The Bank Security Fund got loud about the bankruptcy of KADS Wołomin and KADS Jupiter. Despite the lack of money in the cash desks of these institutions, most customers easily recovered. How is this possible? Is everyone whose financial institution collapses entitled to money?
Bank Security Fund – what is it and what does it do?
The Bank Security Fund exists to ensure stability to the Polish financial system. To this end, it mainly undertakes two activities: guaranteeing bank deposits and carrying out forced restructuring. The fund’s financing source is primarily the fees paid by banks. In addition, the fund may benefit from a budget subsidy, a loan from the National Bank of Poland, income from its own lending activities and other sources of financing, such as international assistance.
The Bank Security Fund has 700 million PLN on its account. This is a lot, but not enough to save a large commercial bank by co-financing. To withdraw funds in the event of a large bank’s failure, the Fund will probably have to resort to the forced merger of the failing bank with a healthy one. However, the funds accumulated on the fund’s accounts will be sufficient to cover the liabilities of KADS or the cooperative bank.
In short, the Bank Security Fund means that in the event of a bankruptcy of a financial institution, people will not be left alone. In addition, it is to deal with the rest of the mess that arises in the world of finance as a result of the bankruptcy of such important institutions.
Who is covered by guarantees?
The Bank Fund Security covers all banks having their registered office in the territory of the Republic of Poland (both operating as joint-stock companies and cooperative companies). The only exceptions are Bank Good Bank in Nation (no bankruptcy option) and mortgage banks because they do not have deposits. In addition, guarantees are covered by credit unions and branches of foreign banks based in a non-EU country, provided that the law of those countries no longer guarantees payment in the amount guaranteed by WST.
The entities covered by the guarantees are, in the case of banks or branches of foreign banks:
- physical people,
- legal persons,
- organizations that are not legal persons, but to which the law confers legal capacity,
- school savings banks,
- employee assistance and loan funds,
- parents’ advice.
And in the case of credit unions:
- physical people,
- non-governmental organizations,
- church or religious organization units,
- trade unions,
- housing associations.
Deposits are not protected, among others, by other banks or credit unions, investment funds and management staff
The banking system in Poland
The Bank Security Fund is one of the pillars of the national banking system. In addition to it, the National Bank of Poland and the Polish Financial Supervision Authority have a stabilizing role. The banking sector is subject to stabilizing institutions, i.e. commercial banks, credit unions and credit institutions.
In addition, under the banking system, there are less regulated institutions forming the so-called shadow banking. They are not subject to the Fund’s guarantees, but most of them are supervised by the PFSA.
How to recover money from the bank or credit unions?
Customers of bankrupt banks and credit unions should follow nationwide dailies and the WST website. Information on the date and method of payment of guaranteed funds will be provided there. They can be picked up in cash or via bank transfer. The fund will have a previously prepared list of clients together with the amount of their deposits.
Omission of withdrawals at places and times specified by the fund does not mean forfeiture of money. The fund promises the payment of guaranteed funds in its offices for 5 years from the start of payments. Just complete the appropriate application.
Guarantee amount – up to 100,000 or 200,000 euros
The guarantee amount in WST is the equivalent of EUR 100,000 in zlotys. It is calculated on the basis of adding up all the funds deposited in the accounts at the given bank. If the account is shared, each holder is entitled to a separate guarantee amount. Clients of investment companies are entitled to separate funds – the funds are paid to them individually, and not in one amount for the investment company.
You can then get a guarantee in the amount of up to EUR 200,000 in zlotys, up to the difference between this value and the refund you have already received for your funds. This guarantee covers funds deposited within the last 3 months arising from:
- sale of a single-family house,
- the sale of an independent housing unit or the right to use it,
- selling land or the right to use it,
- division of property as a result of divorce,
- payment of life insurance,
- payment of accident insurance,
- cash severance pay,
- retirement or disability severance pay,
- compensation for damage caused by crime or compensation for harm. The latter funds are guaranteed in full, with no quota limit.
List of banks covered by guarantees
As a rule, all banks are covered by the warranty. However, if someone is wondering if his institution guarantees deposits up to PLN 100,000. Euro, we present an appropriate list. It covers only commercial banks, omits cooperative banks and credit unions.