An International Monetary Fund mission is due to arrive in Lebanon next week for a new round of talks focused on a draft law aimed at compensating bank depositors; a key reform needed to unlock long-delayed international financial support.

Finance Minister Yassin Jaber told parliament last week that the IMF delegation would be in Beirut from Feb. 9 to 13. The visit comes just days after lawmakers approved the 2026 State budget and as parliamentary committees prepare to begin examining the proposed “financial gap” bill, which is central to efforts to address Lebanon’s banking crisis.

Officials and analysts say the draft law will be the main subject of discussions with the IMF. The legislation seeks to tackle the massive losses accumulated in Lebanon’s banking sector since the country’s financial collapse in 2019.

“The financial gap bill and the IMF’s observations on it will be the most important item on the mission’s agenda,” a Lebanese government source familiar with the talks told Al-Modon.

The bill sets out a framework for distributing losses across Lebanon’s shattered banking system. In line with IMF requirements, it stipulates that bank shareholders should absorb the first tranche of losses, followed by other creditors, with depositors protected as far as possible.

However, the IMF is expected to push for stronger safeguards to ensure that this sequence is strictly respected.

According to sources familiar with the Fund’s position, one of its main concerns is that losses could be shifted onto depositors prematurely if banks are allowed to reduce the value of deposits before formal restructuring takes place.

To prevent that scenario, the IMF is likely to demand a clear, step-by-step timetable for reforms. Under such an approach, authorities would first determine the size of the financial gap at the Central Bank, then assess the losses of each individual bank. Shareholders would be required to absorb those losses through capital write-offs and recapitalization before any adjustment affecting depositors.

“This sequencing is crucial to ensure that depositors are not forced to bear losses before shareholders have fully exhausted their capacity to do so,” the source said.

Another sensitive issue expected to feature prominently in the talks is the role of the State in recapitalizing Lebanon’s Central Bank.

The current draft law commits the government to helping rebuild the Central Bank’s balance sheet, but leaves room for negotiation between the Finance Ministry and the Bank over disputed liabilities. The IMF, which places debt sustainability at the heart of its approach, is expected to seek tighter limits on any new public borrowing for that purpose.

The Fund fears that vague wording in the bill could open the door to a significant increase in public debt. Recent statements by the Central Bank governor suggesting that the State owes more than $50 billion to the Bank have heightened those concerns, officials say.

A third area of debate is the mechanism for guaranteeing deposits.

The draft law proposes repaying up to $100,000 to each depositor across the entire banking system within four years. The IMF, however, favors a different approach that would calculate guaranteed amounts on a per-account basis rather than per depositor.

That method could benefit customers who hold multiple accounts in different banks, but would likely reduce the guaranteed ceiling for each individual account.

Beyond the financial gap bill, the IMF mission is also expected to discuss amendments to Lebanon’s recently adopted banking reform law.

That legislation reorganized the Higher Banking Commission, which oversees decisions on whether troubled banks should be restructured or liquidated. But the IMF has raised concerns that the Association of Banks could exert influence over the commission and that broad appeal rights might allow banks to delay or block restructuring efforts.

The government has already prepared amendments aimed at addressing those objections, and those changes will be reviewed during next week’s meetings.

The IMF delegation is also likely to examine broader fiscal policy, particularly the sustainability of the State budget at a time when the government is preparing to adjust public sector salaries and pensions.