For Depositors

General information

On 14 August 2015 the Law on Bank Deposit Guarantee entered into force (published in Darjaven Vestnik, issue 62 of 14 August 2015). The Law implements in full the requirements of Directive 2014/49/EU of the European parliament and of the Council of 16 April 2014 on deposit guarantee schemes.

What does BDIF guarantee cover?

• BDIF guarantee will cover both deposits in levs and in foreign currency. Deposits are repaid in national currency only. The guarantee covers deposits of Bulgarian and foreign citizens as well as of Bulgarian and foreign companies.

 What types of deposits are guaranteed?

• Deposit guarantee applies to all funds in a bank account opened in the name of one or more persons. A deposit may be a term deposit, a demand deposit, savings or current account, etc. Deposit insurance is applicable also to credit balances, which the bank shall repay to its customers under the terms provided by law or a contract signed.
  Joint deposits as well third party deposits are also guaranteed.

 What is the guarantee limit provided by the BDIF?

• BDIF guarantees full repayment of depositor’s funds with each individual bank, regardless of the number and size of the deposits, up to BGN 196,000 (EUR 100,000). This amount includes the principal and the interest accrued up to the date of the BNB’s resolution on a bank’s license revocation or on the declaration of unavailability of deposits with a bank, or the date of an act of a judicial authority preventing depositors from access to their funds with a bank. Additional protection up to BGN 250,000 (EUR 127,823) for a term of three months is provided for the following types of deposits: deposits of individuals arising from transactions with real estates for residential purposes; deposits of individuals arising from amounts paid in connection with conclusion or dissolution of marriage, termination of a labour contract or civil service contract, disability, or death; and deposits arising from insurance or social insurance payments or from payment of compensation for damages from crimes or reversed sentence.

Are there deposits which fall outside the scope of deposit guarantee?

• By virtue of the law, deposits of banks and financial institutions; insurers and reinsurers; pension insurance companies and the supplementary pension insurance funds and the payments funds managed by them; investment intermediaries and firms; budget organisations and guarantee funds, including the BDIF, are excluded from guarantee. Deposits connected to ‘money laundering’ are also excluded from guarantee, provided the sentence is effective. No guarantee is provided on deposits whose holder has not been identified as of the date of license revocation or declaration if unavailability of deposits. Deposits up to BGN 20 (EUR 10) are not repaid provided that there have been no operations on them over the preceding 24 months.

Does the BDIF insure deposits in all banks?

• BDIF insures deposits with all banks authorized by the Bulgarian National Bank (BNB) to accept deposits as well as deposits with branches of Bulgarian banks in other EU member states. Deposits with branches of foreign, non EU-member states, banks are also covered by BDIF, provided that the home country of such a bank does not have a deposit insurance scheme, the scheme does not apply to foreign banks’ branches or it provides a level or scope of coverage, which is less than that insured by the BDIF. Deposits with branches of EU-member states’ banks are guaranteed by the respective deposit guarantee scheme of the home country, and are thus not covered by BDIF. Within the EU deposit-taking institutions mandatorily participate in a deposit guarantee scheme.

Are banks obliged to provide information on deposit insurance to depositors?

• Yes, by virtue of the law, banks shall specify in the deposit contract whether certain deposit is guaranteed as well as provide the customer with Depositor Information that includes basic information about deposits protection.

If I hold deposits with several banks will my deposits be summed up to determine the size of the guaranteed amount?

• No, they will not be summed up. Deposits with different banks are insured individually. However, the head office and all branch offices are considered as one bank. Consequently, if a person has deposits with a bank’s head office as well as with one or more of its branches, the deposits will be summed up to calculate the guaranteed sum.

Can I increase the amount insured by BDIF through distributing my funds in several deposits with one and the same bank? 

• No, since the guaranteed amount is not computed on a single-deposit basis. A depositor cannot increase the amount insured by distributing his funds in different deposits with one and the same bank

What procedure will be applied if a bank I have placed funds with has merged with another bank?

• In case of a merger or takeover, involving two or more banks, deposits held with these banks will be insured individually for a period of six months from the date of consolidation. After the expiry of this period, deposits will be summed up in order to determine the size of the insured amount.

How does the BDIF inform depositors about the payout of guaranteed deposits?

• Not later than 2 business days prior to the commencement of repayment, BDIF shall publish an announcement in at least two central dailies and on its website, stating the initial date of repayment of guaranteed deposit amounts to depositors as well as the name of the bank/s authorized by BDIF to execute the payments. Depositors may obtain comprehensive information on the repayment of guaranteed deposits on BDIF web site, on the institution’s premises or on the phone.

When will I receive the guaranteed amount of my deposits?

• By virtue of the law, BDIF shall start paying off insured deposit amounts to their holders not later than 7 business days from the date of BNB’s resolution on license revocation or on declaration of unavailability of deposits. Under the Law on Obligations and Contracts the prescription period for reimbursement of guaranteed amounts is five years as of the initial date of repayment.

What shall I do to receive my guaranteed amounts?

• In order to receive the reimbursable amount, a depositor shall report to the bank authorized by BDIF to make the payment. The servicing bank shall either repay in cash the depositor the guaranteed amount, or, alternatively, the depositor may order a transfer of his funds to another bank, or leave them with the servicing bank. In case the depositor wishes so, he is entitled to receive a certificate stating the reimbursable amount from the trustee of the failed bank.

What if my deposits are in foreign currency?

• In this case a depositor will be repaid lev equivalent of the reimbursable amount at the BNB exchange rate as of the date of the BNB’s resolution on a bank’s license revocation or on the declaration of unavailability of deposits with a bank.

What shall I do if my deposit amount exceeds the insured cover?

• In case the amount of a customer’s deposits with the bank exceeds the guarantee limit, the depositor shall first receive the statutory guaranteed amount, whereas he may later receive additional reimbursement by the failed bank trustee, following the bank bankruptcy procedures and depending on the amount of funds recovered from the sale of the bank’s assets.

What shall I do if the servicing bank refuses to pay me the guaranteed amount or I am not satisfied with the determined amount?

• A depositor shall file objections with the conservator, temporary administrator or special manager, liquidator, temporary assignee in bankruptcy or assignee in bankruptcy of the bank, providing evidence of his claim. These persons shall reply within seven days. Objections shall be filed within three months from the initial day of repayment. If depositor’s objections have not been satisfied, he may appeal to the court.

Who manages the BDIF’s activity?

• By virtue of the Law on Bank Deposit Guarantee the BDIF is managed by a Management Board consisting of five members: a Chairman designated by the Council of Ministers; a Vice Chairman designated by the Bulgarian National Bank; one member designated by the Association of Banks in Bulgaria; and two members designated jointly by the Chairman and the Vice Chairman of the BDIF Management Board.