What should be done about Houthi arbitrary practices against the banking sector in Yemen

Commercial and Islamic banks and microfinance banks in Yemen, especially those whose main departments are located in the occupied capital, Sana'a, and their branches in the liberated governorates, suffer from arbitrary practices practiced by the Houthi militias. These practices include the use of pressure, coercion, and blackmail to force banks to close their branches and freeze their operations, as happened recently, which constitutes a clear violation of all banking laws and customs.

In addition, the Houthi militias impose illegal fees and taxes on banks, and detain managers and employees as a means of pressuring them. These arbitrary measures did not only affect banks and their institutions, but also extended to include all Yemeni citizens who depend on these institutions to manage their money and obtain the necessary financing for their daily needs and commercial projects. These violations also exacerbate the humanitarian crisis in Yemen, as they weaken the ability to provide basic services to citizens, such as food, medicine, and education.

The role of the international community

These actions show the extent of the Houthi militia’s penetration into this vital, important sector, its insistence on tampering with it on the one hand, and the inability of the managements of these banks to resist Houthi pressures on the other hand. The failure of banks to resist these pressures requires their assistance and the preparation of a comprehensive strategy to liberate them from the grip of the Houthis, in cooperation with the international community, as they are unable to perform their banking duties in accordance with the local and international laws that regulate banking work, which threatens the safety of the banking sector and the rights and funds of citizens.

The Houthi practices are not just violations of banking laws and customs, but are also an expression of empty displays and false heroism aimed at achieving political gains at the expense of the stability of the country's financial system. These violations not only harmed the banks, but also directly harmed the Yemeni citizen, depriving him of his savings and investments, complicating his livelihood, and almost cutting off his communication with the world due to these terrorist practices and blatant violations of laws and morals.

It is necessary for the international community to take effective steps to protect and support the Yemeni banking system, including providing technical and financial assistance to banks to help them withstand these pressures, and supporting and strengthening the oversight of the Central Bank in Aden to ensure compliance with banking laws and protect the rights of citizens. Local capacity building efforts must also be supported to strengthen resistance to these practices, and work to find long-term solutions to achieve stability and sustainability of the banking sector in Yemen.

The role of the offended banks

In this context, bank management’s commitment to banking controls and not yielding to militia pressure is considered a crucial step to avoid being subject to punitive measures that may be imposed by relevant authorities. Banking work in accordance with international and local laws and norms is the only way to preserve the integrity of the banking sector and the rights of depositors.

Bank departments must adopt a strict and coherent approach in confronting Houthi pressures, and cooperate with relevant international and local bodies to ensure the application of the highest standards of governance and transparency. This commitment includes not submitting to blackmail and threats, and working to document any violations that may occur by militias and reporting them to the competent authorities.

Transparency and disclosure of information is an important step in building trust with clients and investors. Banks must be clear in their dealings and submit periodic reports on their financial condition and activities and on the violations they are exposed to by the terrorist group, which helps reassure customers and protect their money.

The role of government authorities

The Yemeni government authorities in the liberated areas must also take strict legal measures against any attempts at illegal interference in the banking system, and strengthen security to protect financial institutions from any potential threats. In addition, these authorities must cooperate with banks to ensure a safe and stable business environment that enables them to provide their services effectively.

In conclusion, strengthening good governance in the banking sector, and enhancing international cooperation to confront abusive practices, is considered crucial to ensuring the stability of the financial system in Yemen and protecting the rights of depositors and investors.

Joining local and international efforts to achieve these goals will contribute to protecting the Yemeni economy from collapse, and enhance the ability of banks to provide the necessary financial services to citizens and investors. This trend will ultimately lead to enhancing financial and economic stability in Yemen, improving the living conditions of the population, and paving the way towards achieving sustainable and comprehensive development in the country.

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* Economic researcher and analyst