Deposit Insurance Fund
Deposit Insurance Fund (DIF) is a monetary fund dedicated to protection of interests of depositors and composed of state budget resources and contributions of credit institutions that are mandated by law.
Deposits of individuals and legal entities placed in the Bank are protected by resources accumulated in the Deposit Insurance Fund. Bank customers have the right to receive from DIF government guaranteed compensation for all types of deposits in any currency which does not exceed EUR 100,000 (on separate occasions specified in the Deposit Guarantee Law an individual can receive compensation of not more than EUR 200,000) in the event that a credit institution is unable to pay out deposits due to its insolvency or annulment of its license, or due to other circumstances specified in the Law.
DIF is managed by the Financial and Capital Market Commission of the Republic of Latvia (RL) and regulated by the Deposit Guarantee Law.
On 1 July 2015, a new RL law – Deposit Guarantee Law – has taken effect. The Law:
- provides that in addition to the maximum guaranteed compensation of EUR 100,000, a depositor who is a natural person is entitled to guaranteed compensation of not more than EUR 200,000 in situations specified in Article 4 of the Deposit Guarantee Law, provided that the deposit was placed with the Bank not later than three (3) months prior to the date when deposits become unavailable:
- the deposit is composed of money derived from transactions with person’s real estate used for residential purposes;
- the deposit is composed of social benefits and compensations paid to the person, and payments intended for other social purposes as defined in respective regulatory enactments;
- deposits that are compensations paid in accordance with the procedure established by the regulatory enactments for a damage of criminal nature or unjust indictment of the person.
- determines an improved guaranteed compensation payout schedule in case when deposits become unavailable
- Starting from the 21st working day after the date of occurrence of unavailability of deposits if unavailability of deposits has occurred until 31 December 2018.
- Starting from the 16th working day after the date of occurrence of unavailability of deposits if unavailability of deposits has occurred from 1 January 2019 until 31 December 2020.
- Starting from the 10th working day after the date of occurrence of unavailability of deposits if unavailability of deposits has occurred from 1 January 2021 until 31 December 2023.
- Starting from the 8th working day after the date of occurrence of unavailability of deposits if unavailability of deposits has occurred after 1 January 2024.
- determines deposits which do not qualify for the guaranteed compensation.