Question & answer

Q.1 What is investor’s financial Insurance ?: the investor’s financial fund: it is an independent N.G.O ( Non Government Organization, Administratively , and financially an independent financial institution, aiming to insure lodgment in Public Libyan Banks, in order to encourage citizens Investment, and to guarantee trust in the Banking System, and it is subject to the Supervision of Central Bank of Libya.

Q.2: What is the INAS ( Investor’s Insurance System) The goal is to construct a Fund according to the Article (91) of the Law No. 1/2005 pertaining Banks & Amendment, which entails ” The construction of Fund named : National Insurance Fund, to take care of the Lodgments in the operating banks in Libya, according to the amendment jurisdictions of the conventional Islamic banking system, as stated in the amendment of the contents of the mentioned Law. Moreover, some jurisdictions were added to save elements %, Some jurisdictions were added to some elements of the conventional Banking system.

Q3: What is the role of the Investors’ Insurance Fund? The most important role is to participate in achievement of stability of the Financial system to protect minor investors, through the Investor’s Insurance Fund System. In addition to that, aiming to achievement of Best Management for Banking risks to arrive at the requested stability.

Q. 4: How can the fund participate to arrive a State Financial System? The Fund participate to achieve financial stability through role assigned to it by the Memorandum & Articles of Association by following up perpetually the financial Institutions for the Banking members, for its evaluation through coordination with Central Bank of Libya, to identify the probabilities to cease payments (upon Bankruptcy). Through its inspection and follow-up, the Fund cooperates with the Central Bank of Libya ( CBL) to identify the banking lodgment and development, and the Banking liquidity from one side, and from the other point to compensate Investors for their lodgments, by following a mechanism that guarantee compensation of Investors according to that mechanism.

Q5: What are the Banking members of Investors INAS Fund ? Depending upon the text of Articles ( 91) of the Law Number (1) for the year , 2005 which stipulate that INAS fund has to be constructed to take care for the Banks Lodgments Insurance Operations in Libya, to compose the membership of all the operating banks which accept lodgments, as stipulated by texts (4) of the of the fund Memorandum, which composes all Banks and that are licensed to accept lodgment. Those banks are compelled to join the Membership. 1. Gamhouriya Bank. 2. Al-Wihda Bank 3. Sahari Bank B.N.P Paribas. 4. National Commercial Bank . 5. Alwafa Bank. 6. Aman Bank for Commerce and Development. 7. Bank of Commerce & Development . 8. Development Bank. 9. Al-Ijmaa Alarabi Ban 10. Assarya Bank 11. Waha Bank 12. Arab Bank of Commerce 13. Unity Bank 14. North Africa Bank 15. First Gulf Bank. 16. Libyan – Qatar Bank 17. The Libyan Arab Foreign Bank

All those Banks their portion of fund

Q. 6: What are the lodgments comprised by Investor’s Funds? In its Second meeting for the year 2010 held on 31.5.2010,the fund Board of Directors determined the lodgments that are subject to those funds which are subject to those which are not subject to INAS according to the following : 1. INAS fund comprises the Banks lodgments of the Member Banks, in Libyan Dinars (LYD). All the member Banks settled their portions in the share Capital (current accounts lodgments for a short term, savings accounts) for all people, partnerships, companies and Establishments, for both private and public sectors Establishments and Management entities, that will be within maximum limits of Security, as determined byi the Memorandum and Articles of Association of the Fund. 2. the following incidents are excluded from the fund. The following lodgments: • lodgments of a commercial bank within another bank • lodgments of those Managers of the banks in which they are employees. (Chairman & members of the Board of Directors,. • General Manager, his deputy and his assistants). Lodgments of persons assigned to audit the bank in which he lodged his investments ( Manager of Internal Audit. Head of representation unit , Manger of Risk Management, External Audit, Investment of Foreign company (during that trip).

Q.7: Does the Lodgment of Investment under the umbrella of the Fund requires submitting application ? – The lodgment in INAS Fund does not require submitting my written application , or documents or payment of any awards by Investors, but guaranteeing of the Banking lodgment automatically as soon as entering the bank which manages the investment in membership of the fund ( obligatory membership according to Law), in addition to confirmation that the Investors do not defray any costs vis-à-vis obtaining the Insurance provided by the fund.

Q.8: Who pays the value of insurance fees, i.e. the investors? And what is the value? Payment of annual subscription is paid by The members banks, on behalf of their agents, according to the Memorandum & Articles of Association that has been prepared according to the fund.. We refer herein to the Central Bank of Libya, which paid its shares in the Capital one lot, to confirm its keenness and support for the construction of the fund with possibilities and efforts that enable it to face any of the member banks, the ratio of fees are determined as a ratio of total of lodgment deductions from member banks as they are , as at 31.12…. of the past year in which the fees are paid.

Q.9: Are there limits of guaranteeing lodgment of funds ? Yes, these are insurance limits, determined by the articles of Association, in a manner Higher determined for guarantee which will be paid and checked and amended periodically by the Fund Board or Directors, in a manner to achieve the goals for which it was constructed.

Q10: is it possible to add ( additional fees) if the value of the lodgment extends the limits of Insurance? This is impossible, because guarantee of Banking investments is not similar to insurance on properties or life assurance, but it is a system tha aims to cash authorities of the States which guarantee enough Insurance to investors in order to re-reimburse their investments, whereas in case of their banks for financial crisis.

Q 11: How does the investment fund guarantees the lodgments of Investors? The fund guarantees the investors funds according to the Memorandum of Association, in a manner that to compensate the investors for their funds immediately(with a period of one month at maximum) about lodgments in Libyan Dinars within the insolvent or Bankrupt bank.

Q.13: if the investor lodges amounts in several member banks, are those amounts collected, and dealt with as one account for the purpose of determination of compensation (guarantee). No, lodgments in different banks enjoy a separate guarantee. The guarantee or compensation will be applied on maximum limit for each lodgment in each bank of those banks singly.

Qa.14: is it possible to give an example about compensation Mechanism by investors fund in case of Bankruptcy of their bank? This is also very simple. Firstly reference should be made to that chapter six , have been specified to determine the jurisdiction relevant to lodgment guarantee. We will deal with the following example for clarification : e.g. An investor owns an investment in (5) bank, in a number of its branches for the value of 150,000.—Libyan Dinars, then the bank declared its bankruptcy . How could the interested be compensated for his investment according to the memorandum of the Fund. The Memorandum of the fund followed the bracket mechanism , in determination of the value of the Insurance. It is determined in article (28)of the Memorandum of the fund . The Memorandum of the fund follows the bracket mechanism in determination of the value of the Insurance. I is determined in article (28) of the Memorandum . Therefore the amount due to INAS (1) if the lodgment 1.1 – 10,000.- Libyan Dinars, (2) 10,0001- 100,000 – 50,000 Libya Dinars (3) 100,001-150,000 12,500 Libyan Dinars Total deserved INAS: 72,500 Libyan Dinars.

Q 15: Are the investments of expatriates in Libyan Dinars is comprised by INAS or No? Yes, it will be comprised by the Insurance, because the nationality of thie investor (owner of the investment) does not effect the lodgment guarantee. Hence his lodgments enjoy the guarantee according to those who have the Libyan nationality.

Q. 16: Could the fund guarantee the client lodgment in foreign currency? In consideration that the fund is the stages of formation . the fund could not guarantee lodgment in foreign currency at present , but the legislator did not stop before the possibility of guaranteeing those lodgments in Foreign Currency in the future . It is important to finance completion of the fund abilities to enable it continue its development according to surrounding environment. Therefore Foreign currency lodgment may intervene to be lodged amounts guarantees for fund’s lodgment, especially if it was revealed that the Bank’s foreign lodgments are high.

Q. 17: what is the maximum limit for insurance? Article 28 of the Memorandum determined the maximum limits provided by the fund, where it has been determined (1) it covers the maximum bracket for the Investors, specially the younger investors, The submitted guarantee should serve the investor . Thereof the limits of the Insurance should serve the investor, and achieve th purpose expected there from, so that it guarantees that there is no effect in manner that it reverts negatively in his routine of his daily life. Hence the limits were determined to be within the guarantee limits according the Memorandum as follows : (1): full guarantee if the investment does not exceed 10,000 dinars. (2): guarantee with half investment. ,if the value of the investment is between 10001 – 100,000 Dinars—Libyan Dinars, (3) Guarantee with quarter of lodgment if the lodgment value is between (100,001 to 400,000.-Libya Dinars) (4): Guarantee with one eighth lodgment between 400,001 Dinars to 1,000,000 (5): guarantee with one tenth of the value of the deposit, and with maximum limit of 250,000 Dinars if the value of the deposit exceeds 1,000,000 Dinars. In this regard, reference should be made to the guarantee provided according to the Memorandum of INAS investors, has been extended the value of guarantees submitted by similar corporations in other countries, which has the priority in this field, a matter which confirmed the desire of the responsible in setting polices in Libya ,a matter which supports the banking sector to solve any problem which may face it through providing compensations (guarantees) and with the Prices as shown above.

Q.18 What is the destiny of the investor who owns an investment which is limited according to the Memorandum? The investor receives the value of Guarantee, referred to earlier, as an immediate compensation (during one month from date of claim), then to compensate him about the remaining amount, according to the obtained results from liquidation committee, according to priorities as determined by the Commercial law .

Q. 19: What is the requested role of to be performed by the Investor? The investors are requested to follow up, and to supervise the financial analysis of the banks with which they deal, specially investors who are able to perform such analysis, in a matter that reverts to the decision taken by tem for lodgments with all subjectivities and polarization , which reverts to a role for decision will be based on two basic factors which are the degree of risks and relative consequences.

q.20: What is the relation of the fund with Central Bank of Libya? (CBL) the supervisory role on books are stand still by CBL. And that the role between the fund is a relation of formation, i.e. that the fund operates under the auspices of the CBL, in consideration that the construction of the fund came for adding a new entity amongst the National Banking Protection net., for which the banking system operates, Hence the Libyan Central Bank directs the components of that net banking supervisory establishments, in order t achieve complete integration and amalgamation and to strengthen cooperation and exchange information and expertise amongst them to save the cash policy goals in the State. The construction of the fund does not mean the termination of the Ban’s supervisory role, but it supports that supervisory, and attracts its role in consideration that CBL is the supervisor of Banking system, and its responsibility in achieving stability, in consideration that it works under cover of CBLK, until unification of promoters efforts, till attaining to achieving the financial stability.

Q.21: What are the banks which are recommended by the fund in order to lodge their investments? A: The Fund does not provide any recommendation or any information or statements in this matter, but the responsibility is born by he Investor who decides where can he deposit his money. But the fund investigates to find a decision for lodgment, based on subjective basis of ancillary risks and expected turnover.

Q.22: what is the distinction of the INAS find lodgment of investors, money in Libya compared with similar establishments in other countries? The most important distinction of the fund is represented by he guarantees provided by the fund, which outway that represented by similar entities, whereas maximum limits, as represented by the Memorandum of the Fund , 250 000.—two hundred and fifty thousand Libyan Dinars compared with other countries like USA, the Guarantee value does not exceed 100,000.00 US$. In UK the maximum limit is 20,000.00 Pounds Sterling, in Jordan 50 000.00 Dinars. This reverts the desire of Cash Authority, the most strongest banks not only in ht Arabic region , but also on the level of the world.