Commercial banks in Lebanon are gearing up to enter the Syrian market later this year or early in 2002 after the Parliament in Damascus approved a draft law last week allowing private banks to operate across Syria, The Daily Star reported.
The move, which aims to attract badly-needed Arab and foreign capital into Syria, came after extensive preparations and lobbying by the Syrian government and President Bashar Assad himself, said the paper.
But many bankers in Lebanon are still waiting for more detailed laws from the Syrian Central Bank concerning financial markets, money and credit, foreign exchange and transfer of funds before making their final move.
Operating in Syria will be a big step for leading Lebanese banks, many of which have seen their profits shrink over the past three years due to the economic recession and a drop in interest rates on Lebanese T-bills.
Most banks confined their operations within Lebanese territories over the last 40 years. Many bankers said that the Lebanese market was getting smaller, stressing the need to open new markets to commercial banks, it added.
According to the law, which was amended several times at the request of the Lebanese Central Bank, 51 percent of the private bank should be in Syrian hands, while the remaining 49 percent would be left to foreign investors. The minimum capital of the private bank should be $32 million – Albawaba.com