A deposit is funds, placed in the bank accounts of the customer, which the bank must repay under the legal or contractual provisions.
2. In which cases law protects rights of Bank’s customers for refund of deposits placed in the bank?
Deposit Guarantee Law (hereinafter – the Law) protects rights of bank’s customers for refund of deposits in cases, when the bank is unable to refund deposits to customers, i.e.:
If the court has made judgement about insolvency of the bank;
If bank’s credit institution operating licence has been revoked;
In other cases, when the Financial and Capital Market Commission (hereinafter – the Commission) has adopted the decision that the bank is unable refund to customers their deposits placed.
3. What is a Deposit Guarantee Fund?
The Deposit Guarantee Fund is special money fund, in which means have been accumulated to refund deposits to customers in cases, when the bank is unable to do it, i.e.:
If the court has made judgement about insolvency of the bank;
If the bank’s credit institution operating licence has been revoked;
In other cases, when the Commission has adopted the decision that the bank is unable refund to customers their deposits placed.
The Deposit Guarantee Fund has been formed from following payments:
Payments made by banks and other deposit takers;
A one-time contribution from the state budget;
A one-time contribution made by the Bank of Latvia.
Accumulation of means in the Deposit Guarantee Fund has been ensured by the Commission.
4. What is the maximum amount the customer may claim?
The maximum amount the customer may claim for deposits of all kinds which are placed in one bank may not exceed EUR 100 000. This amount has been converted to Latvian lats, according to the exchange rate set by the Bank of Latvia on the day, when the bank is unable to refund deposits to its customers, i.e.:
On the day, when court judgement about insolvency of the bank became effective or
On the day, when ruling of the Commission about revocation of bank’s licence became effective or
On the day, when ruling of the Commission about inability of bank to refund deposits to its customers became effective.
Guaranteed compensation has been paid in Latvian lats.
If the deposit is placed in the bank in foreign currency, then deposit amount has been converted to Latvian lats, according to the exchange rate set by the Bank of Latvia on the day, when the bank is unable to refund deposits to its customers, i.e.:
On the day, when court judgement about insolvency of the bank became effective or
On the day, when ruling of the Commission about revocation of bank’s licence became effective or
On the day, when ruling of the Commission about inability of bank to refund deposits to its customers became effective
5. How is the guaranteed compensation paid?
The Commission:
1. organises allowance of funds to bank’s customers from the Deposit-guarantee fund;
2. decides about procedure, time and date of allowance of guaranteed compensation;
3. publishes information about procedure, time and date of allowance of guaranteed compensation in the newspaper “Latvijas Vēstnesis”;
4. places information about procedure, time and date of allowance of guaranteed compensation on the home page of the Commission in the Internet www.fktk.lv;
5. ensures allowance of guaranteed compensation not later than in 20 days from the day, when:
The court has made judgement about insolvency of the bank;
The bank’s credit institution operating licence has been revoked;
The Commission has adopted the decision that the bank is unable refund to customers their deposits placed.
The Commission is entitled to prolong term of allowance of guaranteed compensation for the term that doesn’t exceed 10 working days.
6. What the bank’s customer should do in case of announcement of insolvency of the bank (revocation of licence) in order to get his or her funds?
If the bank is unable to refund means which are placed as a deposit to the customer, then the customer should follow information of the Commission about procedure, time and date of allowance of guaranteed compensation. The customer may follow this information on the home page of the Commission in the Internet www.fktk.lv or in the newspaper “Latvijas Vēstnesis”.
7. Who implements the allowance of the compensation?
The Commission decides about procedure of allowance of guaranteed compensation. The Commission publishes information about procedure, time and date of allowance of guaranteed compensation on its home page in the Internet www.fktk.lv and in the newspaper “Latvijas Vēstnesis”.
8. How the compensation is paid?
The Commission decides about procedure of allowance of guaranteed compensation. The Commission publishes information about procedure, time and date of allowance of guaranteed compensation on its home page in the Internet www.fktk.lv and in the newspaper “Latvijas Vēstnesis”.
9. When the compensation is paid?
According to the Law, the Commission must ensure allowance of guaranteed compensation not later than in 20 working days from the day, when:
The court has made judgement about insolvency of the bank;
The bank’s credit institution operating licence has been revoked;
The Commission has adopted the decision that the bank is unable refund to customers their deposits placed.
The Commission is entitled to prolong term of allowance of guaranteed compensation for the term that doesn’t exceed 10 working days.
Additional information about deposit guarantees, as well as cases when the guaranteed compensation is not paid, you can find out by reading the Deposit Guarantee Law.
You will find more detailed information about the Deposit Guarantee Fund on the home page of the Commission in the Internet: www.fktk.lv.
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