What does the Bank Guarantee Fund do?
The Bank Guarantee Fund (BFG), in the event of bank bankruptcy, provides holders with payments of funds accumulated in bank accounts. The subject of the guarantee is a depositor's claim. To put it simply, the BFG pays money to the entitled person when the bank (SKOK) of a given person goes bankrupt.
In order for the Bank Guarantee Fund to be able to perform tasks related to the operation of the cash guarantee system, it has a special guaranteed settlements account at the National Bank of Poland. This account is credited with funds from obligatory deposits of all banks covered by the guaranteed system, as well as funds from the assistance fund and interest on delays in making payments by banks.
Building the Bank Guarantee Fund
The Bank Guarantee Fund consists of two funds:
statutory - created in order to provide amounts for the payment of funds guaranteed by the Fund.These funds come from the payments of the National Bank of Poland and the Minister of Finance, as well as from the amounts obtained from the bankruptcy estate of bankrupt banks and the balance sheet surplus,
aid - its role is to provide funds to finance GFB tasks. The money is placed on an account separated from the current account. They come from obligatory annual payments of entities covered by the guaranteed system (banks), from interest due to delayed annual payments.
In the event of bank bankruptcy, the BFG pays funds in bank accounts (in PLN and foreign currencies) together with interest accrued until the bank's bankruptcy declaration - up to the 100% equivalent of EUR 100,000. However, this amount may change each year. Guaranteed funds are always paid out in PLN.
What is the process of paying out guaranteed funds?
The bank or SKOK that declares bankruptcy draws up a list of persons authorized to receive guaranteed funds. The BFG then publishes the date and place of payments. After presenting the ID document at the indicated entity, the money can be withdrawn in cash or by transfer to the account.
In order to calculate the amount of the withdrawal of funds from the Bank Guarantee Fund, the average euro exchange rate (in line with the NBP exchange rate table) applicable on the day the bank declares bankruptcy should be used.
The client deposited the amount of PLN 110,000 in a term deposit account.
The bank declared bankruptcy after one year of the term of the deposit. Pursuant to the agreement, the interest rate on the deposit was 5% per annum (without periodic capitalization - interest payable after one year). The average euro exchange rate on the day the bank was declared bankrupt was EUR 1 = PLN 4.50.
What amount of payment from the Bank Guarantee Fund can the depositor expect?
1. We determine the amount that the depositor would receive after one year if the bank had not declared bankruptcy:
a) the amount of interest due:
110 00 x 5% = PLN 5,500
b) total amount (deposit + interest):
PLN 110,000 + PLN 5,500 = PLN 115,500
2. The payment from the Bank Guarantee Fund amounts to PLN 115,500 (EUR 25,666.67), as it does not exceed the statutory guaranteed amount (the equivalent of EUR 100,000).
If the client has liabilities towards the bank (e.g. loans), then when calculating guaranteed funds, the sum of funds on all accounts should be reduced by the value of this liability.
If the amount exceeded the guarantee limit, the funds would be disbursed by the administrator or trustee from the bankruptcy estate of the bank under the bankruptcy procedure.
Payments are made within 7 business days from the date of the bankruptcy application for bankruptcy of the bank or SKOK.
After the disbursements in the indicated entity are completed, the guaranteed funds can be collected from the Bank Guarantee Fund within 5 years from the date of submission by an authorized institution of an application for bankruptcy of the bank or SKOK.
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What are the tasks of the Bank Guarantee Fund?
In addition, the Bank Guarantee Fund:
provides financial assistance to banks that have lost financial liquidity and are in a situation of insolvency,
supports restructuring processes concerning cooperative savings and credit unions, and also provides them with assistance in the event of a threat of their insolvency,
prepares analyzes and forecasts concerning the banking sector and cooperative savings and credit unions,
collects and analyzes information on entities covered by the guarantee system,
domestic banks that implement a recovery program provide a guarantee to increase their own fund, and then, when they exercise this guarantee, buy or take up shares, bonds or bank securities