Following the issuance of Law No. (1) for the year 2005 on banking institutions.The Central Bank of Libya(CBL) and in cooperation with some specialized institutions prepared a strategic plan to develop and reform the banking sector. In the course of a complicated worldwide economic environment, sustaining macroeconomic stability is becoming a matter of high necessity and which the CBL will encounter in the medium and long-run.
At the same time, the recent financial crisis triggered the formulation of new dogmatic mechanisms to achieve financial stability on a global basis. Such developments require further improvement and modernization of a number of functions of the CBL. In the new global and regional conditions the CBL is expected to provide enhanced support to the sustainable development of the domestic economy. Consequently, it is important for the CBL to continue modernization of the institutional management and development of its human capital. Addressing these challenges has become institutional priority of the CBL for the next strategic period. As dictated by the new priorities for the next strategic period the CBL will put in order its activities in the following guidelines:
- Modernize and develop the primary functions in accordance with the international standards;
- Establish a corporate governance system in line with the best practices;
- Build a modern and competent human capital;
- Provide active support to any economic development strategy for the government.
After realizing the weaknesses and gaps in the existing organizational structure, the Central Bank of Libya, in cooperation with experts from the International Monetary Fund, drafted a new organizational structure. The draft merges all the divisions of the same functionality in one sector, better defines the areas of work and comply with internal control standards. The Central Bank of Libya adoption of the new organizational structure to achieve strategic objectives at the sector level is as follows:
Senior Management (Board of Directors of the CBL, the Governor and his Deputy):
- The development of legal frameworks that are commensurate with the banking system in the state of Libya.
- Dissemination of strategic planning policy as a general policy for the banking system.
- Work to strengthen the community’s confidence in the banking sector, rationalize the banking services offered by banks, including contributing to the promotion of economic development at home. Simplify procedures, transactions and the development of means of payment.
- Study the needs of the CBL in the areas of technical support and attract experts and consultants in this regard. Also, cooperate with the corresponding central banks to achieve common goals.
- Formulation of the strategic plan of the bank and follow up its implementation in-line with the macroeconomic situation in the country.
- Follow-up on all the resolutions, directives and recommendations issued.
- Making clear media policy that aims to inform the citizens on the latest news and the dissemination of knowledge in banking and finance .
- Fight money laundering operations in coordination with the National Commission and authorities in charge.
- Follow-up on progress at the international level in the field of development in the banking sector and adopt what is relevant to the banking sector in Libya.
- The foundations of internal audit that correspond to the strategic plans set.
– Administrative and financial services sector:
- Create a suitable career climate by identifying the functions of each job position.
- Providing administrative services and financial support to the staff.
- Development of the staff to have the qualifications to work efficiently and professionally.
- Achieve maximum quality mechanisms.
– Central banking operations sector:
- Development of financial procedures to speed up banking services.
- The continuation of the work of electronic payment systems and the follow up of updates.
- Simplification of work procedures in all activities of the sector.
- Technical development of the best practices in sorting, counting and destruction to ensure the quality and cleanliness of the currency in circulation.
- The establishment of a museum for the Libyan currency in conjunction with the date of issuance.
- Ensure that the currency notes and coins meet the needs of the Libyan citizen and branches of commercial banks according to the geographical distribution of the state and work to modernize and develop the security procedures of the arrival of currency.
– Supervision sector:-
Continue in the progress of restructuring and reforming the banking system taking into account the effective application of regulatory standards on financial institutions.
Supervision of the financial conditions of commercial banks in terms of liquidity and the risk of their financial position. Regulate the commercial banks pledge to the decisions and laws established by the Central Bank of Libya and follow the instructions issued for the management of liquidity conditions in natural and abnormal conditions.
Motivate commercial banks to increase the size of their deposits with the activation of the role of reserve requirements as an effective tool for liquidity management.
Follow modern methods when granting funds that would ensure the prevention of faltering more than internationally accepted.
Create the appropriate environment for the work of the Libyan Stock Exchange (LSE) to improve economic performance at the State level.
Modernization and development of internal control mechanisms on a regular basis and supervision of the institutions that function under the umbrella of the Central Bank.
– Financial and monetary stability sector:-
- Maintain financial stability and monetary commitment and achieving targeted economic indicators- the targeted rate of inflation, exchange rates, interest rates, money supply …. Etc.
- Improve the quality of research, studies and statistics to serve the economy both at the maco & micro levels.
- Improve the effectiveness of monetary policy and exchange rate policy.
- Keep up with international standards and international financial mechanisms that suit the environment in the banking sector.
- Choose the best means and investment instruments to achieve liquidity and profitability.
- Preservation of capital and to achieve an adequate return.
- Balance between the needs of development and financial stability .