Governor of the Lebanese central bank Riad Salameh issued a decision that will allow small depositors to withdraw money from their banks at the market’s USD to LBP exchange rate, so they can cash out their savings.
The decision applies to small depositors, whose credit accounts in a bank, “whatever their types and/or deadlines, contain no more than a total of 5,000,000 Lebanese pounds.”
If a small depositor, as per the above definition, “requests to carry out cash withdrawals or operations from those accounts,” the bank should:
Transfer the amount to be withdrawn to US dollars, according to the price determined by the Banque du Liban in its dealings with banks.
Transfer the amount in US dollars that results from the disbursement process, subject of Item (1) above, to Lebanese pounds, according to the market price at the date of the withdrawal request by the customer.
Pay the customer the amount resulting from the disbursement process, specified in Item (2) above.
Sell from the Banque du Liban the US dollars resulting from the operations referred to in Item (2), according to the market price.
The official decision also explained what a bank should do in the case of a customer whose accounts, “whatever their types and/or deadlines, contain no more than a total of $3,000, or their equivalent in any other foreign currency.”
When such a depositor requests to carry out cash withdrawals or operations from these accounts, the bank should:
Pay the withdrawals or fund operations in cash from these accounts or dues to the customer in a manner equal to their value in Lebanese pounds, according to the market price on the day of their implementation.
Sell from the Banque du Liban the foreign currencies resulting from the operations referred to in this section, according to the market price.
The decision specified three conditions for these operations to be valid.
The first, naturally, is the approval of the customer. The second is the “withdrawal of the total value of these accounts in one lot by the customer.”
As for the third condition, it dictates that the amount of 5,000,000 LBP, $3,000, or its equivalent in any foreign currency, “should be calculated after rebating the value of any debts owed by the customer to the bank.”
As per the decision, every bank must announce, daily, its adopted market price.
Moreover, the rest of the US dollar operations conducted by banks with their customers remain subject to the price that the central bank specifies in its dealings with the banks.
The central bank’s new decision became official on Friday, April 3rd, and will remain active for three months from that date.
It says that it aims to “preserve public interest in the exceptional circumstances that the country is currently going through.”