Al Baraka Group condemned Banque du Liban’s decision on Saturday to appoint a temporary director for the operating Al Baraka Islamic Bank in Lebanon, referring to “unjust decisions to punish banks” and accusing the Banque du Liban of “failing to provide a plan to restructure” the banking sector.
The Banque du Liban has appointed an interim director for the Al Baraka Islamic Bank, which it operates in Lebanon since the early 1990s, a Central Bank source confirmed to Agence France-Presse, in a move that comes in light of the difficulty the bank faces due to the impact of the economic crisis.
This is the first time that the Banque du Liban has taken such a step since the onset of the country’s economic collapse in 2019 and the decline of the banking sector, which years ago was considered a key pillar of the country’s economy.
Al Baraka Bank is one of the small banks owned by the headquartered Al Baraka group in Bahrain and led by Saudi businessman Abdullah Saleh Kamel.
Al Baraka Group stated in a note: “The Banque du Liban attributed its decision against Al Baraka Bank Lebanon to the bank’s failure to comply with specific circulars, including the absence of a restructuring plan for the bank, and calls on its shareholders to pump cash. “
The group considered that “Banque du Liban has failed to deliver a credible and comprehensive restructuring plan for the banking sector that takes into account the interests of all stakeholders, and that the Banque du Liban has refused to allow Al Baraka Bank Lebanon and other operating banks in Lebanon to access the assets it has deposited with the Central Bank, which would allow these banks to resume normal banking activities.
The statement quoted Al Baraka Group Chief Executive Hossam bin Haj Omar as saying: “We are deeply concerned and disappointed by the approach taken by the Central Bank in on the necessary restructuring of the banking sector in Lebanon and its unjust decisions in punishing banks, including Al Baraka Bank Lebanon, for what it claims are non-compliance.” for some circulars.
He believed that “placing Al Baraka Bank Lebanon under the management of the Banque du Liban not only provides a clear example of what awaits other banks, but also undermines the crumbling confidence of local and foreign investors during this critical period.”
The restructuring of the banking sector, which includes more than sixty banks, is one of the most important reform requests requested by the International Monetary Fund in exchange for the implementation of a three billion dollar aid plan for Lebanon in four years, on which a preliminary agreement has been reached in April.
Central Bank Governor Riad Salameh said in earlier that the banks are working to reorganize themselves in according to their capabilities, provided that the “bank able to lend” continues.
Over the past two years, several banks have resorted to downsizing, closing dozens of branches and laying off thousands of employees.
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