Lebanese banks close again after holdups by depositors seeking their own money

BEIRUT: Lebanese banks have unanimously decided to close their doors to clients indefinitely after a series of holdups by depositors seeking funds frozen in the banking system because of the country’s financial meltdown, two bankers told Reuters.

Banks will continue urgent operations for clients and back-office services for businesses, the bankers said, but front-office services will remain suspended after more than a dozen holdups in less than a month.

Banks closed for about a week last month in similar circumstances, but reopened at the beginning of October to allow employees to withdraw salaries.

Lebanon’s banks association has previously called on the government to enact formal capital controls to replace the informal controls banks adopted in 2019, but parliament has repeatedly failed to pass the law.

The government has made little progress towards reforms that would unlock an International Monetary Fund bailout to help ease a crisis caused by decades of wasteful spending and corruption.

Now in its third year, Lebanon’s financial meltdown has sunk the currency by more than 90 per cent, spread poverty, paralysed the financial system and frozen depositors out of their savings in Lebanon’s most destabilising crisis since the 1975-90 civil war.

Sali Hafez freed on bail

On Thursday, a Lebanese judge fined and issued a six-month travel ban to a woman who stormed her bank with a fake pistol and took her trapped savings to cover her sister’s cancer treatment.

Lebanon’s cash-strapped banks have imposed strict limits on withdrawals of foreign currency since 2019, tying up the savings of millions of people. About three-quarters of the population has slipped into poverty as the tiny Mediterranean country’s economy continues to spiral. The Lebanese pound has lost 90% of its value against the dollar.

Sali Hafez last month broke into a BLOM Bank branch in Beirut with activists from the Depositors’ Outcry protest group, and stormed into the manager’s office. They forced bank employees to hand over $12,000 and the equivalent of about $1,000 in Lebanese pounds.

Hafez was widely celebrated as a hero, and went into hiding for weeks.

Her lawyer, Ali Abbas, told The Associated Press that Hafez turned herself in Wednesday night, and that the bank had pressed charges. Another sister involved in the heist was with Sali.

“The judge decided to let them go on a bail of 1 million pounds each, and a six-month travel ban,’’ Abbas said in a phone interview from the Justice Palace. The judge originally issued a 5 million pound bail, but dropped the amount on the basis that the family was using whatever money they had to pay for cancer treatment.

One million Lebanese pounds was once worth over $666, but has since devalued to $25.

Hafez left the Justice Palace and posed in front of media cameras with a raised fist and smile. She said she is going to her bank branch to sign a document confirming the amount of money she withdrew during her heist and the amount still locked in her account.

“But how about you give me the rest of my money while things are calm, so we don’t have to go through that again?’’ she said to the press, addressing her bank’s management.