Cash trap

By WJG

September 19, 2022

Banks usually limit cash withdrawals of depositors. But while the limit is considerable in some countries, depositors in Lebanon can only withdraw up to $200 per month, or $4,800 a year since 2020.

The policy aims to prevent a bank run as well as the depletion of foreign currency needed for vital imports, as the Middle East country reels from a severe financial crisis similar to that of bankrupt Sri Lanka.

While the conversion rate is 1,500 Lebanese pounds per United States dollar, banks in Lebanon use the unofficial black market rate of 35,600 pounds per dollar, SBS News reported.

The low exchange rate makes the cash withdrawal limit more untenable for depositors as the devalued Lebanon dollar could not buy enough of their needs and settle debts. The injustice has prompted many Lebanese depositors to stage protests outside banks to demand the release of their money. Some resorted to an extreme method of withdrawing money due to medical emergencies.

When BLOM Bank in Beirut refused to give interior designer Sali Hafiz, 28, the $20,000 deposit of her family to pay for the cancer treatment of her sister, Zeina, she and her friends forced it to release $13,000 to her last Wednesday.

Pictures and footage of her standing on a desk inside the bank carrying a gun and yelling at employees to release a sum of money went viral on social media, according to Agence France-Presse.

Hafiz told local media she had used her nephew’s toy pistol for the hold-up that she streamed live on social media. They sealed the entrance and poured gasoline inside it before escaping through a smashed window in the back of the bank, according to AFP.

On Friday, a man who tried the same tactic got $19,200 from his deposits from a bank in Ghazieh city. Merchant Abed Soubra and six other depositors also separately held up a BLOM branch and six other banks in Beirut and the town of Aley using toy pistols and a pellet gun.

The hold-ups prompted banks in the country to announce a three-day closure starting Monday to prevent similar raids.


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