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Lebanon's Fransabank closes all branches after judicial order - Reuters

16-03-2022 | 11:04

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Lebanon's Fransabank closes all branches after judicial order - Reuters

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Lebanon's Fransabank on Wednesday closed all of its branches in following a judicial order freezing its assets, a Fransabank source told Reuters, in a legal dispute with a man who is seeking to unlock funds stuck in the Lebanese banking system.

Lebanese banks have frozen most savers out of their hard currency deposits since a financial meltdown in 2019, but the controls were never formalized in law and have been challenged in courts.

The judicial order required Fransabank to reopen the account of Egyptian depositor Ayad Ibrahim and pay out his deposit in cash, or else the bank's assets would be seized, his lawyer Rami Ollaik said.

The judge who issued the order and Ibrahim could not be reached for comment.

Fransabank had issued Ibrahim a cheque for the value of his deposit and he was therefore no longer a client, the Fransabank source said, adding that he had signed for the cheque at a notary.

A spokesperson for United For Lebanon, an anti-corruption group that is representing Ibrahim in the case, said he had "signed for the cheque but with reservation".

The Fransabank source said that following the order the bank would not be able to make any payments, including of salaries, because its assets have been frozen. The bank has roughly 50 branches, the source said.

"We closed because the order is on all the belongings of the bank, including the safes, at the tellers, where you can get the cash. I can't get (cash), and I can't receive," the Fransabank source said.

Lebanon's banking association said that judiciary measures taken against the top local lenders would "topple the banking sector."

REUTERS

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