Know Your Rights: Lebanon’s Banks Cannot Limit Withdrawals

Banks in Lebanon are flat out breaking the law, or maybe they’re just basking in Lebanese people’s misery right before the Holidays.

By restricting the weekly amount a citizen can withdraw from their own bank accounts, account holders are given the right to pursue claims against these banks according to legal experts.

As reported by Gulf News in their interview with Lawyer Zeina Mouanness, “A big part of what banks have been doing is based on unauthorized and unilateral decisions. They cannot apply such precautionary measures without clear regulations.”

The Lebanese Central Bank currently sets a limit of $1,000 as weekly withdrawals of cash and another limit on online transfers. I personally have only been able to withdraw $500 after which I was told I had exceeded some kind of limit.

Most ATMs had stopped dispensing US dollars even prior to the Lebanese revolution, and banks have been applying random caps on weekly cash withdrawals, varying between $100 to $500 ever since. 

So where do Lebanese people stand amid all of this? Well, they can resort to one of the three following scenarios according to Ms. Mouanness:

  • “They could launch a bankruptcy lawsuit against the banks for failing to pay them the amounts requested.”
  • “They could file a [criminal case] against the bank.”
  • “They could lodge a lawsuit before a judge on an urgent basis, demanding the bank pay their money in cash. As per the first two procedures, a claimant could also request the court to impose a provisional seizure against the bank’s assets to ensure that the claimants’ money remains safe and untouched.”

According to another lawyer, Ms. Joceline Al-Rai, people also need to read the contracts with their banks – a matter not many people resort to at all sadly, often blindly signing all the banking agreements after waiting for hours to open the account in the first place.

Ms. Joceline Al-Rai explained: “Clients and depositors have the right to take legal action against their banks and reclaim their money … however, they need to review the clauses included in the contracts they signed upon opening their accounts. Unfortunately, the majority of clients sign those contracts blindly and without reading those clauses thoroughly.”

According to Article 670 of the Lebanese Penal Code, A suspect — be it a business or an individual — who withholds, disperses, embezzles or misappropriates a victim’s deposit, faces imprisonment of between two months to two years and a minimum fine of 50,000 Lebanese pounds”(Maybe we can all make those exchange rates we lost back?)

The reality of the fact is that the banking industry cannot limit cash withdrawals or deny clients from accessing their deposits without a law that dictates this.

And Members of Parliament have not legislated a law to allow banks to take these measures upon account holders.

This month, a judge reportedly ordered Bank Byblos to release a depositor’s funds in full, making it the first ruling of its kind since Lebanese banks started implementing informal capital controls.

Judge Ahmad Mezher ordered the release of 129,000 Euros that a company had deposited in a current account. The depositor initiated legal action against the bank that had refused her withdrawal rights. So good news is, it works!

In his ruling, the judge deemed the bank’s procedures as “illegal” and ordered the bank to pay a daily fine of around $13,500 in case of failing to release the deposit in one big shot. 

The reality of the fact is, this is good and not really good in application – because the people that need their money the most, are not the ones with the biggest bank accounts, and the ability to hire the most influential and “scary” lawyers by throwing money at the problem.

They are the average Lebanese people struggling to make ends meet, stay above water, and give their families the Christmas they deserve. Let’s make one last Christmas wish for Lebanon.

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