Financial crisis

Daylight robbery: Life as a Lebanese depositor

Buried for year under an avalanche of banking restrictions, Lebanese depositors are in a race against the clock to access their trapped savings. From credit cards being canceled unexpectedly to banks refusing to settle or open accounts, and transfers abroad and online payments being blocked, the restrictions placed on Lebanese depositors have reached an absurd level. Here is a guided tour through the jungle that is the Lebanese banking sector.

Daylight robbery: Life as a Lebanese depositor

A mural in Tripoli reads, "We're worn out." (Ibrahim Chalhoub/AFP)

BEIRUT — As if being chased, Ramy rushes out of the bank with a wad of cash in his pocket. The security guard didn’t bat an eye. For months, he has been watching the young thirtysomething engineer show up early in the morning at the bank to beg for the savings trapped in his account.

On his journey, Ramy makes three stops: in a parking lot, behind a shop and on the side of the highway. At each stop he meets up with a different black market foreign exchange trader. In a country strapped for foreign currency with its local currency plunging in value, it takes three exchanges to get all the dollars he needs.

Keeping one eye on the daily exchange rate, face masks on and hand sanitizer in tow, Ramy and each trader, like a dealer and their client, count the wads of cash — one stack by necessity much thicker than the other. In the time of coronavirus, money has never been cleaner.

As she sips her coffee in her Beirut apartment, Suzanne receives a text from her bank, the second in five days. Seeing the bank’s name pop up on her screen she is gripped by anxiety. Since the start of the restrictions a year ago, a message from the bank has never boded well.

“Dear client, due to the current circumstances, your debit card is now configured for local use only. To benefit from online and international spending limits, please order a prepaid card in dollars or euros.” A prepaid card with fresh money, of course.

She turns to her husband, “We’re going to have to use your credit card for Netflix and your online video games.”

His phone chimes before he has the chance to respond.

“Dear client, as of today your international limit for any online transaction is set at $15 per month.” With an $11.90 Netflix subscription, Michel realizes that he will have to do without his video games.

A few kilometers away, Dina is sharpening her pencil, ready to fill in the last pages of her son’s old homework book, which she has turned into an account book.

Meticulously, the mother draws three columns. One for “Lebanese lira,” one for “Lebanese dollars” and the last for “fresh dollars.”

She recalls simpler days, when she used the two currencies interchangeably, juggling dollars and lira for over two decades at an easily manageable rate of LL1,500 to the dollar.

Today, like most Lebanese, Dina is struggling with a slew of different rates. There’s the official rate of about LL1,500 to the dollar, now largely virtual. And the LL3,900 rate, set according to Banque du Liban’s exchange rate platform, at which she can withdraw in cash lira some of her “lollars” — Lebanese dollars that she has been saving for years that now only exist as numbers on a screen — with a $2,000 a month max withdrawal limit. Then there’s the black market rate, which, a website born of the crisis tells her at the beginning of October is dangerously close to LL9,000 to the dollar.

Dina’s eldest son, who works in Dubai, is expected in Beirut next week. He has promised to bring in fresh money. She will make sure to hide it in the back of her guest room closet, “just in case.”

Lebanon has been grappling for over a year with a severe economic and financial crisis that has no end in sight, as the Lebanese authorities continue to fail to implement reforms that have been identified for years and that are vital to unblocking urgent international aid.

Amid this crisis, Lebanese have been and continue to be at the mercy of their banks, which are unilaterally, and without any prior warning, putting up more hurdles to prevent depositors from having access to their savings.

Everyone’s an outlaw

“I spend my time begging for my own money, that of my parents and my employees,” Ramy says, laughing nervously.

Since the deadly blast at Beirut’s port on Aug. 4, which he narrowly escaped, Ramy has been making every effort to get his hands on cash dollars, fresh dollars.

As he watched what was happening from his apartment overlooking the port, the blast wave of the second explosion propelled him across the room. The bay window shattered and the doors got ripped off their hinges.

“It’s going to cost over $25,000 to have everything fixed. Materials can only be purchased in fresh dollars. I have this amount in my account, but no access to it,” he explains.

“Now, I have to run from one bank to another preparing excessive paperwork, in the hope that, as a victim of the Aug. 4 tragedy, I can extract a small chunk of my own money.”

Having been played for months by the banking system, the Lebanese have no other option left but to maintain their composure, well aware that the situation “will only get worse,” as Ramy says.

Exchanging Lebanese lira on the black market has become the only resort for so many depositors, while access to those exchangers who offer LL3,900 to the dollar is strictly regulated and limited to only a few transactions.

Lebanese depositors have no other choice but do what they must, given the banks and their restrictions, which, having not been endorsed by Parliament or the central bank, are informal and illegal capital controls.

For almost a year, the Lebanese have been coming up with imaginative ways to circumvent these restrictions and access their money. In part because, no matter what they do, these depositors know they must accept that a good part of their savings is simply gone.


“You have 48 hours to bring the money. Beyond that, the offer is off the table.”

Peter still can’t wrap his head around this message, written in plain language and reminiscent of a mafia film script, in an email exchange with the management of his bank.

Seeing the situation in the country deteriorate, Peter had wanted to pay off the loan he had taken out to buy a car. The bank offered him a deal: It would write off his debt if he paid half the balance in fresh dollars. Peter insisted on settling the entire amount in lira, at the official rate. That’s when the bank made him this new offer: Take it or leave it.

Peter, an independent architect, was racing against time to get the cash and pay off his loan. In the process, he closed all of his accounts with the bank.

His brother, however, was not that “lucky.” His request to pay off his loan was immediately vetoed by his bank.

“The exchange rate of LL1,515 to the dollar applied in the banking sector is no longer worth anything. Banks have been preventing early payments, waiting for the central bank to approve higher exchange rates. This means that we will have to pay double, or even more,” Peter says furiously. He only has one thing on his mind now: leaving Lebanon.

The law of the jungle

Zak had planned to travel this year despite the pandemic. His bank, however, decided otherwise.

“When the lockdown was lifted around the world, I absolutely wanted to go on a trip. Not to leave for good, just to take a break,” he says.

“I received a message from my bank informing me that they had changed, without prior warning or my approval, my foreign currency card into a Lebanese lira card. The irony was that they made me pay for this unexpected modification.”

Infuriated, he rushed to the bank to cancel all his cards. “They didn’t care at all. They let me settle my accounts and didn’t even try to convince me otherwise,” he recounts.

Lebanon is a country limited by land and sea borders, but purchasing a plane ticket without fresh money has become a challenge, and going abroad without a foreign currency credit card is unimaginable.

Zak, the manager of a supermarket chain, has already dedicated a good deal of his time trying to get his hands on dollars to be able to pay his suppliers. He finally decided against the idea of traveling. He no longer has the strength to run around chasing after fresh dollars in order to afford some rest abroad.

Since Nina returned home, she has not had much rest. Last winter, she went to Florida to help her son settle there. A few days before her scheduled return trip in early March, the whole world shut down, courtesy of the coronavirus. At the same time, her Lebanese credit cards were blocked abroad, thanks to Lebanon’s economic crisis, and her husband, who was in Lebanon, couldn’t send her any money as transfers abroad were blocked.

What was supposed to be a nice trip to the Atlantic coast ended up being an arduous journey that lasted for six months.

“I am like Cosette [the orphan child from Les Misérables] in Miami!” she exclaims, bursting into a tragicomic laugh. Nina had to cut and stitch up the long sleeves of her winter clothes to adjust to the warmer weather. At over 60, she started learning Spanish to navigate Miami’s Cuban markets, where she went in search of the cheapest goods she could afford while living off her son’s meager salary.

Fast forward to Aug. 4 at 6:08 p.m. Beirut time, Nina is sipping her morning coffee when her phone rings. She has been impatiently waiting for the borders to reopen and for her two sons, both overseas, to save enough money to buy her a return ticket. Instead, she learns that her house in the Beirut port area was devastated. Luckily, her husband was in the mountains at time of the explosion. He is safe and sound.

When she finally arrives in Lebanon, she has no time to rest. Instead, she runs after the NGO workers roaming the streets of the stricken neighborhoods to get them to help with the repairs to her house. She calls the banks one after the other to get approval to withdraw her money. When she tells her story, she manages to exhaust all the synonyms of the word “tired.”

In a country where reality has surpassed fiction, the banks have become armed robbers holding a nation’s savings hostage, while their depositors run around in desperation. Stories like those told above number in the thousands, and the lives of Lebanese, already chaotic and even apocalyptic, have become absurd.

For over a year now, the daily lives of Ramy, Zak, Dina, Nina, Peter, Suzanne and Michel, like so many others, have been reduced to chasing after their own money, while trying to prepare for and dodge the next blow from their opponent.

“In fact, the banks did not steal our money for the sake of stealing,” Ramy muses.

“Today, they are managing their budget, by sanctioning us obviously. They are playing for time and trying to survive. At the end of the day, it will be either them or us.”

In short, it is the law of the jungle.

This article was originally published in French in L'Orient-Le Jour.

BEIRUT — As if being chased, Ramy rushes out of the bank with a wad of cash in his pocket. The security guard didn’t bat an eye. For months, he has been watching the young thirtysomething engineer show up early in the morning at the bank to beg for the savings trapped in his account.

On his journey, Ramy makes three stops: in a parking lot, behind a shop and on the side of the...