Lebanese depositors face high uncertainty and a long wait in recovering their money from banks, despite a draft law aimed at gradually repaying customers' funds frozen in the banking system since the 2019 financial meltdown.
Lebanese banks do not have sufficient liquidity to repay all depositors amid a foreign-currency crunch, analysts say.
The proposed banking law "reduces immediate pressure on the system but does not ensure ultimate recovery", said Walid Abousleiman, co-founder of Cyprus-based financial services company Aksys Global Markets.
The likelihood of repayment is conditional and uncertain rather than assured Walid Abousleiman ,
co-founder of Cyprus-based financial services company Aksys Global Markets
"In that sense, the likelihood of repayment is conditional and uncertain rather than assured."
Meaningful payouts are unlikely to be made quickly and enforcing the proposed law once it is passed will be critical for depositors to receive their money.
"Ultimately, depositor outcomes will depend less on the passage of the law itself and more on whether it is accompanied by credible enforcement, transparent loss recognition and a clear hierarchy of claims," Mr Abousleiman said.
"Without these, the law may manage the crisis administratively but fall short of resolving it economically."
Lebanon's cabinet is debating a proposed banking law this week after a majority of ministers signalled support for the bill endorsed by Prime Minister Nawaf Salam. It would redistribute the country’s financial losses, borne overwhelmingly by ordinary Lebanese since 2019, b
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