A $70 Billion Void: The Lebanon Gap Law Depositor Reimbursement 2025 Offers Bitter Hope

Six years after one of the modern era's most devastating financial collapses, a glimmer of restitution has emerged. On December 30, 2025, Lebanon's cabinet approved a draft law aimed at returning frozen funds to desperate citizens. Since the crisis ignited in 2019, the Lebanese Lira has hemorrhaged 98% of its value, leaving depositors locked out of their life savings and occasionally driving them to take up arms against their own banks.

The Lebanon Gap Law Depositor Reimbursement 2025 Breakdown

According to reports from Al Jazeera and AFP, the so-called 'Gap Law' promises that depositors with up to $100,000 will be reimbursed within four years. It's a significant acceleration compared to previous 2020 proposals that suggested a 10-year timeline. However, the fine print is sobering: the cap applies per depositor, not per account. Those with larger balances will receive their first $100,000 in cash, while the remainder will be converted into state-backed bonds.

Prime Minister Nawaf Salam is pairing this move with a mandatory forensic audit of the banking sector. This audit aims to peel back the curtain on years of 'financial engineering,' dividends paid to shareholders, and executive bonuses that continued even as regular citizens couldn't afford bread. Fouad Debs of the Depositors Union noted that this transparency is crucial to reconciling the massive discrepancies between bank claims and state records.

Who Bears the Burden of the Collapse?

The central tension lies in who pays for the $70 billion hole in the system. Banks argue they entrusted the Central Bank (BDL) with the money, which was then spent by a profligate state. Critics, however, point out that banks knowingly 'put all their eggs in one basket' to reap high-interest rewards. Under the current draft, banks are only responsible for 40% of the withdrawals.

The IMF has surprisingly aligned with civil society, questioning why depositors should be penalized before the bankers. There's a growing fear that using state assets, including gold reserves, to back bonds could essentially serve as a backdoor bailout for large institutional depositors and foreign 'vulture funds' at the expense of the general public.