Yemenis are unable to withdraw their deposits from banks

Ahmed went to one of the Yemeni banks in Sanaa to withdraw a sum of money from his balance so that he could help his wife, who was suffering from a severe health problem, but he was surprised that the bank refused to withdraw any sum, so he returned home empty-handed, and he was biting his fingers with regret because he had deposited his money in the bank that had become Effectively under the control of the Houthi group.

Ahmed (who preferred not to mention his full name) told Al-Arabi Al-Jadeed: I went to the Sheba Islamic Bank, where I deposited my money, and I wanted to withdraw part of the money from my balance, but I could not withdraw any amount under the pretext that the Central Bank was holding back billions of dollars for them. It is prohibited to release or disburse any amounts of deposits, especially deposits before 2018.”

Ahmed adds: “I could not withdraw any sum of money to take my sick wife to the hospital, and I had to sell a piece of land that I owned in order to be able to treat my wife, especially since I am not accustomed to borrowing or asking for help from anyone.”

Bank chaos

Ahmed continues with a sigh: “Unfortunately, we have become in an era of chaos under the control of the Houthis, who have taken control of the banks and the deposits of depositors in them. These are our rights, but they have become confiscated. Unfortunately, there is no party to do justice to us, especially since those who claim to be the de facto authority are responsible for stopping the withdrawal of our deposits.” Finance in banks.

Ahmed's situation is the same as that of Dr. Faten Abdo, a doctor at Sana'a University, who appeared in a video clip on social media complaining in pain about her inability to withdraw a sum of money from her bank balance in order to travel to Cairo to complete her treatment.

The Houthi group took control of the banks in Sanaa, and obligated them not to withdraw deposits from their depositors, which made depositors face a crisis related to the confiscation of their financial rights in banks, in light of their inability to withdraw any amount of money from their balances.

Illegal measures practiced by the Houthi group, but it believes that through this measure it maintains the exchange rate in the areas under its control, which is equal to 535 riyals to the dollar. It also fears the withdrawal of hard currency from the areas under its control, thus causing economic collapse and inflation.

Last May, depositors at the International Bank of Yemen organized a protest in front of the bank’s headquarters, but the group reinforced the banks with military protection, and prevented these protests, which came in light of a financial liquidity crisis suffered by the Houthi areas, especially in light of the group’s refusal to pay employees’ salaries since September 2016.

The volume of deposits held by citizens who are bank customers is about $4.5 billion, according to a report on financial developments issued by the Ministry of Finance loyal to the Houthis, and the figure does not include deposits of government institutions and companies. The Governor of the Central Bank in Aden, Ahmed Ghaleb Al-Maqbi, accused the Houthi group of destroying the banking and financial sector, printing a new coin, and freezing and confiscating citizens’ accounts because they opposed their repressive policies.

The Houthis rely in their policy on the presence of the main headquarters of banks in Sanaa, as many banks refused to respond to the call of the Central Bank in Aden to move their headquarters to Aden, which forced the governor of the Central Bank in Aden to cancel the licenses of six banks: Al-Tadamon, Yemen and Kuwait, and Yemen and Bahrain. Al-Shamil, Al-Amal Microfinance, Al-Karimi Islamic Microfinance, and Yemen International.

Depositors in these banks in the liberated areas called for the withdrawal of their deposits from them for fear of their confiscation as a result of the ongoing conflict in the economic file between the internationally recognized legitimate government and the Houthi government in Sanaa.

Repercussions of withdrawing deposits

Economic analyst Dhifallah Sultan told Al-Arabi Al-Jadeed that the Houthis prevented citizens from withdrawing their deposits from banks, because if citizens withdraw their deposits, this will lead to the collapse of the economy in the Houthi areas and the rise in foreign currency prices, due to the increase in currency circulation in the hands of the Houthis. Citizens are away from using the banking sector, which leads to the complete collapse of the banking sector, which does not have sufficient liquidity to actually deliver all customer deposits, due to the nature of its work in loans, i.e. a lack of liquidity in the banking system, an increase in interest rates, and a decrease in confidence in the banking system.”

The economic analyst pointed out that, “If financial liquidity in banks decreases, it will become difficult for governments to obtain the financing necessary to implement their development projects and programs. That is, in the event of a collapse of the banking sector, this will negatively affect the interests of the Central Bank in Sana’a, which depend on the nature of the work of financial institutions.” And banks from loans, loan interests, etc.

The economic analyst added that withdrawing deposits leads to the Houthis being unable to control inflation, by reducing the money in circulation, that is, the more money is in circulation and the less banking awareness among people, and the greater their distrust and fear of banks, the higher the exchange rate of local currencies against hard currencies.” .

The economic analyst spoke of another reason for the Houthis preventing customers from withdrawing their deposits from banks, which is their fear of the escape and transfer of major merchants from areas under their control to areas under legitimate control, and the transfer of hard currency, and thus the collapse of the banking sector.

The New Arab