Lebanon’s Fransabank shuts all branches after judicial order

Folks stand in entrance of a department of Fransabank in Beirut, Lebanon March 16, 2022. REUTERS/Mohamed Azakir

BEIRUT, March 16 (Reuters) – Lebanon’s Fransabank closed all of its branches on Wednesday after a judicial order and stated it will be unable to satisfy shopper calls for, together with paying public sector salaries.

Fransabank, certainly one of Lebanon’s largest lenders, stated in a press release that the judicial order had frozen all its “shares, properties and belongings”.

The order required Fransabank to reopen the account of Egyptian depositor Ayad Ibrahim and pay out his deposit in money, or else its belongings could be seized, his lawyer Rami Ollaik stated.

Fransabank stated it was implementing the order, with safes at its branches sealed with crimson wax. It stated Ibrahim had closed his account and “recovered all of his deposit”.

The financial institution didn’t instantly reply to emailed questions from Reuters searching for touch upon Ibrahim’s declare, and whether or not the it will attraction in opposition to the judicial ruling.

Greater than $100 billion stays caught in a banking system paralysed since 2019, when the Lebanese economic system collapsed because of a long time of unsustainable state spending, corruption and waste.

Banks have known as on the federal government to move a capital management regulation, however within the absence of formal controls, they’ve largely blocked greenback withdrawals and transfers overseas, sparking quite a few authorized challenges, with combined outcomes.

The choose who issued the order couldn’t be reached for remark by Reuters on Wednesday.

A Fransabank supply stated Ibrahim was not a shopper as a result of the financial institution had issued him a cheque for the worth of his deposit, and he had signed for the cheque at a notary.

A spokesperson for United For Lebanon, an anti-corruption group representing Ibrahim, stated he had “signed for the cheque however with reservation”.

Lebanon’s banking affiliation criticised what it described as “arbitrary and unlawful measures” being taken in opposition to lenders, saying these threatened to “topple the banking sector”.

Ibrahim informed Reuters he had deposited the cash some 4 months earlier than the disaster started, including that Fransabank had refused his request to switch funds for his sick brother.

His lawyer stated the deposit was lower than $100,000.

Banks have already closed many greenback accounts by issuing cheques which can’t be cashed and as a substitute change fingers out there at a fraction of their face worth.

One other choose just lately froze the belongings of 5 different Lebanese banks and members of their boards whereas she investigates transactions they undertook with the central financial institution, a judicial doc confirmed. learn extra

That choose has not charged any of the events talked about.

And final month a London courtroom ordered Lebanon’s Financial institution Audi and its peer SGBL to switch $4 million to a British shopper whose cash was caught within the banks. learn extra

An affiliation representing depositors stated Financial institution Audi subsequently closed greater than 30 accounts belonging to British nationals or shut family, issuing cheques for the stability.

Reporting by Timour Azhari, Laila Bassam and Tom Perry; Enhancing by Toby Chopra, Jonathan Oatis and Alexander Smith

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