- 1. Which entities participate in the Polish deposit guarantee scheme?
- 2. Are banks whose head offices are outside the territory of the Republic of Poland covered by the BFG guarantee?
- 1. Which entities participate in the Polish deposit guarantee scheme?
- 2. Are banks whose head offices are outside the territory of the Republic of Poland covered by the BFG guarantee?
- 3. Are the funds deposited in entities that do not have the authorisation of the Polish Financial Supervision Authority to perform banking activity covered by the deposit guarantee system?
- 4.Who is a depositor?
- 5.Whose deposits are not covered?
- 6. What is guaranteed?
- 7. Is the interest on deposits also covered by the BFG guarantee?
- 8. Does the guarantee limit apply to one account, or to all accounts of a depositor in a given bank or credit union?
- 9. Are joint accounts covered by the BFG guarantee?
- 10. Does a married couple’s joint conjugal ownership affect the coverage level of the guarantee?
- 11. Can a minor be a depositor?
- 12. Are all deposit-type instruments that are available at a given bank or credit union covered by the BFG guarantee?
- 13. What qualifies as the day of fulfilment of the guarantee condition?
- 14. What exchange rate is applied in calculating the PLN value of the coverage limit of EUR 100 000?
- 15. When does the Polish Financial Supervision Authority take the decision to suspend the operations of a bank or credit union?
- 16. How are depositors informed that the reimbursement of guaranteed deposits has commenced?
- 17. How can depositors collect their due guaranteed deposits?
- 18. Is it possible to collect guaranteed deposits after the reimbursement period has ended?
- 19. What does the guaranteed deposit payout procedure look like?
- 20. What happens to funds in excess of the amount guaranteed by BFG? Can they be recovered?
- 21. Within what timeframe can guaranteed deposits be collected?
- all domestic banks, i.e. those with their registered head offices within the territory of the Republic of Poland, regardless of the form of their operations (joint stock company, co-operative bank, or state bank),
- all cooperative savings and credit unions.
- up
- in case of banks (Art. 2 subpara. 1) a depositor is a natural person, a legal person, or an organisational unit without legal personality but possessing legal capacity, a school savings association and an employee assistance-and-loan association that is party to a bank account agreement or which has claims against a bank that is covered by the obligatory deposit guarantee system, as well as persons referred to in Art. 55 para. 1 and Art. 56 para. 1 of the Banking Law Act (persons with claims against a bank pursuant to a bank provision in the event of death and as a result of funeral costs incurred by the account holder), subject to Art. 26q, provided that the claim against the bank came due prior to the day of fulfilment of the guarantee condition. The Act on BFG (Art. 2 subpara. 1 pts. a-k) also stipulates that not all bank account holders and those with claims against the bank due to other banking operations are entitled to depositor status.
- in case of cooperative savings and credit unions (Art. 38l subpara. 1) a depositor is a natural person, a non-governmental organisation as defined in Art. 3 para. 2 of the Act on Public Service Activity and Volunteering (Journal of Laws of 2010, No. 234, item 1536, as amended), a church or religious organisation with legal person status, a cooperative, labour union or condominium, which is party to an account agreement or which due to financial settlements conducted by a credit union has claims against a credit union that is covered by the obligatory deposit guarantee system, as well as persons referred to in Art. 14 para. 1 of the Act of 5 November 2009 on cooperative savings and credit unions (persons with claims against a credit union arising from an in the event of death provision and a funeral costs of a credit union member provision), subject to Art. 38ze, provided that the claim against the credit union came due prior to the day of fulfilment of the guarantee condition. The Act on the Bank Guarantee Fund (Art. 38l subpara.1) also stipulates that not all credit union account holders and those with claims against the credit union due to financial settlements are entitled to depositor status.
- 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. Until 28 May 2014, the deadline for a credit union receiver to compile a depositor list is 10 working days;
- 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 necessary 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 to the receivership or receiver or entity that has been contracted to carry out the reimbursement of guaranteed deposits funds for the reimbursement of depositors of a bank or credit union with respect to which the guarantee condition has been fulfilled.
1. Which entities participate in the Polish deposit guarantee scheme?
The Bank Guarantee Fund (BFG) guarantee scheme covers deposits held in
2. Are banks whose head offices are 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, though they operate on Polish territory, belong to the deposit guarantee scheme of the home country (the country in which the registered head office is located). In cases where the level of coverage in these countries is lower than that stipulated in the Act on the Bank Guarantee Fund, such branches can also join the Polish guarantee scheme on a voluntary basis in addition to belonging to the guarantee scheme of the home country.
3. Are funds deposited in entities that do not have the authorisation of the Polish Financial Supervision Authority to perform banking activity covered by the deposit guarantee system?
Funds deposited in entities indicated by the Polish Financial Supervision Authority as ones not having the authorisation to perform banking activity are not covered by the guarantee system.
4. Who is a depositor?
Pursuant to the Act on the Bank Guarantee Fund:
5. Whose deposits are not covered?
In case of banks, the BFG guarantee does not cover funds deposited by:
1. the State Treasury,
2. domestic banks, foreign banks and credit institutions operating in accordance with the Banking Law,
3. companies operating exchanges, out of exchange markets or alternative trading systems, investment companies, foreign investment companies, foreign legal persons conducting brokerage activity as well as the National Depository for Securities under the Trading in Financial Instruments Act,
4. national and foreign insurance institutions, national and foreign insurance companies operating in accordance with the Insurance Activity Act as well as the Insurance Guarantee Fund operating in accordance with the Act on compulsory insurance, the Insurance Guarantee Fund and the Polish Motor Insurers’ Bureau of Motor Insurers,
5. investment funds, investment fund companies, foreign funds, managing companies, branches of investment companies operating in accordance with the Investment Funds Act,
6. open pension funds, employee pension funds, general pension societies, employee pension societies operating in accordance with the Act on the Organisation and Operation of Pension Funds,
7. cooperative savings and credit unions, the National Cooperative Savings and Credit Union operating in accordance with the Act on Cooperative Savings and Credit Unions,
8. persons holding on the day of fulfilment of the guarantee condition a block of at least 5 per cent of the total number of votes at a general assembly or shares in the share capital, as well as persons being in relation to them parent undertakings or subsidiary undertakings, under the circumstance that these persons performed their functions on the day of fulfilment of the guarantee condition or within the period of the current financial (accounting) year or the financial (accounting) year preceding the day of fulfilment of the guarantee condition,
9. members of a domestic bank’s management board and supervisory board and persons in the position of directors and deputy directors in the bank’s head office as well as directors and deputy directors of branches of this bank, under the circumstance that these persons performed their functions on the day of fulfilment of the guarantee condition or within the period of the current financial (accounting) year or the financial (accounting) year preceding the day of fulfilment of the guarantee condition,
10. directors and deputy directors of a foreign bank’s branch or a credit institution’s branch with respect to which the guarantee condition has been fulfilled, under the circumstances that these persons performed their functions on the day of fulfilment of the guarantee condition or within the period of the current financial (accounting) year or the financial (accounting) year preceding the day of fulfilment of the guarantee condition.
In case of credit unions, the BFG guarantee does not cover funds deposited by:
1. cooperative savings and credit unions,
2. the National Association of Cooperative Savings and Credit Unions,
3. members of a credit union’s management board and supervisory board and employees directly subordinated to members of the management board or persons in the position of managers or directors of the credit union and their deputies, under the circumstance that these persons performed their functions on the day of fulfilment of the guarantee condition or within the period of the current financial year or the financial year preceding the day of fulfilment of the guarantee condition.
6. What is guaranteed?
In case of banks:
The deposit guarantee scheme protects deposits in all types of registered bank accounts, whether denominated in PLN or in foreign currencies. Other claims resulting from banking operations and confirmed by registered bank-issued documents (e.g. amounts due from electronic funds transfer orders or issues of bank securities) are also covered by the guarantee. A complete list of banking operations that are covered can be found in Article 5 paras. 1 and 2 of the Banking Law Act. The guarantee scheme also covers claims against a bank due to in the event of the death provisions and funeral costs provisions in respect of an account holder, provided that such claims come due prior to the date on which the operations of the bank are suspended.
Please note that in the case of certain instruments available to bank customers, the bank merely acts as an intermediary in their sale (e.g. units in investment funds or insurance products) and so they are not covered by the guarantee scheme. Banks also offer hybrid products, e.g. a bank term deposit combined with investment fund units – and in such cases only the deposit component of the product is covered by the guarantee.
In case of credit unions:
The deposit guarantee scheme protects deposits in all types of credit union accounts, whether denominated in PLN or in foreign currencies. Other claims resulting from financial settlements carried out by a credit union are also covered by guarantees. The guarantee scheme also covers claims against a credit union due to in the event of death provisions 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.
7. Is the interest on deposits covered by the BFG guarantee?
The guaranteed amount, up to the statutory coverage limit, encompasses funds held in accounts in accordance with the account balances as on the date of fulfilment of the guarantee condition, plus interest due accrued up to the day of fulfilment of the guarantee condition, in accordance with an interest rate specified in the bank account agreement, regardless of the interest accrual date.
8. Does the guarantee limit apply to one account or to all accounts of a depositor in a given bank or credit union?
The maximum amount that can be disbursed to a single depositor at a given bank or credit union on account of the BFG guarantee is the equivalent of EUR 100 000, irrespective of the number of accounts held by the depositor in that bank or credit union. The basis for calculating the amount to be disbursed by the Fund is the sum of all receivables due from the bank or credit union (the sum of all deposits held in all of the depositor’s accounts plus other guaranteed receivables).
9. 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.
10. Does a married couple’s joint conjugal ownership affect the coverage level of the guarantee?
No. Each spouse is treated as a separate depositor regardless of their mutual property relationship.
11. 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 BFG and is entitled to coverage.
12. Are all deposit-type instruments that are available at a given bank or credit union covered by the BFG guarantee?
When purchasing deposit-type instruments in a bank or credit union, customers increasingly face a wide variety of options with respect to such products. Whether a given instrument 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 second party to an agreement that the client is entering into. Simply because a client signs 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. Therefore it is crucial to identify the second party to the contract. If the second party is not a bank, then the deposit-type instrument is not covered by the BFG guarantee.
If the second party to the agreement is a bank, then it must be determined what instrument is the subject of the agreement and what is the legal basis for the “issue” of this instrument, in order to determine whether the claim the customer possesses on account of entering into this agreement is a claim arising from banking activity. This determination may require broader knowledge of legal and financial matters. That is why if in doubt, the customer should ask a bank representative whether the instrument in question has been issued on the basis of the Banking Law Act or on the basis of other regulations. If it has been issued on the basis of the Banking Law Act, then what needs to be determined is whether this “issue” qualifies as a banking activity according to the Banking Law Act. If yes, then this instrument is covered by the BFG guarantee. A list of what qualifies as a banking activity can be found in Art. 5, paras. 1 and 2 of the Banking Law Act. 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. In the banking products market, the most common forms of complex deposit-type instruments are: a deposit-fund hybrid, an insurance policy-deposit hybrid and deposit certificates.
If a credit union is the second party to the agreement, then the BFG guarantee covers deposits in accounts held at that credit union as well as claims, provided that their legal basis is the execution of financial settlements by the credit union.
13. What qualifies as the day of fulfilment of the guarantee condition?
The Bank Guarantee Fund assumes liabilities towards depositors on the day of fulfilment of the guarantee condition, so – in case of a domestic bank or credit union – the day indicated 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 a receivership or receiver, provided that one had been appointed previously, as well as filing a petition to declare bankruptcy at a relevant court.
14. What exchange rate is applied in calculating the PLN value of the coverage limit of 100 000 EUR?
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 indicated 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 a receivership or receiver, provided that one had been appointed previously, as well as filing a petition to declare bankruptcy at a relevant court).
15. 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 a bank’s operations if:
1. 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
2. due to 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.
At that time, the Polish Financial Supervision Authority takes the decision to suspend the bank’s operations and appoint a receivership, unless one had already been appointed beforehand, and at the same time the Polish Financial Supervision Authority:
1. decides on a takeover of the failed bank by another bank, with the consent of the acquiring bank,
or
2. files a bankruptcy petition at a relevant court. In this case, the fulfilment of the guarantee condition takes place.
In case of cooperative savings and credit unions, the Polish Financial Supervision Authority takes 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. 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. In both cases, fulfilment of the guarantee condition takes place.
16. 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. Such information is also posted on the BFG website.
17. 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.
18. Is it possible to collect guaranteed deposits after the reimbursement period has ended?
Yes. After the conclusion of the reimbursement period, a guaranteed deposit reimbursement application form can be submitted to the Bank Guarantee Fund.
19. What does the guaranteed deposit reimbursement process look like?
The guaranteed deposit reimbursement process is as follows:
The receivership or receiver or entity contracted by BFG to carry out the reimbursement of guaranteed deposits executes the reimbursement in accordance with the resolution passed by the Fund Management Board, within 20 working days from the day of fulfilment of the guarantee condition.
The procedure of reimbursing guaranteed deposits should be completed within 20 working days from the day of fulfilment of the guarantee condition. Should circumstances occur that make it impossible to disburse the guaranteed funds within that timeframe, the Polish Financial Supervision Authority may, at the request of the Fund Management Board, extend the disbursement period, but by no more than 10 working days counted from the date of expiry of the 20 working day deadline.
20. What happens to funds in excess of the amount guaranteed by BFG? Can they be recovered?
Funds in excess of the BFG coverage limit constitute depositors’ claims against a bank or credit union. After declaration of bankruptcy, depositors are entitled to pursue their claims under the general rules of Bankruptcy and Reorganization Law. Such funds constitute depositors’ claims against the bankruptcy estate of a bank or credit union. If an agreement is in place between creditors and the bankrupt bank, these claims will be settled pursuant to the provisions of said agreement. If no such agreement is in place and the enterprise of the bankrupt bank or credit union is sold in its entirety, the purchaser assumes the liabilities towards customers. If the bank is not sold in its entirety, those amounts not covered by the BFG guarantee can be recovered as part of the distribution of the bankruptcy estate of the bank, provided there remain sufficient assets. Depositors should then submit their claims to a judge-commissioner within the timeframe indicated in the court decision to declare bankruptcy of the given bank or credit union.
21. Within what timeframe can guaranteed deposits be collected?
After the receivership of a bank or the receiver of a credit union or the entity contracted by the Fund to reimburse guaranteed deposits concludes 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.
