Middle East

Lebanese banks close again after hold-ups by depositors

Funds were frozen in the banking system because of the country’s financial crisis

People line up at an ATM machine outside a closed bank covered with metal sheets, in Beirut, Lebanon,on Friday. Banks in Lebanon will closed their doors until further notice following repeated security incidents. The banks had already shut down for three days in September after at least seven branches were raided by angry depositors in a week. Photograph: Wael Hamzeh/EPA

Fri Oct 7 2022 - 10:34

Lebanese banks have unanimously decided to close their doors to clients indefinitely after a series of holdups by depositors seeking funds frozen in the banking system because of the country’s financial meltdown, two bankers told Reuters.

Banks will continue urgent operations for clients and back-office services for businesses, the bankers said, but front-office services will remain suspended after more than a dozen holdups in less than a month.

Banks closed for about a week last month in similar circumstances, but reopened at the beginning of October to allow employees to withdraw salaries.

Lebanon's banks association has previously called on the government to enact formal capital controls to replace the informal controls banks adopted in 2019, but parliament has repeatedly failed to pass the law.

READ MORE

The government has made little progress towards reforms that would unlock an International Monetary Fund bailout to help ease a crisis caused by decades of wasteful spending and corruption.

Now in its third year, Lebanon’s financial meltdown has sunk the currency by more than 90 per cent, spread poverty, paralysed the financial system and frozen depositors out of their savings in Lebanon’s most destabilising crisis since the 1975-90 civil war.

(c) Copyright Thomson Reuters 2022

LATEST STORIES