1. Which entities participate in the Polish deposit guarantee scheme?
5. Whose deposits are not covered?
7. Are funds paid as contributions and interest guaranteed?
8. Are the funds held in accounts maintained in a currency other than PLN covered by the guarantee?
9. Is the interest on deposits also covered by the BFG guarantee?
11. Are joint accounts covered by the BFG guarantee?
12. Who is entitled to guaranteed funds in the event of a trust account?
13. Does a married couple’s joint conjugal ownership affect the coverage level of the guarantee?
14. Can a minor be a depositor?
15. Who is entitled to guaranteed funds in the event of an investment firm account?
17. What qualifies as the day of fulfilment of the guarantee condition?
18. What exchange rate is applied in calculating the PLN value of the coverage limit of EUR 100,000?
20. How are depositors informed that the reimbursement of guaranteed deposits has commenced?
21. How can the depositor collect their due guaranteed deposits?
22. Is it possible to collect guaranteed deposits after the reimbursement period is over?
23. What does the guaranteed deposit payout procedure look like?
24. What happens to funds in excess of the amount guaranteed by BFG? Can they be recovered?
25. Within what timeframe can guaranteed deposits be collected?
1. Which entities participate in the Polish deposit guarantee scheme?
The Bank Guarantee Fund (BFG) guarantee scheme covers deposits held at
- all domestic banks, i.e. those with their registered head offices located within the territory of the Republic of Poland, irrespective of the form of their operations (joint stock company, co-operative bank), with the exception of Bank Gospodarstwa Krajowego (state-run bank),
- all cooperative savings and credit unions.
- branches of foreign banks (i.e. bank branches established in the territory of a non-EU State) to the extent that the deposit guarantee system in the country does not guarantee the payment of funds at least to the extent and in the amount specified in the Act on the Bank Guarantee Fund, Deposit Guarantee Scheme and Resolution.
2. Are banks whose head offices are located outside the territory of the Republic of Poland covered by the BFG guarantee?
In compliance with European Union regulations, branches of banks whose registered head offices are located in other EU member states (these banks are called credit institutions), though they operate within the territory of the Republic of Poland are included in the deposit guarantee scheme of the home country (the country in which the registered head office is located). Since 31 December 2010, the level of coverage in all the countries being EU Member States has amounted to EUR 100,000 (or the equivalent thereof in a domestic currency).
3. Are funds deposited in entities that hold no authorisation of the Polish Financial Supervision Authority to perform banking activity covered by the deposit guarantee system?
Funds deposited at the entities indicated by the Polish Financial Supervision Authority as the ones that hold no authorisation to perform banking transactions are not covered by the guarantee system.
A list of such entities is posted on the website of the Polish Financial Supervision Authority in the section: Public warnings of the Polish Financial Supervision Authority.
A person or entity entitled to guaranteed funds is a depositor.
In the event of a bank or a branch of a foreign bank the following are depositors:
- natural persons,
- legal persons,
- organisational units without legal personality but possessing legal capacity,
- school savings associations,
- employee assistance-and-loan associations.
In the event of a cooperative savings and credit union, the following are depositors:
- natural persons,
- NGOs within the meaning of the Act on Public Service Activity and Volunteering,
- organisational units of a church or religious organisation which are legal persons,
- cooperatives,
- trade unions,
- tenants’ communities,
The Act on the Bank Guarantee Fund, Deposit Guarantee Scheme and Resolution (Article 22 paragraph 1) also stipulates that not all credit union account holders at banks and credit unions are entitled to depositor status (see: Question 5).
5. Whose deposits are not covered?
In the event of banks and cooperative savings and credit unions, the BFG guarantee does not cover funds deposited by:
- the State Treasury,
- Narodowy Bank Polski (National Bank of Poland),
- banks, foreign banks and credit institutions within the meaning of the Act – Banking Law
- cooperative savings and credit unions and the National Association of Cooperative Savings and Credit Unions,
- the Bank Guarantee Fund,
- financial institutions within the meaning of Regulation 575/2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012,
- investment firms within the meaning of Regulation 575/2013 and ‧recognised third-country investment firms referred to in Article 4 paragraph 1 point 25 of the said Regulation,
- persons and bodies unidentified by a bank or a cooperative savings and credit union, as the case may be,
- domestic and foreign insurance undertakings, as well as domestic and foreign insurance and reinsurance undertakings referred to in the Act on the Business of Insurance and Reinsurance,
- investment funds, investment fund companies, foreign funds, managing companies and branches of investment companies referred to in the Act on Investment Funds and Management of Alternative Investment Funds,
- open pension funds, employee pension funds, general pension societies and employee pension societies referred to in the Act on the Organisation and Operation of Pension Funds
- local government units,
- public authorities of any other Member State or of a third country, in particular, central governments, regional and local government units of these countries.
In the event of the bank, the deposit guarantee scheme protects deposits held by the depositor in all types of registered bank accounts that it maintains, whether denominated in PLN or in foreign currencies. The guarantee scheme also covers:
- other depositor claims arising under the bank account agreements;
- depositor claims arising under the bank financial settlements pursued by the bank;
- depositor claims arising under bank of bank securities issued prior to 2 July 2014.
The deposit guarantee scheme also covers claims against the bank in respect of a record in the contemplation of demise and funeral costs provisions in respect of a bank account holder, provided that such claims come due prior to the date on which the operations of the bank are suspended.
In the event of the credit union, the deposit guarantee scheme covers deposits held by the depositor at the credit union in all types of registered bank accounts that it maintains, whether denominated in PLN or in foreign currencies. The guarantee scheme also covers:
- other depositor claims arising under the account agreements;
- depositor claims arising under the bank financial settlements pursued by the credit union.
The deposit guarantee scheme also covers claims against the credit union in respect of a record in the contemplation of demise and funeral costs provisions in respect of a credit union member, provided that such claims come due prior to the date on which the operations of the credit union are suspended.
Please note that in the event of certain instruments available to bank and credit union customers, the banks and credit unions merely acts as an intermediaries in their sale (e.g. units in investment funds or insurance products). Accordingly, these products are not covered by the guarantee scheme. Both the banks and credit union also offer hybrid products, e.g. a term deposit combined with investment fund units – and in such cases only the deposit component of the product is covered by the guarantee.
7. Are funds paid as contributions and interest guaranteed?
No, the funds paid to the cooperative bank or the cooperative savings and credit union by way of shares, the entry fee or membership contributions are not covered by the guarantees.
8. Are the funds held in accounts maintained in a currency other than PLN covered by the guarantee?
The guarantee scheme covers both the funds held in PLN and in foreign currency. Irrespective of the account currency, the disbursement of guaranteed funds follows in PLN.
9. Is the interest on deposits covered by the BFG guarantee?
The amount guaranteed by the BFG, up to the statutory coverage limit, encompasses funds held in accounts as per the account balances on the date of fulfilment of the guarantee condition, plus interest due accrued up to the day of fulfilment of the guarantee condition, as per the interest rate specified in the bank account agreement, irrespective of their maturity.
10. Does the guarantee limit apply to one account or to all accounts of a depositor in the respective bank or credit union?
The maximum amount that can be disbursed to a single depositor at the respective bank or credit union on account of the BFG guarantee is the PLN equivalent of EUR 100,000, irrespective of the number of accounts held by the depositor with that bank or credit union. The sum of all receivables due from the bank or credit union (the sum of all deposits held in all of the depositor’s name-registered accounts plus other guaranteed receivables) is the basis for calculating the amount to be disbursed by the Fund.
11. Are joint accounts covered by the BFG guarantee?
Joint accounts are also covered by the BFG guarantee. The guaranteed amount in such case is calculated separately for each joint account holder. The amount due to a depositor from a joint account is calculated in the following way: the funds in the account are divided among all the joint account holders in accordance with the provisions of the account agreement, or if there are no such provisions, equally among all the joint account holders, and then the amount guaranteed for each portion is calculated.
12. Who is entitled to guaranteed funds in the case of a trust account?
In the case of a trust account (e.g. housing trust account), each Settlor (Trustor) is the Depositor within the limits of its share in the amount held in the account. The Trustee is the Depositor within the limits of the remaining amount. Please note that the sum of all the Depositor claims against the bank or credit union is the basis for the calculation of the amount due from the Fund to the Depositor (see: Question 10).
13. Does a married couple’s joint conjugal ownership affect the coverage level of the guarantee?
No. Each spouse is classified as a separate depositor irrespective of their mutual property relationship.
14. Can a minor be a depositor?
Yes. If a minor holds a registered account at a bank or credit union or possesses any receivables against a bank or credit union that are subject to deposit guarantee coverage, he or she is a depositor as per the provisions of the Act on the Bank Guarantee Fund, Deposit Guarantee Scheme and Resolution of 10 June 2016 and is entitled to coverage.
15. Who is entitled to guaranteed funds in the event of a trust account?
Where the bank maintains the investment firm account which holds funds deposited by the firm customers in the context of rendering brokerage services by the firm, each of those customers is the Depositor within the limits of its share in the amount held in the account. Please note that the sum of all depositor claims against the bank is the basis of calculation of the amount due from the Fund to the Depositor (see: Question 10).
16. Are all deposit-type products that are available at the respective bank or credit union covered by the BFG guarantee?
When purchasing deposit-type product in a bank or credit union, customers increasingly face a wide variety of options with respect to such products. Whether the respective product is covered by the BFG guarantee is not always easy to determine. In practice, in order to make this determination, two factors need to be taken into consideration:
- first of all, the identity of the other party to an agreement that the customer is entering into. Simply because a customer concludes an agreement on location at a bank or credit union does not mean that the bank or credit union is party to the agreement. Often these entities act as intermediaries. If that is the case, when a customer acquires a certain instrument in that bank or credit union, he or she is actually entering into a legal agreement with another financial entity, e.g. an insurance company. Accordingly, it is crucial to identify the other party to the agreement. If the other party is not a bank or a credit union, then the deposit-type product is not covered by the BFG guarantee;
- secondly, whether the customer is entering into a bank account agreement – in the event of a bank -, or an account agreement – in the event of a cooperative savings and credit union.
That is why if in doubt, the customer should enquire with a bank/credit union employee about the category of the agreement. In practice, if the instrument in question is a “standard” deposit-type instrument, a term deposit or a current account, there is no cause for concern as all these are covered by the BFG guarantee.
17. What qualifies as the day of fulfilment of the guarantee condition?
The Bank Guarantee Fund assumes liabilities towards the depositor on the day of fulfilment of the guarantee condition, so – in the case of a domestic bank or credit union – the day referred to in a decision of the Polish Financial Supervision Authority as the day of suspension of a bank’s or credit union’s operations and, respectively, appointment of receivership or receiver, unless it had been appointed previously, as well as filing a petition to declare bankruptcy at a relevant court, or on a day where the BFG files a petition to declare bankruptcy at a relevant court in the context of the resolution and recovery proceedings pending with reference to the bank or credit union.
18. What exchange rate is applied in calculating the PLN value of the coverage limit of EUR 100,000?
The PLN equivalent of EUR is calculated on the basis of the average exchange rate announced by the National Bank of Poland on the day of fulfilment of the guarantee condition (i.e. on the day referred to in the decision of the Polish Financial Supervision Authority as the day of suspension of a bank’s or credit union’s operations and, respectively, appointment of reveivership or receiver, as well as filing a petition to declare bankruptcy at a relevant court, or on a day where the BFG files a petition to declare bankruptcy at a relevant court in the context of the resolution and recovery proceedings pending with reference to the bank or credit union.
19. When does the Polish Financial Supervision Authority take the decision to suspend the operations of a bank or credit union?
The Polish Financial Supervision Authority takes the decision to suspend bank’s operations if:
- the assets of the bank are insufficient to cover its liabilities – according to a balance sheet statement compiled at the end of the reporting period
or
- for the reasons directly related to the financial standing of the bank, it fails to meet its liabilities with respect to depositors within the scope of deposit guarantee limits.
The Polish Financial Supervision Authority takes the decision to suspend the bank’s operations and appoint receivership, unless it had already been appointed beforehand, and at the same time the Polish Financial Supervision Authority, and at that time:
- decides on a takeover of the failed bank by another bank, with the consent of the acquiring bank,
or
- files a petition to declare bankruptcy of a bank at a relevant court. In the latter case, the fulfilment of the guarantee condition and disbursement of guaranteed funds takes place.
In the case of a cooperative savings and credit union, the Polish Financial Supervision Authority may also decide to suspend the operations of a credit union if, according to a balance sheet compiled at the end of the reporting period, the assets of the credit union are insufficient to meet its liabilities. The Polish Financial Supervision Authority may also take a decision to suspend operations of a credit union if for reasons directly associated with its financial standing it fails to meet its liabilities to depositors regarding covered deposits. In both cases, fulfilment of the guarantee condition takes place.
20. How are depositors informed that the reimbursement of guaranteed deposits has commenced?
The procedure and dates of the reimbursement of guaranteed deposits are made publicly known by the Bank Guarantee Fund by way of announcement in a newspaper of countrywide circulation, among other channels. This information will also be posted on the BFG website.
21. How can depositors collect their due guaranteed deposits?
The due receivables can be collected in cash or by authorising an electronic funds transfer, at a time and place determined by the Fund. After that, guaranteed deposits can be collected at the Bank Guarantee Fund office for a period of 5 years after the day of fulfilment of the guarantee condition, after first having submitted the requisite guaranteed deposit reimbursement application form.
22. Is it possible to collect guaranteed deposits after the reimbursement period is over?
Yes. After the conclusion of the reimbursement period, a guaranteed deposit reimbursement application form can be submitted to the Bank Guarantee Fund (for a period of 5 years after the day of fulfilment of the guarantee condition).
23. What does the guaranteed deposit reimbursement process look like?
The guaranteed deposit reimbursement process is as follows:
- The receivership of a bank or receiver of a credit union compile a list of depositors. The depositor list is submitted without delay but no later than within 3 working days from the day of fulfilment of the guarantee condition to the Management Board of the Bank Guarantee Fund.
- The Fund Management Board monitors, on an ongoing basis, the compilation of the depositor list by the receivership of a bank or the credit union receiver;
- The receivership or receiver or entity that has been contracted by BFG to carry out the reimbursement of guaranteed deposits, reimburses guaranteed deposits on behalf of the Fund and on its account. A decision in this respect is made by the Fund Management Board;
- The Fund Management Board conveys a reimbursement list, which contains data required to carry out disbursements, to the receivership or receiver or entity that has been contracted by BFG to carry out the reimbursement of guaranteed deposits;
- The Fund Management Board passes a resolution, stipulating the following: the identity of the entity that shall carry out the reimbursement of guaranteed deposits, the procedure of the reimbursement and the amount constituting the sum of guaranteed deposits that have been allocated for reimbursement of guaranteed deposits. This resolution is made publicly known by the Fund, by way of announcement in a newspaper of countrywide circulation;
- The Fund conveys guaranteed deposits funds for the reimbursement of depositors of a bank or credit union with respect to which the guarantee condition has been fulfilled to the receivership or receiver or entity that has been contracted to carry out the reimbursement.
The receivership or receiver or entity contracted by BFG to carry out the reimbursement of guaranteed deposits commences the execution of the reimbursement in accordance with the resolution passed by the Fund Management Board, within 7 working days from the day of fulfilment of the guarantee condition.
24. What happens to funds in excess of the amount guaranteed by BFG? Can they be recovered?
The funds in excess of the BFG coverage limit constitute depositors’ claims against a bank or credit union. Following a declaration of bankruptcy, depositors are entitled to pursue their claims under the general rules of the Bankruptcy and Reorganisation Law. Those funds constitute depositors’ claims against the bankruptcy estate of a bank or credit union. The depositors should then submit their claims to a judge-commissioner within the timeframe referred to in the court decision to declare bankruptcy of the relevant bank or credit union.
25. Within what timeframe can guaranteed deposits be collected?
Once the receivership of a bank or the receiver of a credit union or the entity contracted by the Fund to reimburse guaranteed deposits has concluded the reimbursement, guaranteed deposits can be collected at the office of the Fund within a period of 5 years from the day on which the fulfilment of the guarantee condition occurred (requisite documents can be submitted to the Fund by correspondence). After that time, claims pursuant to the deposit guarantee expire by limitation.
