With no capital control law in sight, banking sector funds will deplete

Banking sources believed that, given the current state of the country's politics and the absence of a president, it might be difficult or even impossible to pass the Capital Control Law.

According to these sources, in the absence of this law, the banking industry's remaining funds may leak through lawsuits filed abroad and court orders compelling banks to transfer money to depositors' accounts abroad.

As a result, liquidity will dry up, and small Lebanese depositors will not be able to receive their rights.

These sources provided information saying that Banque du Liban (BDL) started looking into ways to stop the depletion of funds while waiting for the country to regain political stability and pass a Capital Control Law.

A circular that safeguards depositors and prevents money from being leaked abroad via lawsuits might be issued.

According to banking sources, the expected measure by BDL requires parliamentary support and the prime minister's approval to be effective.

According to these sources, the central banks, which have authorities comparable to that granted to BDL by the Monetary and Credit Law, are in charge of making decisions regarding transfers that safeguard the nation's financial and monetary situation.

According to banking sources, this is, for instance, what recently occurred in Egypt.

The central issue in this scenario is how foreign courts will deal with BDL's circular since a circular is not a law, and courts only deal with laws.