Petre Tulin,
General Director of the Bank Deposit Guarantee Fund
Established 30 years ago, the Bank Deposit Guarantee Fund (FGDB) is the sole statutory deposit guarantee scheme officially recognised in Romania.
The FGDB is a public interest legal person overseen by a Supervisory Board made up of representatives of the National Bank of Romania and the Ministry of Finance.
The FGDB’s fundamental mission is to protect all the funds held by natural persons and companies in bank accounts, such as current accounts, term deposits, card accounts, savings accounts and other products generically assimilated to “bank deposits”. Basically, the FGDB compensates depositors if the bank where they hold their money can no longer meet its payment obligations towards them (for example, deposits become unavailable when a bank goes bankrupt). The compensations are made available to the guaranteed depositors within 7 working days at the most of the date of unavailability of the deposits.
The FGDB guarantees deposits placed with all credit institutions authorized by the National Bank of Romania, including deposits from their branches abroad. Deposits with branches of credit institutions established in other Member States are guaranteed by schemes in their home Member States. In the latter case, based on the cooperation agreements concluded at the level of the European Union, the process of payment of compensation for depositors in Romania is carried out by the FGDB on behalf of the schemes in the home Member States.
Other activities
The FGDB’s role within the national system that safeguards financial stability has been gradually expanded and strengthened along the years. In compliance with the provisions of the European framework for the recovery and resolution of credit institutions, the FGDB’s duties also include the management of the bank resolution fund and participation in implementing early intervention and bank resolution measures decided by the National Bank of Romania as the supervisory and resolution authority. In this respect, the FGDB may act as temporary administrator of credit institutions going through a recovery process (early intervention), special administrator of credit institutions under resolution, shareholder of a bridge bank or of an asset management vehicle, in accordance with the legislation on the recovery and resolution of credit institutions.
The FGDB also acts as sole liquidator of credit institutions where liquidation is either initiated by shareholders or complies with a decision by the National Bank of Romania.
Coverage level
The funds held by a depositor with a bank are covered by the FGDB up to 100,000 euros, in lei equivalent, this being the level applicable in all the European Union Member States.
Several categories of natural persons’ deposits benefit from an additional coverage of 100,000 euros (in lei equivalent), which is distinct from the standard coverage, for a period of 12 months from the date on which the amount was credited to the account.
The additional coverage is applied to deposits resulted from real estate transactions relating to private residential properties, deposits that serve social purposes laid down
in national law and are linked to particular life events of a depositor such as marriage, divorce, retirement, dismissal, redundancy, invalidity or death as well as deposits that serve purposes laid down in national law and are based on the payment of insurance benefits or compensation for criminal injuries or wrongful conviction.
Resources administered by the FGDB According to the data published on the European Banking Authority’s website, the FGDB has one of the strongest financial capacities among deposit guarantee schemes in the European Economic Area. In addition to the managed resources, the FGDB also has a multitude of alternative financing mechanisms that it can resort to in case of need, such as loans from the Government, through the Ministry of Finance, preventive loans from international financial institutions/credit institutions, with state guarantee, short- term financing from the National Bank of Romania, through repo transactions, loans from credit institutions, financial companies, other deposit guarantee schemes and other institutions.
