Lebanon’s government is finalizing a long-awaited plan to reimburse bank deposits and close a financial gap that has crippled the country’s economy since 2019, sources familiar with the discussions told Nidaa Al-Watan newspaper.

The plan, being drafted by a three-member committee including Finance Minister Yassine Jaber, Economy Minister Amer Bisat and Central Bank Governor Karim Souaid, would launch under a “Financial Gap Law” and aims to restore confidence in the banking system.

Sources insist the framework will not impose a “haircut” on deposits. Still, projections indicate that the total reimbursable amount will shrink from around $82 billion today to between $50 billion and $55 billion. The reduction would come from three rules:

1. No repayment of suspicious deposits whose owners cannot or will not prove the source of funds.

2. Recalculation of excessive interest accrued on large accounts, many of which benefited from abnormally high returns. These will be reduced to more “reasonable” levels, treating such accounts as investments rather than mere savings.

3. Deposits converted from lira to dollars after October 17, 2019 will not be reimbursed at the actual market dollar rate. Instead, a special accounting rate—still under discussion but likely between LBP25,000 and LBP35,000 per dollar—will apply, meaning depositors would recover only about 27–37% of face value.

$100,000 threshold

A centrepiece of the plan is a guaranteed $100,000 payout to each depositor in cash, costing about $16 billion. The threshold will not change, sources assured, though repayments would likely be spread over three to five years. Depositors with balances above $100,000 are unlikely to receive the same guaranteed cash amount, with accounts divided into three brackets: up to $100,000, between $100,000 and $1 million, and above $1 million.

Larger sums would be reimbursed through long-term bonds guaranteed by the Central Bank, carrying low interest rates to make them tradable. Maturities would be at least 15 years. An independent institution funded by the Central Bank — backed by government debts and potentially gold reserves — would guarantee the bonds.

Governor Souaid has said the State owes the Central Bank $16.5 billion, money drawn down from a special account created for Eurobond proceeds. Negotiations are under way to restructure the debt, with an initial settlement of around $5 billion expected to fund the guarantee mechanism.

Moreover, the Central Bank plans to monetize some of its assets and potentially leverage Lebanon’s gold reserves to create a permanent revenue stream for the bond fund. Early market estimates suggest that once issued, the bonds could trade at 20–25% of face value—a level experts consider reasonable and likely to rise over time as confidence in the guarantees improves.

Legal and political hurdles

The Central Bank has commissioned legal studies allowing Parliament to pass the extraordinary law during a national crisis. The draft is expected to reach Cabinet within weeks and be referred to Parliament before year’s end.

Whether lawmakers approve the politically fraught plan before the May 2026 elections remains uncertain.

While the committee effectively represents the country’s top three political leaders, thus guaranteeing Cabinet passage, Parliament remains a wild card. Many MPs may resist backing the plan publicly to avoid electoral backlash, even if they privately support it. That could delay implementation until after the new legislature takes office in mid-2026.