Lebanon Businessnews News

Banks require cash deposits
for withdrawals above ceiling
Association of Banks: Move necessitated by BDL’s reduction of cash supply
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Employers are being required by their banks to deposit liras in cash if they want to exceed the ceiling on their withdrawals for payroll purposes. The Central Bank (BDL) has reduced the ceilings on the banks’ cash withdrawals from BDL, said the Association of Banks (ABL) in a statement. Each bank is allowed to withdraw cash according to a quota set up by BDL.

“The banks cannot provide cash in lira that exceeds the amount supplied by BDL especially that clients are performing withdrawals without making any deposits to offset the continuous demand for cash,” ABL said.

ABL’s statement came following a dispute between the Syndicate of Hospitals and several banks. The syndicate had accused these banks of refusing to pay the salaries of hospital employees that are domiciled with them unless the hospitals provide the required amount in cash. It said that hospitals don’t have the required liquidity because most of their revenues are paid through transfers or by checks. The syndicate had also asked hospitals not to provide medical care to the employees of these banks unless they pay in cash provided this does not cause impairment to their health.

ABL said in its clarification that the banks’ decision to require cash deposits especially applies to entities that provide their services against cash payments.

A senior banking source said that BDL is providing cash in lira to the banks to pay the domiciled salaries of public sector employees only and that the banks have to use their own resources to pay the salaries of private sector employees. He said that the banks are suffering from a severe shortage in lira liquidity and some of them are offering money rewards to clients to encourage them to deposit large amounts in lira.

According to the source, BDL’s aim from reducing the money supply is to curb demand for dollars in an attempt to prevent a further deterioration of the exchange rate.
Date Posted: Sep 03, 2021
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