By Faisal Abu Bakr | 2025-02-17

ADEN -- The Houthi-controlled central bank in Sanaa has begun to implement a new plan to release frozen bank deposits in tiny monthly installments, effectively forcing depositors to wait some years to recover their savings, economists said.

The Iran-backed group's new mechanism, which went into effect January 5, limits monthly withdrawals to 100,000 YER (approximately $400) for accounts holding less than 20 million YER ($80,500), according to the bank's directive.

The policy comes after years of Houthi restrictions prevented depositors from accessing their savings in commercial banks in areas under the group's control.

"This mechanism is nonsense and a manipulation of depositors' rights," a Yemeni bank branch manager told Al-Fassel, asking that his name be withheld.

There are now two central banks in Yemen, one in Aden -- controlled by the legitimate government, which moved it there in September 2016 -- and one at the original location in Sanaa, which is now controlled by the Houthis.

Houthi authorities froze bank withdrawals in 2017, while imposing hefty penalties on banks attempting to release funds, the manager said.

Even depositors who won court cases ordering banks to release their money were ultimately denied access after Houthi officials instructed courts to reject such claims, he said.

"I saved three million YER ($12,000) to guarantee my son's university education expenses," said Issam Ahmed, a depositor at Yemen International Bank.

"He enrolled in 2017, the same year the bank refused to pay even in monthly installments."

"After eight years of refusal, the bank comes with installments of 100,000 YER as if it's social security, while in reality, it's our money," he said.

A 'mockery' of the Yemeni people

The restrictions have pushed many Yemenis to keep cash at home rather than use banks, leading to a shortage of physical currency in Houthi-controlled regions, Economic Media Studies Center director Mustafa Nasr told Al-Fassel.

"The monthly 100,000 YER payments aren't enough to guarantee minimum decent living standards, especially for those who relied on these deposits for retirement or personal expenses," he said.

The policy particularly impacts small depositors, who represent the majority of account holders in Yemen's commercial banking system.

Many had entrusted their life savings to these institutions before the Houthi takeover of the Sanaa central bank.

The Houthis' new payment scheme comes amid growing public awareness of the substantial revenue streams they derive from al-Hodeidah port operations, taxes and customs, and various extortion schemes, al-Najjar said.

The minimal payments now being released are merely an attempt to quell mounting public anger, he said.

Al-Najjar dismissed the plan as a "mockery" of the Yemeni people, attributing its timing to the Houthis' growing vulnerability as the Iranian regime's regional influence wanes and domestic pressure builds.