Lebanon’s banks to continue with closures over ‘arbitrary’ judicial decisions

Lebanon’s banks to continue with closures over ‘arbitrary’ judicial decisions

Banks in Lebanon will continue with their open-ended strike, as banking chiefs hit out at “arbitrary” and haphazard judicial decisions against the sector.

Initially, the Association of Banks in Lebanon had issued a short statement refuting reports that operations would soon resume, saying that the strike would continue “until further notice”.

Later, the organisation released a longer statement that hit out at a string of recent judicial orders against banks.

Senior prosecutor Ghada Aoun on Monday charged two senior bankers from Bank Audi and Audi Group with money laundering for failing to lift banking secrecy on the accounts of senior figures at the firm.

The move was described as “vengeful” by the ABL, which argued that Bank Audi was co-operating with investigators, despite assertions by prosecutors to the contrary.

Late in 2022, the Lebanese parliament approved an amended banking secrecy law, a key demand of a $3 billion bailout out from the International Monetary Fund.

The ABL argued that prosecutors could not retroactively view accounts dated before the law was passed. Ms Aoun wanted to view accounts from 2016 and believed she had the power to do so.

Lebanon’s economic collapse, which first became apparent in 2019, has been described by the World Bank as one of the worst in modern history. The local currency has plummeted in value by about 98 per cent against the US dollar on the parallel market and continues to tumble to new lows.

The financial meltdown has been blamed on decades of mismanagement by Lebanon’s ruling classes, including the leaders of its banking system and the central bank.

The indefinite strike was announced last week following a general meeting of the ABL, although ATMs have remained open.

It had met last Monday to discuss “recent decisions” and judicial measures and “their impacts on banking workflow and the rights of depositors”.

The ABL had also called for Lebanon to pass a capital control law, formalising the informal cash withdrawal restrictions that have been in place since the economic crisis began.

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