The main objective of the NDGI is to protect smaller depositors.
The guarantee covers resident and non-resident deposit accounts in all currencies, except for foreign currencies deposits held in branches abroad as dictated by Law no. 110, dated 7/11/1991. Deposits in foreign currencies started to be covered as of end 1991, and the coverage is meant to last till end 1998. The guarantee is paid per depositor and per bank ( the bank and its branches are considered as one institution ) and not per each account taken individually. The Law no. 28/67 denies the privilege of guaranteed accounts to the bank president, its Board of Directors, auditors, as well as their spouses and relatives.
The annual premium is paid on credit accounts excluding own funds, payment orders, interbank operations and reconciliation banks accounts. According to decree no.29 of April 1, 1975 which established a free banking zone, banks do not pay a premium on non-resident deposit accounts in foreign currencies held at a bank’s head office in Lebanon. The annual premium is to be specified at the beginning of every year by a decree from the Council of Ministers upon the Minister of Finance proposal and the NDGI consultation.

The NDGI was established by Law no. 28/67 of May 9th, 1967 as a cooperative joint stock company, with banks participating in half of the capital and the government in the other half. The impetus for the establishment of a body to guarantee bank deposits came with the Intra crisis in 1966.
Initially, only deposits in Lebanese pounds were guaranteed and that was up to LL 30,000 per depositor in each bank ( equivalent to USD 10,000 at the time). The guaranteed amount was then raised to LL 250,000 ( equivalent to USD 2,874 ) in 1986, then to LL 1 million ( equivalent to USD 1,887 ) in 1988 and to LL 5 million (equivalent to USD 5,688 ) in 1991, the level at which it remains today and which is equivalent to USD 3,235. Starting end 1991, deposits in foreign currencies held at banks existing and operating in Lebanon, started to be covered up to LL 5 million. This coverage which was meant to last for two years only, was extended till end 1998.
According to Article 15 of Law no. 28/67, banks existing and operating in Lebanon have to pay the NDGI an annual premium not exceeding 0.2% of total deposits in the first three years of the Institution’s formation and then 0.15% in the following years. The guaranteed amount today is LL 5 million for LL deposits and foreign currency deposits . Since 1996, the premium paid on banks credit accounts has been reduced from 0.15% to 0.05% with the return of financial stability to the Lebanese banking sector.