By Timour Azhari and Tom Perry — BEIRUT, (Reuters) – Lebanon’s Bank Audi has closed more than 30 accounts belonging to UK nationals or their close relatives since a London court ordered it to transfer funds stuck in the crisis-hit banking sector to a British client, a depositors’ union said. The Feb. 28 order requiring Bank Audi and its peer SGBL to transfer $4 million is the first UK ruling obliging Lebanese banks to transfer dollars out of the paralysed financial system, potentially encouraging similar claims. read more A Bank Audi official told Reuters the bank was “asking that the UK residents apply the terms applicable to anyone opening a new account: no international transfers, no cash withdrawals”. “If this is not accepted, then the bank has no choice but to close the account”.
More than $100 billion remains stuck in a banking system paralysed since 2019, when the economy collapsed due to decades of unsustainable state spending, corruption and waste. In the absence of formal capital controls, banks have largely blocked dollar withdrawals and transfers abroad, sparking numerous legal challenges, with mixed results. Since the UK order, Bank Audi, one of Lebanon’s biggest, has told dozens of clients their accounts had been closed and a cheque issued for the balance at a notary public, lawyer Dina Abou Zour of the Depositors Union told Reuters. They were told the accounts could be reopened if they signed a form waiving the right to make international transfers or to withdraw dollars in Lebanon, and accept that a cheque was due payment of the balance. Abou Zour said the total amounts involved were in the tens of millions of dollars. Banks have already closed many dollar accounts by issuing cheques which cannot be cashed and instead change hands in the market, currently at about a quarter of their face value.