Reuters is reporting that ten more banks in Lebanon have been held up by their own depositors trying to access their own savings. In 2019, Lebanon was forced to impose strict currency rules to prevent a total collapse of the banking system. The government limited withdrawals to about $200 a month.
But with 75% of the country living in poverty, people are resorting to drastic measures to withdraw their own money.
In early August, a man threatened hostages unless he could access some of the $200,000 in savings that were in his bank. He needed the cash to pay the medical bills for his sick father. Then, earlier this week, three more depositors held up their banks to get their own money.
Now, the practice is spreading and has led to another crisis.
At least 10 banks robbed just today in Lebanon by savers who are claiming their money frozen by the government due to the economic crisis. The people gather at the banks to support the robbers. Coming soon to Europe. pic.twitter.com/IbHoNczGDm
— RadioGenova (@RadioGenova) September 16, 2022
Seven banks have been held up since Wednesday in Lebanon, where commercial banks have locked most depositors out of their savings since an economic crisis took hold three years ago, leaving much of the population unable to pay for basics.
On Friday morning, an armed man identified as Abed Soubra entered BLOM Bank in the capital’s Tariq Jdideh neighbourhood demanding his deposit, the bank told Reuters.
He later handed his gun to security forces but remained locked in the bank past sunset, negotiating with bank officials to withdraw his $300,000 in savings in cash, he told Reuters.
That’s been the pattern of these “robberies.” The bank robbers only want what is supposed to be on deposit in their names at the banks.
Ordinary Lebanese have been cheering the bank robbers on. It happened earlier in August when the hostage taker demanded his savings. And it happened again yesterday.
Throughout the day, he had been cheered on by a large crowd of people gathered outside, including Bassam al-Sheikh Hussein, who carried out a hold-up in August to get his own deposits from his bank, which dropped charges against him.
“We’re going to keep seeing this happen as long as people have money inside. What do you want them to do? They don’t have another solution,” said Hussein.
The Depositors’ Union, an advocacy group established to help clients get access to their funds, described Friday’s hold-up spree as “the depositors’ uprising” and a “natural and justified reaction” to banks’ restrictions.
Finally, the government and the banks appeared to have had enough. They declared a three-day bank holiday and promised better security. The banking trade group urged the government to pass laws to deal with the crisis.
But there literally is no government. There was an election last May, and former prime minister Najib Mikati agreed to form a government. But the usual sectarian rivalries and corrupt interests have failed to agree on a cabinet.
Meanwhile, the withdrawal limits will continue because without them, the crisis would get even worse as the capital flight would force a currency collapse. Civic order would almost certainly break down and the sectarian violence — never far away from the surface — would erupt once again.
Lebanon is close to that now. And as long as the elites refuse to unite to solve the nation’s problems, the country will be a hair’s breadth away from disaster.