BDL's plan to address deposit crisis: What Lebanese depositors need to know

Report by Bassam Abou Zeid, English adaptation by Yasmine Jaroudi

Lebanese depositors seeking to recover their full bank deposits may face a harsh reality, as ongoing discussions suggest a partial repayment scheme. 

The plan, still under discussion, proposes different repayment structures based on when the deposits were made.

Depositors with accounts opened before October 17, 2019, are proposed to receive up to $100,000, while those with accounts opened after that date might receive up to $36,000. Both amounts would be disbursed over a maximum period of 15 years.

According to various sources, the total estimated amount needed for these repayments ranges from $15 billion to $22 billion. 

However, banking sources reveal that Lebanese banks are reportedly unable to fully fund this amount. 

Consequently, it is suggested that the repayment be shared equally between the banks and Banque du Liban (BDL), where a significant portion of the deposits was originally placed by the banks.

To alleviate the financial strain on both BDL and banks, the following measures have been proposed:

1. Verification of deposit sources: Only deposits with proven clean sources of funds will be eligible for repayment.

2. Exclusion of certain borrowers: Those who have benefited from loan repayments at the exchange rate of LBP 1,500 per dollar, where the total loan value at the onset of the crisis was $38 billion, may be excluded.

3. Exclusion of large depositors: Large depositors, who can be classified as investors rather than typical depositors due to the size of their deposits, may also be excluded.

4. Exclusion of profiteers: Individuals who benefited significantly from the Sayrafa platform and those who engaged heavily in selling checks are likely to be excluded.

5. Exclusion based on subsidy benefits: Those who benefited from subsidies on fuel and other commodities may not be eligible.

6. Alternative benefit mechanisms: Proposals include monthly dollar payments for retired depositors along with healthcare provisions.