Association of Banks in Lebanon announce 3-day lockdown amid holdups

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Banks across Lebanon have been witnessing hold-ups by depositors today, Friday, with the aim of recovering their deposits frozen due to the economic crisis.

Responding to the series of hold-ups - which have amounted to 6, however only 3 are confirmed this far - the Association of Banks issued a statement in which they voiced their decision to close down all banks for a period of 3 days in order to carry out necessary measures, reconvening at the beginning of next week to lay out the next steps. 

Read more: World Bank: Lebanon crisis among most severe since 1850s

The statement writes that after the repeated "attacks" on banks and the danger to which customers and employees are exposed, the board of directors took a decision to close the banks on September 19,20, and 21 in denunciation of what is happening and to take the necessary measures. 

"The board of directors will return to the meeting early next week to consider the next steps. The association also apologizes to all depositors for any inconvenience or delay that may result from this closure, because the safety of its employees and customers comes at the top of the priorities of the banks, in addition to the interests of depositors which the banks are trying to secure as much as possible in the current difficult circumstances that the country is going through," the statement wrote. 

Furthermore, the Association of Banks stressed that "violence has not and will not be the solution. Rather, the solution is to pass laws to address the crisis as quickly as possible."

Earlier today, a Lebanese man armed with a gun that turned out to be a toy raided Byblos bank and held hostages in a bid to free his savings frozen by the banking system, marking the third incident of the sort this week.

The escalation against the banking sector comes after Lebanese banks decided to lock most of the depositors' savings as the country undergoes one of the world's worst financial crises in recent history, rendering the overwhelming majority of the population unable to pay for basic goods.

The World Bank warned that Lebanon was enduring an economic depression that might rank among the top 10 worst economic crises in the world since the mid-nineteenth century, in the absence of any solution on the horizon that would get it out of a reluctance reality exacerbated by political paralysis.

The small Mediterranean country defaulted on its debt in 2020; the Lebanese currency has lost around 90% of its value on the black market, and the UN now considers four in five Lebanese to be living under the poverty line. 

Capital control laws were never formalized by Beirut, but the country's judicial system has been too lenient on banks, not ruling on depositors' attempts to access savings via litigation against banks. This has led depositors to try accessing their savings in various ways.

Just two days ago, Lebanese woman Sali Hafiz was able to retrieve around $13,000 of her blocked deposits after briefly holding up a branch of BLOM bank in Beirut.

Hafiz stated that she needed her savings withdrawn in order to treat her cancer-stricken sister.

Read next: Health care crisis in Lebanon

On a similar event on the same day, Lebanese man Rami Charafeddine barged into MED bank in Aley and retrieved nearly $30,000 of his deposit before turning himself into the security forces that escorted him to the local police station.

As public frustration with bank policies increases, more citizens are hailing such actions as heroic and rightful on social media, which was clearly seen in the case of Bassam Al-Sheikh Hussein, a Lebanese man that took a bank hostage in order to retrieve a small part of his savings to pay for his father's surgery.