Flaunting a government order, Lebanon's banks say they are closing until the end of the month.
Beirut, Lebanon - Lebanon's finance minister urged prosecutors to take action against the country's banks after they defied a government order to maintain "necessary functions" by announcing that they would close until March 29, citing coronavirus.
Finance Minister Ghazi Wazni called on prosecutors to "act quickly in light of the Association of Banks [in Lebanon's] hasty decision to close without paying attention to people's interests, even to a minimum standard."
Lebanon's cabinet announced a state of medical emergency on Sunday, closing all non-essential businesses and ordering a "general mobilization," to support the effort to fight the coronavirus outbreak, which has infected 109 people in Lebanon, killing three.
But banks, along with supermarkets and pharmacies, were ordered to continue providing basic services to the Lebanese people...
Confidence in the country's financial sector sank even further after banks closed their doors for two weeks during an unprecedented anti-establishment uprising in October. When they reopened in November, many institutions embarked on a series of what have been increasingly harsh informal capital controls restricting US dollar withdrawals and transfers abroad.
Informal capital controls, implemented at the discretion of banks without legislation, are legally suspect. But banks argue such restrictions are necessary to prevent a total collapse of the sector as it is left to fend for itself while politicians avoid implementing politically toxic but necessary formal capital controls.
Prime Minister Hassan Diab recently said the government would move to formalise "the relationship between banks and depositors".
With anger rising over the ever-changing discretionary measures, Financial Prosecutor Ali Ibrahim froze the assets of 20 Lebanese banks and their chairmen and boards of directors in early March as part of an investigation into informal capital controls.
But that decision was quickly overruled by Judge Ghassan Oueidat after banks said the measures would force them to close.