Lebanese spend morning waiting for money as banks reopen after two-day strike

Fears have spread that people may once again be locked out of bank accounts after recent strike

Fransabank in Lebanon had its safes seized on the basis of a judicial order. Reuters

Queues formed outside banks in Hamra, a busy district of Lebanese capital Beirut on Wednesday morning, as they reopened across the country after a two-day strike in reaction to judicial orders piling up against them.

Waiting outside the Bank of Beirut already for half an hour at 9am, Lama Khoury, 67, who asked for her name to be changed, told The National that she was tired but desperately needed money.

“I have no cash. Monday and Tuesday the bank was closed, so I rushed here early and as you see I’m still waiting in the line,” Ms Khoury said.

Fears have spread across Lebanon that people may once again be locked out of their accounts after the recent strike.

Depositors have been unable to access their savings since Lebanon’s financial collapse in 2019, triggered by soaring public debt due to state corruption and mismanagement.

The Association Des Banques du Liban (ABL) called the action at the start of the week a “warning strike” against what they described as the arbitrariness of judicial decisions.

The group called on “those concerned to stop evading their responsibilities and laying them on the shoulders of banks, and to take the initiative to assume their national responsibilities and the required steps to protect the public interest”.

Fouad Debs, the Depositors Union Co-Founder, told The National that the bank strike primarily hurts depositors who cannot access their salary.

“The banks believe they’re above the law, they don’t believe in justice and they think they can do whatever they want,” Mr Debs said.

“These statements are complete and utter lies, [showing] that they again are trying to change the discourse, [by saying] ‘we told the government our money is lost’ when the banks have actually made billions.”

He said the banks want to take the assets of the state before maybe returning some of the depositors' money.

“Once you commit a crime, you commit another crime, not to even cover it but just that there’s no one to stop you,” he said.

ABL gave a warning that judicial actions would “topple the banking sector”, seemingly ignoring that the industry has already been crushed, as Mr Debs pointed out.

“They themselves toppled the banking sector. No foreign bank wants to deal with Lebanon, not one person, Lebanese or foreign, would put one fresh dollar into their bank account any more,” he said.

When asked if there would be future strikes, ABL secretary general Makram Sader did not rule out the possibility but said his group was “relying on the independent judicial system in Lebanon” to prevent further strike action.

“The concerned judge is biased against banks when it comes to prosecutions, [they use] social media platforms to tweet against banks, which is unethical,” Mr Sader said in a written response.

The assets of six banks have been frozen since March 14 and their executives have been banned from travel.

Credit Bank, Banque du Liban et d’Outre Mer, Bank of Beirut, Societe Generale, Bankmed and Audi Bank had their assets frozen due to a continuing investigation by Judge Ghada Aoun into their transactions with the Central Bank.

“It’s a very good development, especially when compared to what’s been happening for the past two years and five months where the judiciary have been completely asleep or collaborating with the banks,” Mr Debs said.

A closed Bank of Beirut branch on the first of a two-day strike. Reuters

“It is outside the general prosecutor’s powers to freeze assets or ban travel, which is within the powers of the investigative judge. Further, the local authorities refused to step her aside,” Mr Sader said, highlighting that the association is awaiting an independent judge.

Legal experts are divided over the legality of Ms Aoun's judicial proceedings. She denies accusations of being politicised.

Fransabank also had its safes seized on the basis of a judicial order to reopen the account of depositor Ayad Ibrahim and to pay out his money in full, though a court appeal was filed against this action on Tuesday.

The judiciary alone cannot solve the financial problem in Lebanon.

“We need a plan, a comprehensive, transparent and fair, just plan with accountability that will take us out of this crisis, without that the rush on the banks will continue, people will still not have any trust in the banks,” Mr Debs said.

Mr Sader told The National that since 2006 the ABL has been warning against the continuing state financial policies and issued many statements highlighting the mounting risks of the large fiscal deficits.

“Since 2019 – the beginning of the crisis – ABL has been repeatedly requesting a comprehensive financial recovery plan [and] demanding the issuance of a Capital Control Law and a comprehensive financial recovery plan … to protect deposits,” he said.

However, depositors were still the group most affected.

As Jamil Hamady, 61, walked off from Credit Libanais, he shook his head in despair because he still could not withdraw 200,000 Lebanese lira – less than $7 on the day’s parallel market.

“I have no idea if they will seize our money again. Even now I can’t get the rest of my money,” Mr Hamady said.

Updated: March 23, 2022, 4:56 PM