Spotlight: Lebanese banks witness normal operations after two-week closure amidst nationwide protest

Source: Xinhua| 2019-11-02 04:14:55|Editor: huaxia
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by Dana Halawi

BEIRUT, Nov. 1 (Xinhua) -- Lebanese banks witnessed regular activities on Friday after two weeks of closure amid the nationwide protests that led to the toppling of the cabinet, experts said.

Lebanon has witnessed in the past two weeks unprecedented protests whereby two million Lebanese took to streets, blocking streets, causing complete paralysis in the country with the closure of schools, a big number of businesses and most importantly banks.

A lot of people have been deprived of withdrawing cash from their bank accounts in the aftermath of banks' closure.

Even before the start of the protests, the Lebanese market had witnessed since August a shortage in U.S. dollar currency due to economic slowdown and the drop in cash injections from oversea Lebanese which have reduced the central bank's foreign currency reserves.

It is worth noting that the Lebanese central bank, commercial banks and other public institutions hold most of Lebanon's public debt which has soared to alarming levels in recent years.

People hence have become increasingly concerned about their deposits in local banks.

As a result, local economists warned that banks may witness the withdrawal of huge sums of money by citizens when they resume business after the protests.

Economists also warned that people may transfer their money to other banks outside Lebanon.

They have also voiced fears that some people will attempt to transfer big amounts of their money from the Lebanese pounds to U.S. dollars which would exacerbate the financial crisis prevailing the country.

Nadim Kassar, general manager of Fransabank, told Xinhua that he did not see any panic among people who visited the bank's branches on Friday to accomplish regular activities such as paying tuition fees, withdrawing cash and other normal operations.

He added it's normal that banks were crowded because they have closed for 12 working days.

"Some people wanted to test the system so they asked to transfer a sum of their money to U.S. dollars or to banks outside Lebanon just to make sure that the system is working," said the general manager.

He explained that people generally prefer to keep their money in Lebanon because they get paid high interest rates on deposits while banks outside Lebanon offer little interest and sometimes no interest at all.

Kassar added that Fransabank did not impose restrictions on cash withdrawals and people were free to withdraw the amounts they want.

"We cannot force people to keep their money," he said.

Likewise, Fadi Daouk, general manager of Bank Misr Liban, said there was certainly a crowd at his bank since banks have been closed for the past two weeks, besides, a lot of people especially the aged ones do not have credit cards to withdraw cash from ATM machines.

Daouk said that some banks are imposing a few restrictions on the amounts that can be withdrawn by their clients and people have not opposed to such measures.

Daouk noted that the Lebanese usually prefer to keep their money in the country because the procedure of opening bank accounts outside Lebanon is too long.

Meanwhile, Tanal Sabbah, owner of Lebanese Swiss Bank, said that his bank witnessed some transfers from Lebanese pounds to the U.S. dollars which is normal since Lebanon is going through an uprising.

"This is a force majeure. It is normal to witness some transfers," he said.

But he added that activities at his bank's branches were very regular and he did not see any panic among people.

However, Sabbah said that what was remarkable on Friday is the attempt by some people to withdraw extra amounts of cash to keep them in their houses in case protests begin all over again.

One banker told Xinhua on condition of anonymity that his bank's branches witnessed normal activity.

"We may witness the outflow of some small deposits and what was circulated on social media about huge amounts of money being transferred to other countries is not true," he said.

Media reports circulated in the past days warned against the withdrawal of big amounts of cash from Lebanese banks which is why financial institutions were keen to keep their doors shut during protests.

However, the Association of Lebanese Banks has previously announced that banks have shut their doors down during protests for security reasons.

According to Central Bank figures, total customer deposits up to August reached 172.5 billion U.S. dollars, 72 percent of which were in foreign currencies.