hard line on the status of Hezbollah, seeking its complete disarmament – a highly delicate and sensitive issue in Lebanon.
US envoy Morgan Ortagus arrived in Beirut on Friday for talks with Lebanese leaders, Discussions are expected to include contested border points between Israel and Lebanon in the south. Israeli troops continue to occupy five points on Lebanese soil, in violation of the ceasefire deal that ended the war in November.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Zawya
16 hours ago
- Zawya
Saudi Arabia's first-quarter GDP grows by 3.4%, beating flash estimates
Saudi Arabia's economy grew by more than expected in the first quarter of 2025, according to government data estimates, with lower oil prices impacting the economy less than previously forecast. First-quarter GDP grew by 3.4% compared to the same quarter of the previous year, beating flash estimates of 2.7% released in May by the Saudi General Authority for Statistics. "The upward revision was both due to a smaller annual contraction from the oil sector and stronger private sector growth," said Monica Malik, chief economist at Abu Dhabi Commercial Bank. Oil GDP shrank by 0.5%, while initial flash estimates had shown it contracting by 1.4%. Non-oil growth reached 4.9% compared to estimates last month pointing to a 4.2% increase. The impact of lower oil prices may have been blunted by the kingdom's increase of oil output. The kingdom faces a widening budget deficit with the International Monetary Fund saying Riyadh needs a price of oil of over $90 per barrel to balance its books compared to prices of around $60 per barrel in recent weeks. Saudi Arabia, the world's biggest oil exporter, lowered its July prices for Asian buyers at the beginning of June, after Organization of the Petroleum Exporting Countries and allies, known as OPEC+, hiked output for a fourth month. OPEC+ agreed to another big output increase of 411,000 bpd for July, having increased output by the same amount in May and June. Saudi Arabia is in the midst of a costly economic transformation program known as Vision 2030 that aims to wean the economy off oil dependency and has been funneling billions into massive new development projects. Saudi Finance Minister Mohammed Al-Jadaan said the kingdom would "take stock" of its spending priorities in response to a significant decline in oil revenue, the Financial Times reported in May. "We also expect to see some pullback in government spending to limit the widening of the fiscal deficit, which will likely weigh on non-oil growth," said Malik. Daniel Richards, senior economist at Emirates NBD, said that still, the bank believes that spending will remain high. "There is still sufficient project spending already in progress that growth will remain supported through this year and next at least," he wrote in a note. Saudi Arabia is committed to hosting several large international events, each of which require significant spending on construction and development. These include the 2029 Asian Winter Games, set to feature artificial snow and a man-made freshwater lake, and the 2034 World Cup, for which 11 new stadiums will be built and others renovated. Saudi Arabia's 2025 fiscal deficit is forecast at around 101 billion riyals ($27 billion). (Reporting by Pesha Magid; Editing by Toby Chopra)
Zawya
21 hours ago
- Zawya
IMF backs Oman's reforms, warns of global risks
A recent visit by a staff team from the International Monetary Fund (IMF), held in Muscat from May 21 to 29, 2025, has provided a timely and comprehensive assessment of Oman's macroeconomic trajectory. Led by César Serra, the mission engaged with national authorities on key developments, fiscal performance, structural reforms and medium-term outlooks. The statement issued at the end of the visit presents a cautiously optimistic picture of Oman's economy — one marked by resilience, reform and prudent policymaking — while also highlighting emerging risks that require close attention. According to the IMF, Oman's real GDP expanded by 1.7 per cent in 2024, up from 1.2 per cent the previous year. This growth was achieved despite reduced hydrocarbon output, in line with Opec+ production curbs. The performance reflects strong non-oil sector activity — especially in manufacturing, logistics, tourism and services — all core areas targeted under Oman Vision 2040's diversification agenda. Looking ahead, GDP growth is forecast to accelerate to 2.4 per cent in 2025 and 3.7 per cent in 2026, supported by the expected phase-out of production limits and sustained investment in strategic sectors. Inflation remains well contained, registering 0.9 per cent year-on-year during January–April 2025, providing a stable environment for consumers and investors alike. The IMF notes that Oman's fiscal surplus stood at 3.3 per cent of GDP in 2024, although this figure was slightly lower than earlier estimates due to accelerated public investment in infrastructure, health, education and water services. In parallel, Energy Development Oman (EDO) redirected a portion of its dividend payments to long-term investment, further contributing to the temporary narrowing of fiscal space. Over the short term, the fiscal surplus is projected to moderate to an average of 0.5 per cent of GDP during 2025–2026, before recovering in the medium term as oil output increases and reform measures take hold. Importantly, Oman continues to make significant progress in public debt reduction. Central government debt declined to 35.5 per cent of GDP in 2024, down from 37.5 per cent the previous year. State-owned enterprise (SOE) debt also fell to approximately 31 per cent of GDP, reflecting continued progress on governance and operational reform under the Oman Investment Authority. Oman's current account posted a surplus of 2.2 per cent of GDP in 2024 but is expected to shift into a moderate deficit of around 2 per cent of GDP during 2025–2026, due to softer oil prices and more subdued non-oil export growth. Nonetheless, the IMF expects a return to surplus thereafter, contingent on higher oil production and stronger trade performance. On the financial front, the banking sector remains robust. Omani banks are well-capitalised, profitable, and maintain strong liquidity positions. The sector continues to support private sector credit growth, backed by an expanding deposit base and a positive net foreign asset position. The IMF report underscores that structural reforms are advancing across multiple fronts. The Tax Authority is implementing its Tax Administration Modernisation Programme, the Central Bank of Oman is refining its liquidity management framework, and efforts are underway to expand access to finance through a well-structured financial development agenda. One of the most significant milestones is the operational launch of Future Fund Oman, a new investment platform designed to mobilise private capital into key economic sectors. Several projects have already been approved, and substantial co-investment from the private sector has been secured. Simultaneously, Oman is intensifying its efforts in renewable energy, particularly green hydrogen. These initiatives are vital for future energy security, export diversification and industrial development. The finalisation of the 11th Five-Year Development Plan (2026–2030) — framed under the objectives of Vision 2040 — is expected to play a critical role in consolidating these reform gains and accelerating economic diversification. Despite a broadly favourable outlook, the IMF warns of downside risks. Geopolitical tensions, global trade disruptions and prolonged weakness in oil prices could all undermine fiscal and external stability. Furthermore, elevated global interest rates could raise borrowing costs and dampen private investment, particularly if hydrocarbon revenues soften. To mitigate these risks, the IMF recommends that Oman sustain its current reform momentum, enhance private sector participation and continue building fiscal buffers. Policy consistency and timely implementation will be essential to navigating this uncertain landscape. The IMF's mission affirms that Oman has made tangible progress in strengthening its economic fundamentals. Growth is returning, inflation is low, debt is declining and reforms are deepening. The economy is now better positioned to respond to external shocks and capitalise on long-term opportunities. As Oman prepares to launch its next development cycle, the focus must remain on execution. Maintaining investor confidence, advancing green energy initiatives and ensuring inclusive growth will be critical to achieving Vision 2040's long-term goals. Oman's economic strategy is evolving with purpose. The challenge now is to maintain momentum, institutionalise reform, and drive the transition from a hydrocarbon-dependent model to a resilient, diversified and sustainable economy. 2022 © All right reserved for Oman Establishment for Press, Publication and Advertising (OEPPA) Provided by SyndiGate Media Inc. (
Arabian Post
3 days ago
- Arabian Post
India Charts New Course on Crypto, Tightens Tax Norms, and Eyes AI for Compliance
India is poised to release a comprehensive discussion paper on cryptocurrency regulation in June 2025, marking a significant shift in its approach to digital assets. This initiative aims to establish a clear policy framework, drawing from international standards set by the International Monetary Fund and the Financial Stability Board . The move comes amid growing global acceptance of cryptocurrencies and domestic pressures, including a nudge from the Supreme Court, to clarify India's stance on digital assets. Currently, India's cryptocurrency landscape is characterized by a 30% tax on gains and a 1% transaction levy, without formal recognition of crypto assets. These stringent tax measures have led to over 90% of Indian crypto trading shifting offshore, as reported by industry sources. The forthcoming discussion paper is expected to address these issues and invite public feedback, potentially paving the way for a more structured and innovation-friendly crypto ecosystem in the country. Despite the government's move towards regulation, the Reserve Bank of India maintains a cautious stance on cryptocurrencies. RBI Governor Sanjay Malhotra reiterated concerns about the potential risks to financial stability and monetary policy, emphasizing that there has been no change in the central bank's position. The RBI continues to promote its own digital currency, the e₹, as a safer alternative to private digital assets. ADVERTISEMENT In parallel with developments in the crypto sector, the Indian government has introduced stricter requirements for claiming tax deductions in the assessment year 2025-26. Taxpayers are now mandated to provide detailed documentation when filing their Income Tax Returns , particularly under the old income tax regime. For instance, claiming House Rent Allowance now necessitates disclosing the place of work, actual HRA received, rent paid, and landlord information. Similarly, deductions under sections 80C and 80D require specific policy or receipt numbers and details of the insurance providers. These measures aim to reduce fraudulent claims by enabling the tax department to cross-verify the eligibility of deductions. To assist taxpayers in navigating these complex requirements, AI-driven platforms like TaxBuddy have emerged as valuable tools. TaxBuddy simplifies the tax filing process by offering automation that pre-fills ITR forms using data from PAN, Aadhaar, and uploaded documents. The platform reduces manual data entry and minimizes errors, making the process faster and more efficient. Additionally, TaxBuddy provides expert assistance for complex tax situations, post-filing support for notices or audits, and secure data handling for peace of mind. Meanwhile, affluent individuals are increasingly leveraging agricultural income exemptions to reduce their tax liabilities. Under the Income Tax Bill 2025, while genuine agricultural income remains tax-free, the government has introduced stricter documentation requirements to verify farming activities. This move aims to curb the misuse of agricultural income exemptions by wealthy individuals who invest in farmlands primarily for tax benefits. Tax experts have highlighted cases where individuals with substantial agricultural revenues have legally avoided significant tax payments, underscoring the need for more transparent and equitable tax policies.
