Lebanese People Cannot Withdraw Dollars Currency From Bank

Dollars and Lebanese pounds have been used unchangeably in Lebanon since a long time, and many people saved up a lot of money in the dollar bank account. After closing for more than two weeks, Lebanese banks re-opened their doors to massive chaos and depositors’ anxiety in regards to their savings. A couple of months ago, Banks had forced to stop foreign currency accounts conversion, withdrawals and distribution to customers, citing there were shortages in the Benjamins.

To give a clear and simple explanation about the issue, let’s suppose that you own an account with 2000$. Your bank does not keep it there as is, but it invests it to make money. As required from the law, It is necessary to keep the 10 percent in Central Bank as liquid reserve so, basically, $200 is the fastest amount it might be able to give you when asked. What about the rest? Your bank has invested $1000 in BDL certificates with little interest rates, gave $400 as loans to companies, $200 as loans to the government, and $200 as other assets. This breakdown follows the proven balance sheets of commercial banks as of September 2019.

So, if you want to withdraw your $2000 right now, the bank does not have them. Usually, when they don’t have all the people coming in to ask for their money at the same time, they use cash from other customers to pay the demanding ones, without touching their investments at BDL or in other places because they want to make profits. What does the bank do if many customers, like now, come asking for their money at the same time? It asks for a cash loan from other banks, which also do not have money, or from the Central Bank itself. And since BDL has dropped compared to the dollars, it has to cater for multiple demands, which cannot provide banks with the needed liquidity on time.

While it is legal for a bank not to immediately give back all the blocked savings deposits, it is illegal for them not to give back the dollars stored in the current account. But they simply do not have enough cash to give. The money is not there. This is their fault, the government’s fault and the BDL fault. The Government’s corrupt actions and constant need for new money to finance and invest in wasteful expenditures, brought the country to a critical situation. In parallel, Central Bank and the Association of Banks should take advantage and save whatever is left of their reputation by clarifying and making regulations fairer and uniform across all banks in Lebanon. People deserve responsibility, clarity and transparency in these difficult times where corruption and misgovernment seem to rule.

x  Powerful Protection for WordPress, from Shield Security
This Site Is Protected By
Shield Security