Lebanese authorities intend to shut down all money exchange firms that deal with Hezbollah whilst the Central Bank plans to close Al-Qard Al-Hasan's branches across Lebanon to meet demands from US envoy Tom Barrack, Al-Arabiya's Al-Hadath reported on July 17.

The report follows the Central Bank issuing a circular barring banks and brokerages from dealing with Al-Qard Al-Hasan, described as Hezbollah's financial arm.

Barrack called the move "a step in the right direction by the Lebanese government," posting on X platform that "transparency and alignment of all financial intermediaries in Lebanon under the supervision of the Central Bank is a valued and necessary accomplishment."

The Central Bank prohibited all licensed financial institutions in Lebanon from dealing directly or indirectly with unlicensed entities, listing Hezbollah's Al-Qard Al-Hassan as an example. Whilst the bank had issued similar circulars previously, this marks the first time it mentions Al-Qard Al-Hassan by name.

The US Department of the Treasury imposed sanctions on Al-Qard Al-Hassan in 2007, stating that Hezbollah used it as a cover to manage "financial activities and gain access to the international financial system."

Al-Qard Al-Hassan, founded in 1983, describes itself as a charitable organisation providing loans according to Islamic principles that forbid interest. Israel struck some of its branches during its war with Hezbollah last year.

Operating as a not-for-profit organisation under a Lebanese government licence, it has more than 30 branches, mostly in predominantly Shiite Muslim areas of Beirut and its suburbs, southern Lebanon and the Bekaa Valley.

A Lebanese official said the Central Bank move had been in development for months, reflecting US pressure on Lebanon to take action against Hezbollah's financial wing.

Nassib Ghobril, chief economist at Byblos Bank, said Lebanese banks were already careful to avoid dealing with Al-Qard Al-Hassan due to US sanctions.