Houthi militias in Yemen have frozen 1.7 trillion rials (around $3.3 billion), the total investment of commercial banks in government debt over the past years. This is in keep with the Iran-backed group’s systematic looting of funds and assets.
The frozen funds were transferred to non-withdrawal current accounts. Houthis justified their move by saying they are combating and preventing loansharking in banking transactions.
A few days ago, the Houthi-controlled Central Bank in Sanaa issued a decision to freeze the investments of commercial banks in government debt bonds (Treasury bills), according to sources in the Yemeni Chamber of Commerce and Industry.
Such a step preludes confiscating the profits of commercial banks and canceling a large part of the internal government debt owed to banks, under the name of stopping usury related transactions.
In the aftermath of Houthi militias taking over the Central Bank in Sanaa, commercial banks were unable to recover their investments in treasury bills, government bonds and certificates of deposit.
Moreover, the Central Bank’s cash holdings also collapsed.
Assets held on the premise amounted to 2.8 trillion riyals, according to 2014 data, but when Houthis stormed Sana’a, the valuation of these assets in dollars fell from $13 billion at the time to $5 billion.
The Houthi coup had driven the national currency’s price against the dollar down.
Mutahar Al-Abbasi, the former deputy minister of planning, points to Houthis deriving the usury prevention draft law from the documents of the Libyan General National Congress issued in 2013.
“The Houthi bill will undermine a number of laws, foremost of which are the Central Bank of Yemen law, the banking law, the microfinance law, and others,” explained Al-Abbasi.
Al-Abbasi warned of the danger of reducing legislation and laws regulating banking to a draft law that does not exceed 12 articles.