BDL denies it wants to shut Al-Qard Al-Hasan, Hezbollah slams measures

The Central Bank has denied a media report that claimed it intends to shut down the branches of the Hezbollah-affiliated Al-Qard Al-Hasan Association across Lebanon.

In remarks to Al-Jadeed TV, Central Bank sources said the report is baseless and that the bank communicated with Al-Arabiya’s Al-Hadath television to inform it that its report is unfounded.

The report came after the Central Bank issued a circular on Monday barring banks and brokerages from dealing with Al-Qard Al-Hasan, described as Hezbollah’s financial arm.

The Central Bank prohibited all licensed financial institutions in Lebanon from dealing directly or indirectly with unlicensed entities and listed Hezbollah's Al-Qard Al-Hassan as an example. The bank had issued similar circulars in the past but this was the first time it mentioned Al-Qard Al-Hassan by name.

Hezbollah’s Loyalty to Resistance parliamentary bloc meanwhile said “the measures taken by the Central Bank and its governor against the Al-Qard Al-Hasan institution or against Lebanese firms, entities and individuals who are on the unjust lists of U.S. sanctions are a direct attack on the interests of our Lebanese society that violates the constitution and the laws.”

It accordingly warned that “using the Central Bank as a tool to implement foreign policies and dictations against the interests of Lebanese citizens” is a “dangerous blow to societal stability at a time the country needs to avoid turbulence.”

The bloc also stressed that Al-Qard Al-Hasan is “a non-profit charitable organization that serves Lebanese citizens regardless of their affiliations” and that “it will continue its work and perform its duties to the fullest extent possible.”

The U.S. Department of the Treasury imposed sanctions on Al-Qard Al-Hasan in 2007, saying Hezbollah used it as a cover to manage "financial activities and gain access to the international financial system."

Al-Qard Al-Hassan, founded in 1983, describes itself as a charitable organization that provides loans to people according to Islamic principles that forbid interest. Israel struck some of its branches during its war with Hezbollah last year.

Operating as a not-for-profit organization under a licence granted by the Lebanese government, it has more than 30 branches, mostly in predominantly Shiite Muslim areas of Beirut and its suburbs, southern Lebanon and the Bekaa Valley.

A Lebanese official said the Central Bank move had been in the works for months, and reflected U.S. pressure on Lebanon to take action against Hezbollah's financial wing.

Nassib Ghobril, chief economist at Byblos Bank, said Lebanese banks were already careful to avoid dealing with Al-Qard Al-Hasan because it is under U.S. sanctions.