The Bank of Lebanon now requests, in two official circulars, to count repayments already made in future payments to depositors. This position illuminates the battle over the deposits in Lebanon. Behind the promises of restitution, arbitration remains open on bank capital, disputed claims and taxpayers’ contributions.
The debate has just taken a concrete step. In the preambles of itscircular intermediates 780 and 781dated 3 November 2026, the Bank of Lebanon affirms the need to take into account the amounts already paid under its circulars when calculating future payments under the Deposit Return Law. It invokes equity between applicants and the prevention of double counting.
This formulation is important. The integration of earlier withdrawals into the future repayment envelope is now reflected in official Central Bank texts. But these circulars do not vote the law expected. They do not, in themselves, establish a definitive entitlement to $100,000 or the full method of calculating that amount.
The information relayed by economic journalist Mounir Youniss sheds light on five orientations, according to him, defended by the BDL in the negotiations. They concern the control of restructuring, the protection of capital increases, the deduction of withdrawals, deposits considered irregular and the burden imposed on the State. Their common feature is the distribution of losses. Their level of confirmation, however, is not the same.
Consolidating these proposals with final decisions would weaken criticism. The challenge is better: to identify the mechanisms that reduce banks’ obligations, to determine who bears the cost and to verify the guarantees offered to depositors.
Deposits in Lebanon: what the already paid withdrawals change
The draft approved by the Council of Ministers on 26 December 2025provided for restitution of up to $100,000 over four years. Higher amounts had to be covered by financial instruments repaid over longer periods. This government architecture is a starting point for negotiations, not an amount immediately available at the counter.
The issue of circulars 158 and 166 relates specifically to the definition of this first instalment. Is this an additional $100,000 calculated on the balance still blocked? Or a cumulative envelope, from which the sums already received since the beginning of the scheme would be deducted? For the same applicant, the two readings can produce very different results.
Let us take a purely illustrative example. One client owned $200,000 and received $30,000. The balance remains at $170,000. If the future cash instalment amounts to an additional $100,000, its cumulative cash receipts will reach $130,000. If the $30,000 is included in the ceiling, it will only receive $70,000 in that instalment.
The difference is therefore $30,000 in future cash. It does not necessarily mean that this amount will be cancelled in the total debt. According to the wording chosen, it could switch into an instrument with a distant maturity. However, this move is sufficient to substantially change the situation of a pensioner, family or business.
Another example shows why the debate requires precision. A depositor who had $80,000 and has already withdrawn 30,000 of it retains only $50,000 in debt. Returning those $50,000 to him restored his original principal. It does not have an automatic right to receive an additional $100,000 solely because of a ceiling of protection.
The BDL therefore defends a real argument of equal treatment. But this argument must be confronted with the modalities of past withdrawals. One dollar actually received is not equivalent to one dollar debited from the account against books at an unfavourable rate. Assimilating both would amount to counting a loss already incurred as a full refund.
The future law will need to specify the reference date, the amounts actually received, the processing of payments in books and the consolidation of accounts. It will also have to prevent a sum being deducted twice. Without these rules, a measure presented as an accountant would become a new source of inequality.
The 7 to 8 billion is not an audit of the invoice
Youniss estimates between $7 billion and $8 billion in withdrawals. This order of magnitude should not be presented as a consolidated total, audited and decided on November 5.
A statement by Karim Suaid,reported on 7 september 2026reported about $6.1 billion in cumulative payments. On September 18, the governor announced a total expected of 8.1 billion by the end of 2026. An annual forecast alone does not allow for the exact amount disbursed today.
Most importantly, total payments do not directly measure the savings that would result from their deduction from the $100,000 limit. This calculation requires their distribution by depositor and by tranche of bank assets. Customers whose debt is already fully repaid do not have the same effect as those whose balance is still well above the ceiling.
There is also a need to distinguish funding from these payments. The banks’ own resources, mandatory investments in the BDL and other central bank resources are not interchangeable. A transfer between these categories may change the presentation of accounts without creating a single additional dollar.
20% capital: protect which resource, for what risk?
The second criticism relates to the capital increases requested after the collapse of 2019. The original document exists.Intermediate Circular 532 of 4 November 2019required an increase corresponding to 20 % of the reference ordinary own funds as at 31 December 2018. It provided for two 10 per cent tranches, initially funded by dollar contributions.
This represents neither 20% of deposits nor 20% of losses nor 20% of solvency. It corresponds to an increase calculated on an earlier capital basis. The conditions then changed. Nor does the regulatory requirement prove that all banks have contributed new dollars under the same conditions.
Youniss blames the BDL for wanting to preserve this capital increase from the absorption of losses. The information it relays concerns a direction of negotiations, not a definitively adopted exemption. The distinction does not diminish its scope: preserving certain own funds would reduce the resources available to absorb losses.
However, the economic principle makes it possible to measure the stakes involved. Own funds absorb losses before higher-level claims. IMF services explicitly recalled this13 february 2026no depositor should bear a loss before shareholders or subordinate creditors.
Exclude existing equity funds from such absorption, while reducing the rights of depositors, would therefore require a precise legal and financial justification. The only date of a contribution does not demonstrate that it deserves more protection than bank savings.
It is also necessary to distinguish this old money from a truly new recapitalisation, made after recognition of the losses. Attracting new investors involves a sound bank, a credible entry price and acceptable governance. This need for future capital does not automatically justify preserving the value of existing holdings.
The audit must establish, bank by bank, the nature of the contributions made, their origin and the rights attached to the instruments issued. A capital debt conversion does not provide the same liquidity as a foreign transfer. An increase in a balance sheet is therefore not sufficient to measure the real effort of the owners.
Restructuring cannot depend solely on the central debtor
Youniss’ first criticism is about decision-making power. In his view, the BDL would like to conduct restructuring alone and circumvent part of the new legal framework. This accusation must be put back in a chronology now precise.
Lebanon adoptedlaw 23 of 14 august 2025, then law 71 of 10 september 2026. The Constitutional Councilpartially censored on 20 octoberArticle 3 and two expressions in Articles 19 and 27. He didn’t cancel the whole reform.
Another key distinction is that the High Banking Commission and the Banking Supervisory Commission are two different bodies. The framework organises a decision-making role for the first and monitoring and evaluation functions for the second. The governor himself retains an important place in this architecture. The choice is therefore not limited to a totally excluded or totally sovereign BDL.
The implementation of the scheme remains suspended until the adoption and publication of the Act on Financial Recovery and Return of Deposits. Presenting all its procedures as already operational would be misleading.
This institutional organization has a direct financial consequence. Banks hold large claims on BDL. It is therefore simultaneously central bank, regulator and debtor at the heart of the valuation. The more the recoverable value of these claims is overestimated, the stronger the banks appear and the lower their need for capital appears.
The independence of evaluations is not a decorative precaution. It protects depositors from restructuring based on values that debtors cannot honour. It also protects effectively viable banks against collective treatment that masks differences between institutions.
The IMF called for an independent, transparent and effective process in February.In September, its services welcomed the amendments then adopted. This assessment preceded the constitutional censorship in October. It is therefore not worth early validation of all the modalities that could eventually emerge from the negotiations.
« 30% irregular » is not 30% proven fraud
The fourth point deserves special attention. Consisting of a September interview with the Governor, the Governor estimates that anomalies affecting commitments to the BDL could reach 30% of their value.
This is an estimate advanced by the Governor, not the public outcome of an individual audit. And its denominator is important: the liabilities on the balance sheet of the central bank are not automatically confused with all customer deposits of commercial banks.
The term « irregular operations » also brings together different situations. Funds of criminal origin, exceptionally high interest, a conversion of books into dollars or a privileged transfer after the crisis do not necessarily fall under the same procedure. Their treatment requires separate criteria and an identifiable legal basis.
An established fraud claim does not deserve the same protection as an employee’s lawful savings. But the usefulness of this distinction does not preclude the establishment of facts. An overall objective of reducing liabilities cannot be used as evidence against each account holder.
The responsibility of banks must also be included in the calculation. Who proposed the operation, set its remuneration, accepted the funds and checked their origin? If the depositor loses his claim while the institution retains the income of the transaction without examination, the balance sheet clearance becomes very asymmetric.
Finally, canceling a debt and recovering an asset are two different shares. A deposit reduction reduces an accounting commitment. She doesn’t bring back the dollars out of the system. The recovery of diverted money involves investigations, enforceable decisions and actual receipts. Adding these two mechanisms as if they provided the same resource would artificially inflate funding for the plan.
Making the State pay means choosing other losers
The last complaint concerns the public contribution. The banks recall that they have financed the state and placed a significant part of their resources in the central bank. The State defaulted on its foreign currency debt in March 2020. His responsibility for the collapse cannot be ruled out.
But recognizing this responsibility does not automatically give banks an unlimited guarantee of future tax revenues. Three questions remain distinct: what public debt is legally established, what losses arise from BDL’s own decisions, and what risks have banks agreed to focus on their balance sheets?
In his 2023 reportThe IMF was already describing the impossibility for an overindebted state to recapitalize the central bank at the necessary scale. Cross claims therefore required recognition of losses. Moving a bond from banks to the BDL, then from the BDL to the Treasury, does not make the country richer.
Public cost takes several forms. Additional debt requires future repayments. The allocation of revenue reduces the means available for collective services. The disposal of assets removes resources or future revenues from the public assets. A taxpayer without a bank deposit can finance the rescue of a credit claim.
The World Bank estimated financial losses at over $72 billionin its analysis of november 2022. This old figure does not constitute a new audit in 2026. However, it shows why the undifferentiated mobilisation of public assets did not already provide a sufficient or fair solution.
The IMF does not impose an absolute ban on any State contribution in its recent statements. It calls for it to remain compatible with debt sustainability. This constraint requires the publication of realistic multi-year funding, rather than a commitment the taxpayer would gradually discover the price.
The repayment period is also a loss
The conflict is not only about the nominal amount returned. Getting $100,000 over four years or longer changes housing, care and investment opportunities. Nor does a negotiable security offer the certainty of recovering its face value by selling it immediately.
To illustrate this, without claiming to provide for future Lebanese securities: $100,000 paid in one time in twenty years is worth about $37,700 today with a hypothetical discount rate of 5%. At 10 per cent, their present value is around $14,900. These calculations imply the absence of interim payments. They do not describe any adopted product.
The performance, timing of payments, guarantees and risk of default would change this result. This is precisely why a promise of « full » restitution cannot be assessed solely on the amount printed on a security.
In the shorter term, the circulars of November 3monthly ceilings of $1,200 under $158 and $600 under $166from 1 December. In both cases, a portion is reserved for card payments: $400 and $200 respectively. The shares available, inter alia, in banknotes remain at $800 and $400.
This improvement in payments helps beneficiaries. It does not provide a general return of deposits or a solution to loss-sharing. In the same texts, the BDL is already preparing for their inclusion in the future regulation. The next draft will therefore have to show, for each category of depositors, the recognized balance, the previous payments retained, the outstanding amount and the fate of the claim above the ceiling.
Reference documents
Decisions 13901 and 13902 of 3 November 2026 are available from the Bank of Lebanon:circular 780andcircular 781. The information attributed to Mounir Youniss is distinguished, in this analysis, from official provisions and unaudited encrypted statements.
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