Interview: Karam Bechara, General Manager at Shahba Bank (former Byblos Bank Syria)

Based on the recent news about President Donald Trump and the United States (US) administration wanting to lift sanctions on Syria, what is your reaction to this?

It’s very positive. The most important indicator for me is the policy shift by the US: from total denial to recognizing Syria and the Syrian people. The meeting between President Trump and President Ahmad Al-Sharaa was a very positive signal, showing goodwill. Today, we have to understand that, from a legal point of view, the US sanctions began in 1979 and are very complex. Not all of them will be lifted easily or immediately. Now we’re waiting for the US Treasury to issue a press release or plan clarifying what will be lifted and what will take more time.

What about General License 24 and the partial suspension of sanctions by the EU? Have these had any impact on Syria’s banking sector?

In practice, no. We contacted several banks in Europe and the Gulf, but none are willing to engage unless they are sure these measures will be extended or made permanent. However, banks in Syria remain optimistic, especially with the appointment of a new Central Bank governor who met with us recently. If sanctions are lifted, we believe it will open the door to foreign investment and the return of Syrian capital.

Beyond sanctions, compliance remains a key issue. Syria’s banking sector has been disconnected from global systems for over a decade. Are Syrian banks ready to meet international compliance standards on anti-money laundering and counter-terrorism financing (AML/CFT)?

Absolutely. Despite the disconnect, most Syrian banks have continued to apply international compliance standards. We use the same compliance screening systems as international banks to detect suspicious transactions and ensure AML/CFT compliance. Thus, adapting to FATF or other international standards would take only a few weeks or months at most. Should sanctions be lifted tomorrow, and we wanted to initiate a relationship with a correspondent bank, we would just need to fill in the usual questionnaires. We’ve done this many times. 

We also believe that once sanctions are lifted, foreign banks will be open to re-engaging—provided their due diligence confirms compliance, AML frameworks, and financial soundness. While Syrian banks are generally under-capitalized, we expect strategic partners to step in and recapitalize their Syrian subsidiaries, enabling us to meet international standards and resume correspondent banking relationships.  

As for Shahba Bank specifically, we are already in full compliance with international norms.  We’ve adopted Basel [Accord] II and are partially compliant with Basel [Accord] III, particularly regarding capital adequacy. We are confident in our ability to rejoin the international banking system without needing outside technical support.

How would you assess the current relationship between the Central Bank of Syria and private banks, especially under the new leadership? Can the Central Bank genuinely become independent within Syria’s new political context?

We are entering a new phase with the new governor, Dr. Abdulkader Husarieh. The entire economic framework is being redefined. New roles are being assigned to the Central Bank, the Ministry of Finance, and the Ministry of Economy and Industry. The aim is to build a more modern and functional economic system. Whether the Central Bank can truly become independent depends on the government’s intentions. If they are serious about implementing this vision, it is achievable. The fundamentals are clear. However, it will be challenging given the entrenched bureaucracy and the complexities of the current decision-making structure.

After the fall of the Assad regime, many were surprised by the emergence of a liquidity crisis. How do you explain the current situation, and how do you assess recent Central Bank decisions like restrictions on transfers and withdrawals?

What we are facing isn’t a liquidity crisis, but a cash crisis. Banks have liquidity on their balance sheets, but there is not enough physical cash in circulation to sustain Syria’s heavily cash-based economy. No one really knows how much cash is actually in the country or within the banking system. These figures were managed opaquely by the previous regime, and the new leadership is still adapting. Recent Central Bank decisions, including transfer and withdrawal limits, are short-term fixes. But the broader direction under the new governor is toward restoring fundamentals and building an independent, stability-focused institution. To alleviate the cash crisis, the Central Bank could start by issuing higher-denomination notes and withdrawing smaller ones. If managed carefully, this process would minimize inflationary risks and avoid broader economic destabilization.

Given Syria’s cash-based economy and widespread mistrust in the financial system, how is your bank working to rebuild trust with customers?

We have to show our customers that we are transparent and reassure them that the system is functioning and accessible. We explain our resources and how we manage them. Our ATMs are usually stocked and operational, allowing people to withdraw salaries easily. For larger clients, such as traders and industrialists, we offer trade finance facilities to help them use their funds to import goods. These steps are helping to rebuild confidence.

Besides lifting sanctions, what are the top three policy steps that could help restore Syria’s banking sector?

First, rebuild local trust. We should encourage Syrians to use banks again and transition away from cash transactions. This requires making people feel safe from tax authorities and confident in the system.

Second, ensure Central Bank independence. The Central Bank must have autonomy to fulfill its regulatory role, including setting interest rates based on market conditions, not administrative decisions.

Third, re-establish international trust. Re-engage with foreign correspondent banks by being transparent, sharing data, and rebuilding credibility. This could be achieved within three to six months once sanctions are lifted.