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Fransabank closed all of its branches on Wednesday after a judicial order and said it would be unable to meet client demands, including paying .

, one of Lebanon's biggest lenders, said in a statement that the judicial order had frozen all its "shares, properties and assets".

The order required Fransabank to of Egyptian depositor Ayad Ibrahim and pay out his deposit in cash, or else its assets would be seized, his lawyer Rami Ollaik said.

Fransabank said it was implementing the order, with safes at its branches sealed with red wax. It said Ibrahim had closed his account and "recovered all of his deposit".

The bank did not immediately respond to emailed questions from Reuters seeking comment on Ibrahim's claim, and whether the it would appeal against the judicial ruling.

More than $100 billion remains stuck in a banking system paralysed since 2019, when the Lebanese economy collapsed due to decades of unsustainable state spending, corruption and waste.

Banks have called on the government to pass a capital control law, but in the absence of formal controls, they have largely blocked dollar withdrawals and transfers abroad, sparking numerous legal challenges, with mixed results.

The judge who issued the order could not be reached for comment by Reuters on Wednesday.

A Fransabank source said Ibrahim was no longer a client because the bank had issued him a cheque for the value of his deposit, and he had signed for the cheque at a notary.

A spokesperson for United For Lebanon, an anti-corruption group representing Ibrahim, said he had "signed for the cheque but with reservation".

Lebanon's banking association criticised what it described as "arbitrary and illegal measures" being taken against lenders, saying these threatened to "topple the banking sector".

Ibrahim told Reuters he had deposited the money some four months before the crisis began, adding that Fransabank had refused his request to transfer funds for his sick brother.

His lawyer said the deposit was less than $100,000.

Banks have already closed many dollar accounts by issuing cheques which cannot be cashed and instead change hands in the market at a fraction of their face value.

Another judge recently froze the assets of five other Lebanese banks and members of their boards while she investigates transactions they undertook with the central bank, a judicial document showed.Ìý

That judge has not charged any of the parties mentioned.

And last month a London court ordered Lebanon's Bank Audi and its peer SGBL to transfer $4 million to a British client whose money was stuck in the banks.Ìý

An association representing depositors said Bank Audi subsequently closed more than 30 accounts belonging to British nationals or close relatives, issuing cheques for the balance.

(Reuters)