29-07-2025
Banking reform law reaches Lebanese Parliament: What it means for depositors
Report by Lea Fayad, English adaptation by Yasmine Jaroudi
After years of delays, Lebanon's long-awaited banking reform law has finally reached the Parliament for approval in a general session.
The latest draft introduces key amendments that directly impact depositors, particularly those with multiple accounts in different banks.
One of the most significant changes guarantees account independence. Under the revised version, if a depositor holds three separate accounts at three different banks, each with $100,000 or more, they would be entitled to reclaim up to $300,000 in total.
This marks a sharp departure from the government's original proposal, which would have capped compensation at $100,000 per individual, regardless of the number of accounts held or the banks involved.
Another major shift prioritizes individual depositors over public institutions.
While the government's previous version gave full repayment priority to public sector deposits, the new draft restores precedence to private depositors seeking to recover their savings.
Passing the law is seen as a positive step, but observers note it remains incomplete.
The law's actual implementation hinges on the adoption of a separate piece of legislation: the Financial Regularization and Deposit Recovery Law. That law will determine how financial losses are apportioned between the state, the Banque du Liban (BDL), commercial banks, and depositors.
This is where the process gets more complex.
Finance Minister Yassine Jaber has pledged to submit the financial regularization bill to the Parliament within six months. However, skepticism remains high.
Nearly six years have passed since Lebanon's financial collapse began, with successive governments failing to push through a deposit recovery mechanism.
Meanwhile, citizens' deposits remain effectively frozen, widely seen as a violation of their rights.
For many, unless the upcoming legislation offers a genuine solution to the banking crisis, current efforts may be viewed as little more than political maneuvering ahead of the next parliamentary elections.
