Lebanese banks close ‘indefinitely’ for second time in a month
Depositors have staged over a dozen bank heists in the past several weeks after being locked out of their life savings for the past three years
By News Desk - October 07 2022

Sally Hafez, who forced a bank to release her family savings in September, gestures after she was released, outside the Justice Palace in Beirut, Lebanon 6 October, 2022. (Photo credit: REUTERS/Mohamed Azakir)

For the second time in the span of a month, Lebanese banks announced on 6 October a unanimous decision to close their doors to clients indefinitely in response to a wave of bank heists by depositors desperate to access their life savings.

More than a dozen banks have been held up by depositors over the last month, as desperate citizens have been storming bank branches armed with weapons – sometimes real, sometimes fake.

Banks closed their doors last month and only reopened on 26 September with an increase in security measures. However, these have not prevented the heists.

In response to Thursday’s announcement by the banks, the Association of Depositors in Lebanon (ADL) tweeted: “The policy of strikes and closures will only increase depositors’ resentment against the banks, and when you [reopen], you will face many incursions if there is no solution.”

Earlier in the day, Sally Hafez – who last month became a folk hero for holding up a bank and retrieving her savings with a toy gun – was released on bail after she had turned herself in to the authorities following weeks of being on the run.

Hafez, 28, was ordered to pay 1 million Lebanese pounds ($25) and received a six-month travel ban for her desperate actions. The money she recovered from the bank was intended to pay for treatment for her sister’s cancer treatment, she said.

Informal capital controls were put in place by Lebanese banks in 2019 as the financial system imploded thanks to widespread mismanagement and corruption in the financial sector.

These controls were never formalized by law, leaving depositors fed up with the arbitrary measures that have locked them out of their savings for three years.

Moreover, the government has made little progress toward reforms that would unlock an International Monetary Fund (IMF) bailout to help ease a crisis that has plunged over 80 percent of the population below the poverty line and slashed the currency’s value by over 90 percent.

Earlier this week, the Association of Banks in Lebanon (ABL) issued a statement pleading with depositors groups to hold talks to put an end to the wave of heists. They also used the statement to skirt any blame for Lebanon’s manufactured financial meltdown, instead saying the government is solely to blame.

The World Bank has described the man-made crisis as a “Ponzi scheme,” while the UN has accused the central bank and Lebanese officials of “human rights violations” for their role in setting the stage for this crisis.

Many banks in Lebanon are under investigation for their dealings with the Central Bank and its Governor, Riad Salameh, which involve the illicit transfer of billions of dollars abroad during the financial collapse of 2019.

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