Banks in Lebanon have resumed their indefinite strike in protest at a succession of judicial decisions against the embattled financial sector, as the Lebanese pound hit a record low of 100,000 to the US dollar on the parallel market.
The Association of Banks in Lebanon had suspended their strike to allow customers to use their services, following an intervention by Prime Minister Najib Mikati.
But branches were closed on Tuesday morning as the strike resumed.
The latest strike comes after “new arbitrary judicial decisions” which would allow borrowers to pay back foreign currency loans at the long redundant rate of 1,507 Lebanese pounds to the US dollar.
However, the ABL said banks were forced to disburse foreign currency deposits in cash in the same currency, creating a system that was “for the benefit of some depositors”, but at the expense of others.
Such judicial measures “reduce the chances for depositors to recover their deposits in foreign currencies,” the ABL said.
'Abusive' measures by banks
Earlier this year, prosecutors also charged some banks and senior bankers with money laundering. Mount Lebanon public prosecutor has also sought access to the accounts of top bankers.
Fouad Debs, a lawyer and co-founder of the Depositors Union, a group that supports customers seeking access to their trapped savings, said banks were continuing with their “abusive” measures “against society by shutting their doors”.
“I wouldn't call this a strike. A strike is when you usually ask for something — a demand or right — while here the only thing the banks and bankers are doing by closing their doors is to evade justice and accountability, and to keep on putting the population on its news,” he told The National.
For years, the local currency had been pegged at about 1,507 to the dollar. However, that rate has been redundant since an economic crisis that first became apparent in 2019.
As of Tuesday morning, the pound is trading at 100,000 to one US dollar on the parallel market that has thrived since banks started limited withdrawals.
The local currency has now lost more than 98 per cent of its value.
Last month, the central bank announced a new official rate of 15,000 Lebanese pounds to the US dollar — well below the most used market rate.
Since 2019, banks have imposed informal capital controls, severely limiting depositors' access to their life savings.
Now, much of Lebanon has been plunged into poverty with severe shortages in basic essentials.
The economic crisis, described as one of the worst in modern history by the World Bank, has been blamed on decades worth of corruption and financial mismanagement by Lebanon's ruling classes — including its banking sector.
Further compounding the situation is a governance vacuum that has meant Lebanon is without a president since the end of the term of Michel Aoun in October. The bitterly divided parliament, where no bloc holds a majority, has failed to agree on a successor to the ex-army chief.
Mr Mikati's cabinet remains in a caretaker status, severely stripped of its powers.
