The economy of Lebanon has experienced a period of unprecedented decline and turmoil in recent years, with factors such as political instability, corruption, and the massive explosion in Beirut in 2020 exacerbating the situation. Consequently, the Lebanese banking sector has been significantly impacted, with many banks struggling to maintain solvency and the trust of their customers.

In the face of these ongoing economic difficulties, the protection of individual deposits in Lebanese banks has become a pressing concern for many. With an increasing number of banks facing potential collapse, the protection of bank deposits plays a crucial role in ensuring the safety of the financial system.

The current economic challenges in Lebanon have led to soaring inflation rates, a plummeting currency, and shrinking GDP. The banking sector, once considered the backbone of the Lebanese economy, is now plagued by a lack of liquidity and an inability to meet the demands of depositors. This precarious situation has put the spotlight on the absence of an operational Deposit Guarantee Scheme, which aims to protect the deposits of individuals in case of bank failures.

In the absence of a traditional and active deposit insurance system, bank deposit protection in Lebanon relies on a legal framework consisting of various laws and regulations. These include the Banking Secrecy Law, the Law on the Control of Financial Institutions, and the Central Bank of Lebanon’s directives. This legal framework aims to safeguard depositors’ rights and interests, ensuring that their funds remain secure in the face of the ongoing banking crisis.