The Houthis force commercial banks to convert to Islamic banks
English - Wednesday 09 June 2021 الساعة 03:47 pm
Aden, NewsYemen, special:
A senior official in a commercial bank in Sana'a said that the Houthi militia asked them to convert commercial banks into Islamic banks, arguing that they deal in "usury" and the reason behind delaying victory.
The source, who requested anonymity, confirmed to NewsYemen that the Houthi militia's goal is to steal the rights of banks and depositors that have accumulated with the Central Bank in Sana'a during the past six years.
He added, the Houthi militia's tendency to convert commercial banks to Islamic will result in the loss of shareholders' rights, which consisted of the difference between the debit and credit interests received by the bank before the conversion, and the loss of interest on customer deposits received by commercial banks.
He pointed out that Islamic banks and the Central Bank are not obligated to pay interest to depositors, because the interests of deposits in Islamic banks do not guarantee profit, but profit and loss.
Islamic banks depend in their transactions on the principle of profit and loss sharing, unlike commercial banks that depend in their work on profit and the interest system.
And he added, the Houthi militia will argue that the deposits did not make any profits because of the war, and were subjected to losses, which means the loss of depositors’ accumulated rights for years, and legitimizes the looting of banks and depositors’ money.
For more than 6 years, the Houthi militia has prevented commercial and Islamic banks from using their balances in the central bank in Sana'a, and refrained from paying their debts and interests amounting to 12% of total deposits each year, which are considered fully liquid according to the law.
Commercial banks stopped handing depositors their money that was deposited before 2016, and prohibited them from withdrawing any amounts under any living or sick conditions.
During the past years, the Houthi militia drained the commercial banks' funds amounting to two trillion and 150 billion riyals to finance their war activities, from which it took one trillion and 264 billion riyals of debts "government bills and bonds", representing 59% of the total value of customers' deposits in commercial banks.
The Houthi militia also disposed of the legal reserve of commercial banks in the Central Bank, amounting to 354 billion riyals, or 17 percent of the total deposits in commercial banks.
Financial data indicate that commercial banks cannot control the management of 76% of the total value of customer deposits in commercial banks, with the Central Bank in Sana’a, to exceed 80% in 2019.
