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Lebanon: Depositors Highly Anxious Due to Banks’ Recent Measures

Lebanon: Depositors Highly Anxious Due to Banks’ Recent Measures

Friday, 6 December, 2019 - 08:45

Despite official statements by Lebanon’s Central Bank (BDL) and the Association of Lebanese Banks, depositors’ anxiety is mounting amid strict measures adopted by banks on capitals and withdrawals.

Congestion of cars parked randomly near bank branches across the country and the presence of the security guards and police officers at the entrances are all signs of mounting tension.

Inside the bank, depositors wait in lines for their turn.

A retired soldier stands behind 85 people before receiving a portion of his salary as permitted by the bank’s procedures.

An employee whispers to her friend, telling her to withdraw all the money she has the right to receive, even if she does not need it. “Why?” The friend asks. “Don’t ask. I don’t know. We follow the instructions and we have no right to understand the reasons.”

But the employee stresses that there is no fear for deposits in the long term.

“This crisis will be solved,” she says.

An employee of another bank, answering his phone, says that there are no dollars in the cash machine.

“We are waiting for the batch to come. As soon as it arrives, you have to get the required amount because the machines are being emptied at an insane speed,” he murmurs. “People are nervous and they are making us nervous.”

One of the citizens, who preferred not to wait in line and use the ATM instead, was surprised by the new restrictions on withdrawals.

She told Asharq Al-Awsat that a few days ago, she was allowed to withdraw from the ATM one million LBP per day. Today, only 500,000 LBP per day and $300 per week can be withdrawn.

These measures have turned the bank card into an ineffective means for the depositors. The middle and low-income Lebanese are frightened by their inability to collect their salaries.

In remarks to Asharq Al-Awsat, Lawyer Ali Abbas said: “Banking procedures are illegal under the Money and Credit Law, which regulates the relationship of banks with depositors, and does not allow restrictions imposed by banks. As for the commitment of banks to circulars issued by the Association of Banks, it is also against the law, because the Association’s circulars are related to the organization of the internal work of banks, and not to regulate the relationship of banks with depositors.”

“Therefore, the current measures are de facto procedures, and cannot fall within a state of emergency,” he remarked, explaining that only a governmental decree or a law by Parliament could declare an emergency state.

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