FAQ about the deposit guarantee scheme
Which depositors have their deposits covered by the guarantee?
The deposits of private individuals, private individuals pursuing registered business activities, sole traders and legal entities (corporates) are covered by the deposit guarantee scheme.
The deposit guarantee scheme shall not cover the deposits of the following depositors:
1. deposits in bearer form, including deposits for which the bank has not obtained the requisite information for the identification of the actual beneficiaries by the cut-off date for the calculation of the guarantee;
2. deposits by banks and investment firms and other financial institutions made on their behalf and for their account;
3. deposits by insurance undertakings, reinsurance undertakings and insurance holding companies;
4. deposits by collective investment undertakings, including investment undertakings of the closed-ended type;
5. deposits by pension funds and pension companies;
6. deposits by states and central banks and deposits of entities that are direct or indirect users of the state budget;
7. deposits by local communities and deposits by direct and indirect users of the budgets of local communities.
What is classed as the deposit covered by the guarantee up to EUR 100,000?
The total stock of claims that a deposit holder (depositor) holds against a particular bank and savings banks, that derives from the positive balances in the depositor’s accounts and that the bank must repay to the depositor in accordance with law and contracts is classed as a deposit covered by the guarantee up to EUR 100,000.
In particular these are the funds that a depositor holds at a bank on the basis of a current account agreement, a savings account agreement or a cash deposit agreement, or a certificate of deposit or a treasury bill when issued as a registered security.
The guaranteed deposit is calculated on the cut-off date for the calculation of the guarantee, and may not exceed EUR 100,000 including the interest accruing by the aforementioned date.
Total guaranteed deposits amounted to EUR 17.06 billion as at 31 December 2016.
We recommend that depositors provide their banks with all the information necessary to identifying the beneficial owners of deposits, and should update such information regularly.
The law stipulates that claims shall not be considered a deposit if they have one of the following characteristics:
- they arise out of financial instruments as defined in the law governing the financial instruments market, unless this is a savings product for which an appropriate certificate exists which is registered to a name and was in existence on 2 July 2014;
- the principal is not repaid at nominal value;
- the principal is repaid at nominal value only if there is a surety, guarantee or other similar guarantee agreement from a bank or third party;
- they are regarded as a debt security of the bank or arise out of the bank’s own acceptances and promissory notes;
- pursuant to an agreement or regulations, they may be used exclusively for the repayment of the depositor’s liabilities to the bank;
- they can be included in the bank’s own funds calculation in accordance with Regulation (EU) No 575/2013 with regard to their characteristics.
How does the deposit guarantee function for custodial accounts, in particular sinking fund accounts (for contributions by communal owners)?
Article 42 of the Housing Act stipulates that the administrator of a multi-residence building must ensure that all contributions to the sinking fund by communal owners are managed in a separate current account. The administrator opens a separate account for the sinking fund in his/her own name for the account of the communal owners of a multi-residence building.
More information is available in Slovene on Kako je z jamstvom za vloge na skrbniškem računu (npr. računu rezervnega sklada)?
Do the depositor’s liabilities to the bank affect the amount of the depositor’s guaranteed deposit?
EXAMPLE: A person has a current account at a bank in which there is EUR 3,500 and at the same bank has a savings account containing EUR 90,000 and a loan in the amount of EUR 80,000. In this case the guaranteed deposit at the bank in question is EUR 93,500. The loan, i.e. the amount of the depositor’s liabilities to the bank, is not deducted from the savings, and has no effect on the amount of the guaranteed deposits.
IMPORTANT: The law stipulates that the calculation of the amount of guaranteed deposits for repayment to a depositor (when a bank collapses) does not take account of the depositor’s liabilities to the bank (e.g. loans), except in one case, when the liabilities to the bank fell due for payment before or on the cut-off date for the calculation of the guarantee and the liability may be offset against the depositor’s claims from the guaranteed deposit in accordance with applicable contracts or regulations. In this regard the important provision of the law is that banks must inform the depositor before the conclusion of the contract whether his/her/its liabilities to the bank may be offset against the claim from the repayment of the guaranteed deposit.
In which cases can the depositor be repaid more than EUR 100,000 in the event of the collapse of a bank?
The law stipulates that assets that are the direct result of the following are covered by the guarantee in full in the deposit guarantee scheme, i.e. above the amount of EUR 100,000:
• the purchase or sale of residential real estate (including the young family’s subsidy for first-time homeowners from the national housing fund scheme);
• payouts from social insurance, health insurance or life insurance;
• disability benefit payments;
• payments of compensation in connection with criminal offences;
• payments of cash assistance for natural and man-made disasters (with the exception of assistance paid in connection with business activities);
• payments of compensation for wrongful conviction and imprisonment, cash compensation for non-material damage and compensation for victims of criminal offences (with the exception of compensation for loss of earnings);
• payouts from property insurance for damage to personal property;
• payments of solidarity benefit and similar assistance in the event of death, maintenance payments on the basis of a court ruling or maintenance agreement, and maintenance substitutes;
• payments of termination benefits in the event of retirement or redundancy.
The aforementioned payments will be received in full by the depositor in the event of the collapse of the bank, provided that they were transferred to the depositor no more than six months before the issue of the Bank of Slovenia’s decision on the unavailability of deposits.
Are deposits at all banks and savings banks in Slovenia covered by the guarantee?
Deposits paid into the following are covered by the guarantee under the deposit guarantee scheme in Slovenia:
• banks and savings banks established in Slovenia, and
• third-country banks that have obtained an authorisation to establish an EU branch in Slovenia. The Bank of Slovenia requires third-country banks to include their EU branches in the deposit guarantee scheme in Slovenia, if the home country does not provide the same level of protection as in Slovenia and other EU countries. There are no branches of third-country banks established in Slovenia at present.
Deposits at Member State banks that provide banking services in Slovenia via a branch or directly are covered by the deposit guarantee scheme in the Member State in which the bank is established. All deposit guarantee schemes in other EU countries provide the same essential conditions with regard to the guarantee, and therefore the position of depositors is essentially the same in all deposit guarantee schemes in EU countries (with regard to the definition of eligible deposits, the amount of the guarantee and the maximum deadlines for repayment).
IMPORTANT: Information about the deposit guarantee scheme in which the bank or savings bank is included must be clearly displayed on the premises of all banks and savings banks in Slovenia, including the amount and scope of the guarantee that it provides, the definition of deposits not covered by the guarantee, the deadline for the repayment of guaranteed deposits, and the contact information for the deposit guarantee scheme.
Natural persons pursuing business activities, sole traders and legal persons
Taking into account their nature as natural persons, all deposits of natural persons pursuing business activities and sole traders are considered as an aggregated claim of a single person against a bank, covered up to the amount of EUR 100.000.
Legal persons are considered as individual depositors, covered up to the amount of EUR 100.000.
Deposit guarantee scheme
Where can depositors obtain information about the deposit guarantee scheme?
Each bank must display information about the deposit guarantee scheme in which it is included on its publicly available website and in a clearly visible position in all premises where it transacts with clients. The information must state the following:
• the amount and scope of the guarantee,
• which deposits are not covered by the guarantee,
• the deadline for the repayment of guaranteed deposits,
• the currency of repayment (euros), and
• the contact information for the deposit guarantee scheme.
More detailed information is prescribed by the Bank of Slovenia via secondary legislation.
How should a bank inform depositors about the deposit guarantee scheme?
ANNUAL INFORMATION: Banks provide information about the deposit guarantee scheme to depositors at least once a year.
REGULAR BALANCE STATEMENTS: The law also stipulates that the information as to whether the claims are covered by the guarantee under the deposit guarantee scheme must be stated in the regular statement of the balance of the claims against the bank. Reference to a website where detailed information about the deposit guarantee scheme can be found must also be included.
PRIOR TO CONCLUSION OF A DEPOSIT AGREEMENT: The bank must provide information to the depositor about the deposit guarantee scheme before the conclusion of the deposit agreement. In the form agreed for the conclusion of the contract, the depositor must confirm that the information has been provided. The bank must provide the information in written form should the depositor so request.
IN THE EVENT OF A BANK MERGER: A bank that is merging with another bank must inform its depositors accordingly at least one month before the merger. It must warn them that each depositor’s deposits will be aggregated as a result of the bank merger, and could therefore exceed the maximum level covered by the guarantee (EUR 100,000). A depositor whose aggregate deposits at the merged bank exceed the amount of coverage (EUR 100,000) may, irrespective of contractual provisions and without additional costs, request the repayment of an eligible deposit from the bank, including all interest and other benefits accruing by the date of repayment. The depositor may exercise this request within three months of receiving notice of the merger.
Information for depositors
How will the deposit guarantee scheme function under the new arrangements?
The Deposit Guarantee Scheme Act, which has been in force since 12 April 2016, requires the establishment of a special deposit guarantee fund. The fund was established in 2016, and is managed as separate assets by the Bank of Slovenia.
More: Annual report of the deposit guarantee fund (only in Slovene)
The fund is part of the deposit guarantee scheme established and operated by the Bank of Slovenia. This means that the Bank of Slovenia:
• collects the banks’ regular and ad hoc contributions to the deposit guarantee fund, and enters into agreements on other forms of financing the fund;
• puts in place, vets and updates the procedures and arrangements for the repayment of coverage of guarantee deposits (including stress testing);
• carries out activities for using the deposit guarantee fund to finance measures of bank resolution or compulsory dissolution that ensure that depositors retain access to guaranteed deposits;
• conducts supervision of members of the deposit guarantee scheme (all banks and savings banks established in Slovenia, and branches of third-country banks included in the system in Slovenia) with regard to their fulfilment of the obligations to the deposit guarantee scheme.
The fund’s target level
The amount of funds, i.e. the fund’s target level, will be stipulated as a percentage of the total amount of all guaranteed deposits in Slovenia, and will be determined by the Bank of Slovenia.
Total guaranteed deposits amounted to EUR 19.09 billion as at 30 September 2019.
The fund’s target level is at least 0.8% of total guaranteed deposits. Funds will be paid into the fund by banks in annual contributions until the fund’s target level, as determined by the Bank of Slovenia, is reached, whereby funds equivalent to at least 0.8% of total guaranteed deposits as at 3 July 2024 must be paid in by banks by the aforementioned date.
More: Deposit guarantee fund
What will the funds from the Deposit Guarantee Fund be used for?
Please, find the answer here.
How will the Deposit Guarantee Fund be financed?
The financing of the fund shall be provided through:
1. regular and extraordinary contributions of banks;
2. income from the fund's investments;
3. borrowing in the market, in particular through the issue of bonds, and
4. the acquisition of loans from other sources in accordance with the Deposit Guarantee Scheme Act (Official Gazette of the Republic of Slovenia, No. 27/16).
How does the guarantee scheme work
How are depositors and the public informed that a particular bank is in difficulties, and that the deposit guarantee scheme will be triggered?
Depositors should be attentive for a decision on deposit unavailability, which is issued for a specific bank by the Bank of Slovenia and is published:
• on the website of Ajpes, the Agency for Public Legal Records and Related Services (www.ajpes.si),
• on the website of the Bank of Slovenia (www.bsi.si),
• in at least two daily newspapers with national circulation.
Deposits at the bank in question are classed as unavailable as of the day that the decision on deposit unavailability at the bank is published on the Ajpes website.
The Bank of Slovenia issues a decision on deposit unavailability within five days of determining:
• for a bank: that it is collapsing, and is not or will not be able to repay its deposits, and that measures to maintain depositors’ access to guaranteed deposits in resolution or compulsory dissolution proceedings will not be applied to it,
• for an EU branch: that is has failed to repay deposits because deposits at the third-country bank have become unavailable, or grounds for the withdrawal of the authorisation to establish an EU branch in Slovenia have arisen and the EU branch is not and will not be able to repay its deposits.
Are depositors informed separately of the repayment of deposits?
A notice is issued to depositors. Within five business days of the publication of the decision on deposit unavailability, the Bank of Slovenia must publish a notice to depositors on its website (www.bsi.si) and on the Ajpes website (www.ajpes.si).
The notice must contain at least the following information:
• the name of the repayment bank, i.e. the bank to which the Bank of Slovenia as the operator of the deposit guarantee scheme will transfer the funds for repaying depositors and via which depositors will obtain access to their guaranteed deposits,
• the date from which depositors will be able to access their deposits (the deadline will be gradually reduced from 20 to a maximum of seven business days from the publication of the decision on deposit unavailability),
• information that deposits will be repaid in euros, and the exchange rates at which claims in other currencies will be converted;
• the minimum amount of a deposit that will be repaid (deposits that are lower in value than the administrative costs of repayment and in relation to which there has been no transaction in the last 24 months will not be repaid);
• the charges for holding a sight deposit at the repayment bank (the Bank of Slovenia will stipulate the maximum amount that the repayment bank may charge depositors in the first six months; after six months the bank will apply its own prices);
• instructions to depositors on how to exercise their rights in connection with the guaranteed deposit; and
• information for depositors with regard to registering their claims in bankruptcy proceedings.
How long will it take before depositors of a collapsed bank have their guaranteed deposits again at their disposal?
This deadline will be gradually reduced from 20 to seven business days from the publication of the decision on deposit unavailability:
The deadline will remain at 20 business days from the publication of the decision on deposit unavailability until 31 December 2018, will then be reduced to 15 business days between 1 January 2019 and 31 December 2020, and to 10 business days between 1 January 2021 and 31 December 2023, and will stand at seven business days as of 1 January 2024.
IMPORTANT: In certain cases the deadline periods for the repayment of guaranteed deposits are counted from other cut-off dates. Example: When a deposit is the subject of a legal dispute, the deadline period is counted from the day that the dispute becomes res judicata, or when it is unclear on the basis of the available information whether the depositor has a right to repayment, the deadline period is counted from the day when the depositor provides the requisite evidence of eligibility. (For more, see Article 17 of the Deposit Guarantee Scheme Act.)
Are there any exceptions when guaranteed deposits are not repaid to depositors?
The law stipulates that repayment is not made if no transaction relating to the deposit has been made in the 24 months before the cut-off date, and at the same time its value is lower than the administrative costs that would be incurred in making repayment.
The depositor is also not entitled to the repayment of a guaranteed deposit from the deposit guarantee scheme if the deposit has arisen out of transactions in connection with which there has been a conviction for the criminal offence of money laundering or terrorist financing.
At which bank will depositors receive their payout?
The Bank of Slovenia designates the bank via which deposits are paid out to depositors of a bank that is no longer capable of covering its deposits. Depositors are informed of the payout bank in a notice. Within five business days of the publication of the decision on deposit unavailability, the Bank of Slovenia must publish a notice to depositors on its website (www.bsi.si) and on the Ajpes website (www.ajpes.si).
One or more banks that have a suitably distributed branch network and that meet the technical, organisational and staff conditions may be designated as a payout bank. As the operator of the deposit guarantee scheme the Bank of Slovenia transfers the funds for paying out deposits to the payout bank, by deadlines that ensure that the payout requirements are met (see FAQ How long will it take before depositors of a collapsed bank have their guaranteed deposits again at their disposal?). At the same time it provides information on deposits and depositors covered by the guarantee, and instructions. The funds that the Bank of Slovenia transfers from the deposit guarantee fund are classed as an interest-free sight deposit in the name of the depositor at the payout bank.
What are the assurances that the deposit guarantee scheme will actually pay out?
The Bank of Slovenia is required to conduct testing every three years to review the practical functioning of the deposit guarantee scheme and the adequacy of the procedures. The testing is also participated in by the Ministry of Finance, the banks covered by the deposit guarantee scheme, and the deposit guarantee schemes of EU Member States and third countries.
Is data on depositors covered by the deposit guarantee secure?
Yes. The law explicitly stipulates that all data on individual depositors that the Bank of Slovenia has at its disposal for the purposes of operating the deposit guarantee scheme is confidential.