Some bankers said Thursday they do not object to the idea of confining cash withdrawals from ATMs to Lebanese currency only, disputing claims that such a proposal would cause a panic in the market. “There was an idea to promote the Lebanese pound notes and that the ATMs will only disperse in Lebanese currency. This idea emerged following news that the Central Bank intends to launch new LL100,000 notes which are smaller in size than the current bill. But the Association of Banks in Lebanon issued a statement Wednesday that the ATMs will continue to disperse cash in both the Lebanese and dollar currencies,” one banker told The Daily Star on condition of anonymity.
Both Central Bank Governor Riad Salameh and the Association of Banks in Lebanon Wednesday denied any intention to confine withdrawals from ATMs to only the local currency.
Banking sources argued that the idea to confine cash withdrawals from ATMs to local currency was only dropped due to campaigns by some news media that totally distorted the true motives behind the proposed move.
Al-Akhbar newspaper claimed that this idea coincided with the visit of a senior U.S. Treasury official to Lebanon to review the sanctions against Hezbollah with Lebanese officials and bankers.
Bankers interviewed by The Daily Star said that in most countries in the world depositors can only withdraw cash in the currency of the country in which they are located.
“If you go to New York, Paris or London, the ATMs provide cash to the depositors from their national currencies only. Why Lebanon cannot do the same? This will not have any impact on the dollar deposits in the banks,” one banker said.
Bankers added that depositors can easily issue checks in dollars from their banks and said that this would not change even if ATM withdrawals were confined to Lebanese pounds only.
Bankers point out that 67 percent of bank deposits in Lebanon are in dollars and the rest in Lebanese pounds and said that this will also not change if ATMs distribute only the national currency.
“The stability of the Lebanese currency is assured. Why do you want to carry in your pocket two types of currencies if you want to go to the supermarket or a restaurant? Why not carry the currency of the country you are living in?” one banker said.
“If the customer or depositors wanted to withdraw a big amount in dollars then he can go to the cashier and he will receive the money in cash,” the banker added.
One leading Lebanese bank has four ATMs in its headquarters and each of these ATMs dispenses a different currency.
He added that the Lebanese economy is dollarized and this has prompted some people to ask why banks want to confine the withdrawals from ATMs to the national currency only.
“We thought of making these ATMs dispense Lebanese pound only once the Central Bank issues the new LL100,000 bill. But this idea was dropped due to the illogical noise by some quarters in Lebanon,” the banker said.
Another banker said only the Central Bank, Banque du Liban, has the authority to officially ask all commercial banks to make their ATMs distribute only Lebanese pounds.
“But BDL has no intention to make such a request and will leave to the commercial banks what types of currencies ATMs dispense,” the banker said.
He added that nearly 80 percent of the cash withdrawals from ATMs are in Lebanese pounds.
“Why not make this ratio 100 percent in Lebanese pounds instead of 80 percent?” the banker asked.