Al-Qard Al-Hassan: the hidden bank

The Al-Qard Al-Hassan affair is no longer a secret to anyone. The small charity created in 1982, in the middle of the war, then developed in a spectacular way. Until today becoming a real bank, but without a license. The association has been well registered with the Ministry of the Interior since 1987 like any non-governmental organization. But its activity goes far beyond the charitable sphere. It also goes beyond the traditional activities and dimensions of a microcredit organization, as its core business might suggest.

There is to be wrong

A quick glance at her profile shows she has truly become a bank in good standing. More precisely, an Islamic bank, as there are everywhere, of which three or four are still active in Lebanon. It has all the ingredients: big contributors, small depositors, savings plans, loans, cards, ATMs. And not such a small bank. According to multiple inquiries and investigations, the monster he has become has loans worth hundreds of millions of dollars, tons of gold and other cash reserves, customers for hundreds of thousands, 32 branches served by 500 employees across the country (in regions with a strong Shiite presence) …

Rated as such, it is the size of an upper-middle-range bank, right after the top 10 banks in Lebanon. But all this without being regulated or controlled by the Central Bank (BDL) or the Ministry of Finance. It operates without control, without taxes, without control over the source of funds or their use, or on profits, management, activity, without any guarantee of compliance with local laws, including in matters of microcredit organizations. .

But according to past polls and the practice normal Hezbollah, the money comes mainly from Iran, from a few rich people in the community, then from multiple smuggling, money laundering and drug operations. It has also been subject to sanctions by the US, Saudi Arabia and other countries for years as an organization linked to terrorism. This prevents it from becoming a “normal” alternative bank. Until now…

Because at the pace at which the country’s financial affairs are going, we risk heading towards another scheme. What is this train? And this diagram?

Beyond the judgment that one can have on banking practices, past and present (this is not the subject of this article), the financial trend of the last three years shows the following aspects: weakening of banks’ finances due to interest rates multiple exchange and various regulations; no formal capital controls; discrediting of the sector by politicians and associations; crisis of confidence; media campaigns in Lebanon and abroad; judicial harassment perpetrated by regime judges; complaints abroad… And then the state plans to annihilate what remains of the banking foundations.

The warning shooting plans

We started from the plan of Hassan Diab who wanted (at the express request of the Hezbollah ministers) to create five new banks to replace the current ones, destined for marginalization, if not destruction. Then Saadé Chami, known for his affiliation with the PSNS, planned in his version to weaken the sector as much as possible in order to be able to collect it at a lower cost.

A bank restructuring project is even being prepared without the Association of Banks (ABL) participating or knowing about it.

Meanwhile, Al-Qard Al-Hassan continues to grow, offering dollars in abundance and reaching new segments of the population. A population that, following the crisis, no longer has access to their savings or to any form of credit. Al-Qard therefore remains the only way out, and that’s it. Even if we don’t necessarily adhere to the conspiracy theory, the process underway since 2019 has cause for doubt.

The final solution

But what would the result be, according to this plan? Will we see the complete annihilation of the current banks? Obviously not. The idea is to weaken them as much as possible, but keep them as a facade just for the sake of it. The main financial activity would then take place through instruments such as Al-Qard Al-Hassan, and possibly other affiliated structures, which would not have the Shiite brand and would not be subject to sanctions. Economist Fouad Zmokhol also thinks that this practice of exchanging bank dollars for fresh dollars at 20% of their value ultimately risks changing the identity of bank shareholders for the benefit of the “hidden forces”. One way to check what’s left of current banks.

We will therefore find ourselves in a scenario of camouflaged protection. It is a bit like the Presidency of the Republic and the other state institutions: they are kept for decorative purposes, without eliminating them, but they are rendered inactive, replacing them with parallel and hidden decision-making centers.

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