North Africa Bank's Zliten branch is to be investigated by Libya's Administrative Control Authority (ACA) over claims of financial irregularities.

The authority is concerned about 24 letters of credit (L/Cs) allegedly granted to three companies owned by just one person.

Black market scam

The ACA alleges the companies' owner - who the ACA has not named - and the branch manager colluded to obtain US dollars at the Central Bank of Libya's (CBL) official exchange rate and sell the dollars on the black market at a huge profit.

Libya's official exchange rate is US$1 to 1.41 Libyan dinar (LD1.41) while the black market rate is currently US$1 to LD7.1.

The companies - a construction firm, an agricultural equipment dealer and a building materials importer - were taking advantage of the availability of foreign currency for imports of certain goods on L/C terms.

Arrest warrants

The L/Cs were issued without the normal investigations adopted by commercial banks to prevent fraud according to the ACA.

It has called for arrest warrants for the bank manager and company owner to be issued by the public prosecutor.

Other L/C news

Meanwhile, the CBL in Tripoli has announced the relaunch of L/Cs for companies importing basic foodstuffs such as meat, tuna and dairy products so Libyans can stock up ahead of Ramadan.

Currently, almost all foodstuffs other than subsidised staple products such as flour and oil, have to be imported using the black market to obtain hard currency.

The CBL implemented a similar policy before Ramadan last year when it lifted L/C restrictions only to reinstate these soon after the holy month finished.

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