BEIRUT (AP) – Lebanon’s banks will remain closed indefinitely after rejecting a proposed government security plan, a senior official with the country’s commercial bank association said Thursday, amid waves of protests and heists targeting its troubled financial system. failing.
The Association of Banks in Lebanon initially announced a three-day strike, after storming at least seven bank branches last week, when attackers demanded the withdrawal of their seized savings. Among them is Sali Hafez, who broke into a Beirut bank branch with an imitation pistol and recovered about $13,000 in her savings to cover her sister’s cancer treatment.
Lebanon’s long cash-strapped banks were closed for two weeks back in October 2019, during mass anti-government protests fueled by the economic crisis. Since 2019, banks have imposed strict limits on currency withdrawals, which have tied up the savings of millions of people.
Since then, the tiny Mediterranean economy has continued to grow. The Lebanese pound has lost about 90% of its value against the dollar, and three quarters of the population have fallen into poverty.
“One of our demands is that we are provided with security to ensure that we can keep the banks safe,” Fadi Khalaf, Secretary General of the Association of Banks in Lebanon told The Associated Press. “When people are coming in with weapons and throwing gasoline everywhere, do we have to wait for someone to die before we do something about it?”
While banks across the country are closed, people have since been rushing to shops to wire their money overseas instead. The country’s largest wire-wiring company even brought in private security armed with assault rifles.
Khalaf said the banks were not satisfied with a security plan presented to him by the staff of Interior Minister Bassam Mawlawi on Tuesday. “He said they don’t have enough personnel and the banks should provide their own security,” he said. “But what can private security do if they have to deal with someone carrying a gun?”
The Union of Bank Employees Syndicates echoed similar sentiments in a statement on Thursday, refusing to return to work until they believe it is safe for them to do so.
Khalaf said the banks are currently discussing measures they can take on their own, but said they had not set a deadline.
Bank heists were largely celebrated among the Lebanese public, who accused the authorities of rampant corruption and mismanagement. Millions of Lebanese are struggling to cope with skyrocketing food prices and rampant power cuts and there is now much sympathy for people who choose to take matters into their own hands.
Depositor protest groups have vowed to continue to aggressively support people’s efforts to get their savings back.
Meanwhile, Lebanese authorities have been struggling for more than two years to implement financial reforms and restructure their economy to reach an agreement with the International Monetary Fund for a bailout. Among the reforms is a capital controls law that would restrict and formally control the flow of money into and out of banks.
The IMF criticized Wednesday after a meeting with Lebanese officials for its sluggish progress, but Caretaker Economy Minister Amin Salam told the AP that the country aims to adopt some of these reforms next month.
Until then, the country’s fiscal woes will continue to mount, said financial analyst Ghassan Chammas. Bank closures will not only further restrict people’s access to their funds, but will also slow down declining economic activity, including imports and exports.
“They must clearly set exceptions in the draft capital controls law for people who need to cover health costs, transfer funds abroad, or any other humanitarian exception,” Chammas told the AP. “You cannot isolate the country from the outside world.”