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Lebanese People Besiege Banks To Withdraw Their Money

Bank heists in Lebanon have become a growing trend with armed “robbers” storming into banks to withdraw their own money after the government announced restrictions on how much money they can withdraw from their own bank accounts amid an economic crisis.

The perpetrators have largely been allowed to remain free and have become folk heroes, Al Jazeera reports.

Lebanon has been reeling from a worsening economic meltdown since 2019, plunging 80 per cent of its population – about three million people – below the poverty line, according to the United Nations.

Poverty and unemployment have soared, and savings-account values have evaporated, along with the country’s middle class.

Since 2019, Lebanese banks gradually imposed draconian controls on deposits, effectively locking millions of customers out of their foreign currency savings. Said Al Jazeera’s Zeina Khodr:

Every time you want to withdraw money, it would be at a rate much lower than the market value. For example, if you want to withdraw $700, they give you $200. So that’s a de facto haircut.

A haircut in economic terms means a reduction applied to the value of an asset. In this case, it refers to the banks’ absurdly unfavourable exchange rate in the Lebanese pound when people try to withdraw cash.

Resultantly, the Lebanese people have been besieging banks to withdraw all their money. The incidents have become increasingly common as Lebanon’s economic crisis continues.

Known cases:

i). The first-known case was reported in January when a man held dozens of people hostage in eastern Lebanon after he was told he could not withdraw his foreign currency savings. He was eventually given some of his savings and surrendered to security forces.

ii). In August, an armed man also held employees and customers hostage at a Beirut bank after he was told he could not withdraw $200 000 from his account for his sick father’s treatment. The man was cheered on by a crowd outside the bank.

iii). On Wednesday last week, another armed man entered a branch of BankMed in Lebanon’s mountain city of Aley and attempted to retrieve his savings.

iv). On the same day, a woman called Sali Hafiz entered a BLOM Bank branch in Beirut with what she later said was a toy gun, along with other activists, in order to retrieve money from her own account to fund hospital treatment for her cancer-stricken sister. She poured gasoline inside the branch and threatened to set it on fire if she did not receive her savings. She managed to get $13 000 from her deposits, out of a total of $20 000.

The government estimates that losses in the sluggish financial sector since the onset of the currency crisis fall somewhere between $68bn and $69bn.

The World Bank has warned that the economic calamity could rank as one of the three most severe the world has seen since the mid-19th century.

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