Lebanese Parliament Moves to Clarify Bank Reform Law and Restore Depositor Confidence

The Finance and Budget Committee convened under the chairmanship of MP Ibrahim Kanaan, with the attendance of Finance Minister Yassin Jaber and MPs George Adwan, Ali Hassan Khalil, Ghassan Hasbani, Alan Aoun, Farid Al-Bustani, Ghada Ayoub, Jamil Al-Sayyed, Paula Yacoubian, Ayoub Hmeid, Adnan Traboulsi, Marwan Hamadeh, Melhem Khalaf, Taha Naji, Bilal Abdullah, Hassan Fadlallah, Faisal Al-Sayegh, Samine Shreih, Salim Aoun, Cesar Abi Khalil, Yassin Yassin, Qassem Hashem, and Ibrahim Mneimneh. Also present were Central Bank Governor Karim Said, Justice Ministry representative Judge Elie Maalouf, Beirut Bar Association President Imad Martinos, and the Justice Palace Commissioner at the Bar, Elie Hashash.

Following the session, Kanaan stated that the committee concluded the general debate on the bank reform law and proceeded to discuss Articles 3 and 13, which had raised issues. The Central Bank had expressed reservations regarding these articles, citing the bank’s independence and its supervisory role over monetary policy and the financial system.

Kanaan added that extensive discussions took place concerning the amendments proposed by the Central Bank. The government, represented by the Finance Minister, expressed no objection to the amendments as they fall within the framework of the Money and Credit Law. The governor requested in a written letter to include the phrase “subject to the provisions of Article 70 of the Money and Credit Law” in Article 3 of the bank reform law. He also sought to prevent any confusion between the Central Council’s authorities and those of the Higher Banking Commission, which is exclusively responsible for bank reform and restructuring. Clarifying this distinction in legislation is crucial to avoid overlaps among institutions, councils, administrations, bodies, and ministries, and to prevent exploitation of role conflicts to obstruct reform.

Kanaan noted that there is parliamentary consensus on this matter, including the government. He reported that a meeting was held at the government palace attended by the Prime Minister, the Economy Minister, the Finance Minister, and the Central Bank Governor, who agreed on amending Articles 3 and 13 to remove ambiguity concerning the Central Bank’s independence and the role of the Central Council. However, approval from the International Monetary Fund (IMF) is required, and discussions between the government and IMF on the new amendments—which are being proposed for the third time by the government—are ongoing as the law moves toward ratification.

He recalled that the bank reform law was issued on August 14, 2025, with unanimous approval. The night before the general assembly, 20 additional amendments were submitted, most of which were incorporated during the assembly. New amendments were sent in February but later withdrawn by the government, followed by further amendments in June. Thus, the parliamentary body is not delaying the approval process; rather, the continuous submission of new amendments by the government in coordination with the IMF causes the delay.

Kanaan emphasized that the Parliament seeks to reach an agreement with the IMF and aims to eliminate any ambiguity in the relationship with the Fund and in the law’s implementation. The goal is to enact a law that can be applied effectively. Those advocating reform must present a law that is practical and implementable, not merely theoretical or unworkable.

Regarding Article 13, which had caused controversy due to the inclusion of the term “circulars,” Kanaan explained that it is well known that circulars are issued by the Central Council. The Central Bank clarified that it may have the right to recommend or propose but not to issue circulars, and that the use of the term “circulars” might be incorrect in this context. Therefore, some clarifying amendments may be introduced if the committee agrees, or the law’s provisions may proceed as presented by the government.

He added that the discussions were serious and took the necessary time among those involved, which is healthy since the entire law is being reviewed even if not all articles are discussed in detail. All aspects of the government-submitted draft law are being examined to some extent. To avoid further delays, a committee session will be called on Tuesday to continue the discussion on the law’s articles and to vote on them, fulfilling the committee’s duties as required.

Kanaan also noted that part of the reason for adjourning the session was the lack of quorum. He urged fellow MPs to dedicate more time to this important matter to complete their responsibilities. He clarified that this was merely a reminder, as he is aware that no MP is neglecting their duties. He called for ensuring a permanent quorum on Tuesday to resolve all issues and proceed to a general assembly session to present the law.

In response to a question about linking bank reform to the deficit law, Kanaan stated that the draft law submitted to the committee is under government review for some of its provisions. A governmental committee, along with the Central Bank and the IMF, is working on this. The objective is a law that recovers deposits rather than cancels them. Accordingly, the government is reconsidering certain clauses to achieve the intended outcome of the law. He stressed that confidence is not only obtained externally from the IMF but also internally through Lebanese depositors and investors, who will not invest in Lebanon unless they feel secure. It is widely recognized that current relations with banks are seasonal and limited, with no trust in depositing funds due to the absence of a solution for deposits. Therefore, the government must consider that internal trust and depositor confidence are essential, as they alone can restore the banking sector and rebuild trust.