A state of anger among depositors as restrictions are tightened on their withdrawals (Hussein Beydoun)
Driven by fear for their life savings, more Account holders, banks, hoping to get their money back. Lawyers say depositors In response, more banks are closing accounts and issuing checks without consulting customers.
When a Lebanese bank informed Aref Yassin that it had closed accounts worth $20 million belonging to the professional syndicate he heads and instead issued a check for one-fifth of the accounts’ face value, the Syndicate of Engineers took the matter to court.
These funds, which were saved from the contributions of the engineers, were deposited inFransabank‘, dedicated to health care and union-covered pensions for regarding 100,000 people who are now at risk of losing a lifeline, in a country wracked by an economic collapse three years ago.
Yassin said, “These are funds that consisted of engineers’ subscriptions, affiliations, and relative fees, who have come from the work of engineers over many years. These are the rights of female engineers and engineers. Since business has declined in general, therefore, without exaggeration, recovering the savings and funds of the Engineers Syndicate from banks has become a matter of life and death for engineers in general. “.
Fransabank said that banking secrecy rules require that the bank not allow the disclosure of information regarding the customer.
The ruling elite in Lebanon has so far failed to develop a recovery plan to address the financial collapse that the country has been experiencing since late 2019, and the crisis is now exacerbating in the courts between depositors and banks.
The ruling politicians have yet to agree on a way to address the huge financial losses incurred by the financial system, when the economy collapsed under the weight of debts accumulated over decades of corruption, cronyism and mismanagement.
Nor have they passed a capital control law to tackle what the World Bank describes as one of the world’s worst financial meltdowns ever. Such a law would ensure fair treatment of depositors.
More than $100 billion is still held in Lebanese banks, and legal battles are mounting to gain access to whatever funds remain in the banking system.
In one of the most prominent cases, a London court ruled in favor of a saver seeking $4 million deposited with Bank Audi and Societe Generale Bank in Lebanon.
The banks, which are calling for a capital control law, say the London ruling results in double the residual liquidity of less fortunate depositors who are unable to do so.
Fouad Debs, co-founder of the Union of Depositors, which includes lawyers and activists, said that small depositors are the most affected.
The union has filed nearly 300 lawsuits on behalf of savers in Lebanon and abroad since 2019. The lawsuits include requests for money transfer and the reopening of closed accounts. But he said that only 12 cases were decided in favor of the depositors.
The government is increasingly concerned regarding pro-depositor rulings and other court orders to freeze the assets of some of Lebanon’s largest banks while a judge investigates their dealings with the central bank.
Prime Minister Najib Mikati said, “I just take advantage of this occasion and say that we are not happy with the reservations, who are going through the banks and the movements, who are the ones who are doing the lawsuits, they are the big depositors, and therefore if they put their hands on the money, there will be nothing left for the little ones.” .
Many depositors accuse the ruling elite in Lebanon of making more efforts to protect the wealthy and the banks, some of which are linked to senior politicians, as their shareholders, than they make efforts to protect small account holders.
“The elite are always transferring money abroad,” said Dana Trometer, a 48-year-old film director who lives in Britain, adding that “ordinary people” do not get the same treatment.
Although most savers do not have access to their money, the lack of a capital control law means there is no legal reason to stop remittances. An informed source said that some banks transferred money to politicians and their allies.
The Association of Banks in Lebanon did not immediately respond to a request for comment. Banks say they seek to treat all depositors fairly and limit most transfers to basic needs, such as education and health care.
Dana filed a lawsuit two years ago in Lebanon to gain access to her mother’s retirement savings, which were held in the bank, but to no avail. “It’s not fair,” she said, adding that her mother “mightn’t get even the slightest bit from the bank to help her every day…she only buys daily necessities.”
Lawyer Ali Zbeeb said the accelerated rate of bank account closures may have been caused by the ruling issued in London in favor of British businessman Vache Manoukian, who was advising him. “The banks may therefore aim to prevent a recurrence of the same situation by proactively closing accounts,” he added.
Debs said more than 50 British depositors have been in touch since the ruling, because their accounts were closed unilaterally, or because they feared they would be closed. He added that most of them have accounts in “Blom” and “Awda” banks.
The legal advisor to BLOM Bank (Lebanon and the Diaspora) said that the bank closed some of the accounts of Lebanese and foreigners during the crisis, and that the contract signed by customers gives the bank the right to close accounts unilaterally without prior notice.
He also saw that some of the closed accounts were for British citizens or residents, and that some accounts had been closed since the rule of London.
Bank Audi, which did not comment on this report, said following the London ruling, that it is asking UK residents to apply the conditions applicable to everyone who opens a new account, meaning that there will be no international transfers or cash withdrawals. The bank said it would close the account if this was not accepted.
Karim Daher, head of the depositors’ rights committee at the Beirut Bar Association, explained that he receives regular calls from depositors who are disturbed and find it difficult to access only part of their money, adding: “These people allocate money for retirement, to send their children to schools and universities… disastrous”.
(Archyde.com)
