Lebanon's banks to extend closures following security incidents

Initial shutdown was called after armed depositors held up several banks last week

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Banks in Lebanon have extended a three-day closure that came after several lenders were held up last week by armed depositors trying to retrieve their savings.

The banks began their initial three-day closure on Monday following a decision last week that was motivated by security fears.

A banking sector source told The National that banks would remain closed on Thursday. Later on Thursday evening, a statement from the Association of Banks in Lebanon (ABL) did not give a time frame as to when the closures would end.

In justifying the shutdown extension, the ABL cited the continued risks that bank employees and customers face. It also pointed to an “absence of any procedures or even assurances” from the government and security forces that would ensure a safe working environment.

The ABL board had met at noon on Wednesday to discuss the matter.

Announcing the initial closures last week, the ABL said it came “after the repeated attacks on banks and the physical assaults on bank employees and their dignity”.

An economic collapse described by the World Bank as one of the worst in modern history, has plunged much of Lebanon into poverty and eroded more than 90 per cent of the currency's value.

There are severe shortages of basic essentials including bread, medicine, water and electricity.

In 2019, banks imposed informal capital controls, severely restricting access to hard currency and compounding economic difficulties faced by people in Lebanon.

It has forced some desperate depositors to take matters into their hands. Many in Lebanon have praised the actions of the armed depositors.

Sali Hafez, who held up a bank branch with a toy gun in Beirut’s Sodeco neighbourhood last week, managed to get $13,000 out of her savings.

Still, after an emergency meeting last Friday, Interior Minister Bassam Mawlawi said that “reclaiming rights in this way … can break the system and make the rest of the depositors lose their rights”.

On Wednesday, a judge ordered the release of four people who had been detained for their involvement in some of those bank hold-ups last week.

Updated: September 25, 2022, 8:19 AM