THE DEPOSIT GUARANTEE SYSTEM
1. What is the Guarantee Fund for Depositors?
The Fund is an instrument of the guarantee scheme for the protection of depositors and, specifically, an asset with its own independent purpose, responsible for refunding, with its own assets and the required promptness, the depositors in case the depositary bank files a petition for an administrative compulsory winding-up, which will then subrogate the depositors in their tights to repayment against the Procedure, within the limit of their entitlement..As regards the part of the deposit in excess of the indemnity received from the Fund (if any), the depositors shall in any case continue to be creditors of the bank in winding-up.
2. What is the role of the Central Bank for the Guarantee Fund?
The Central Bank, besides supervising the banking system of San Marino for purposes such as the prevention of any event that might require the intervention of the Fund, is also responsible for directly managing the Fund, by investing the financial resources allocated, by establishing the relevant accumulation plan (contribution rates) and the interventions of the Fund, always in compliance with the principle of capital separation between the Fund and the Central Bank, which is its manager.
The Central Bank is also vested with the regulatory power over the Guarantee Fund, to be exercised in compliance with the laws and decrees in force and with the European standards that San Marino undertook to adopt.
3. Is the Fund the only instrument for protecting the depositors?
No. As evidenced by the crises of some banking undertakings occurred in San Marino in the past for which, in spite of the fact that there was no Fund or that the Fund had no financial resources available, the depositors did not suffer any losses, there are different instruments for protecting the deposits functioning with other procedures, such as, for instance, by using system solutions that are completely internal or that provide for external intervention, with or without public intervention. With regard to this last point, it should be noted that San Marino has not yet implemented in its legal system the so called BRRD (Bank Recovery and Resolution Directive) also known as the directive on bail in.
4. Which are the banks that participate to the Fund?
Pursuant to article 1 of the Delegated Decree no. 111 of 22 July 2011, all banks of San Marino are required to participate in the Fund, for the protection of their own depositors.
The participation is also required from those foreign banks that intend to open a branch in the Republic.
Therefore, the following 6 banks are currently participating to the Fund: BAC Istituto Bancario Sammarinese, Banca Nazionale Sammarinese, Banca di San Marino, Banca Impresa San Marino, Banca Sammarinese di Investimento, Cassa di Risparmio della Repubblica di San Marino.
1. Does the Guarantee of the Fund only apply to natural persons or legal persons are also protected?
Legal persons are also protected, except for the cases of exclusion provided for in article III.I.2 of the CBSM Regulation no. 2016-01.
2. Does the deposit guarantee also apply to underage depositors?
Yes, underage depositors are entitled to the same guarantee as adult depositors; the relative rights are exercised by the person with the parental authority.
3. Is the guarantee of the Fund applied only to the persons resident in the territory of San Marino or with registered office in San Marino?
No, for the purposes of the Fund the residence of the depositor is irrelevant, without prejudice to the possibility for the Fund to refund the depositor in the currency of the country of his/her residence, if different from the Euro.
4. If the depositor purchases shares in the share capital of the bank, is he/she excluded from the perimeter of the persons protected by the Fund as regards his/her deposits with such bank?
No, except where, as a consequence of the equity investment, the depositor acquires the control of the depositary bank pursuant to article 2 of Law no.165/2005, in which case the exclusion provided for in letter i) of article III.I.2 of the CBSM Regulation no. 2016-01 would apply.
SUBJECT MATTER OF THE PROTECTION
1. What is the subject matter of the protection offered by the Fund?
The protection of the Fund applies to the registered deposits, whether on demand or term deposits:
and to the positive balances resulting from transitional situations such as:
2. Are shares, bonds and repurchase agreements protected by the Fund?
No, these instruments, issued by the bank in compulsory winding-up, are not covered by the protection offered by the Fund, since they are financial instruments of the type referred to in Annex 2 of the Law no.165/2005 or, in any case, securities transactions and not deposits with banks.
3. Are deposits used as collateral for debts with the bank itself protected by the Fund?
The deposits opened as guarantee for the bank are included amongst those admitted, since they are not in the list of those excluded from any repayment under article III.I.2 of the CBSM Regulation no. 2016-01; however, any liability of the depositor towards the depositary bank itself may be taken into account in determining the amount to be refunded, in line with the provisions of article III.I.4, paragraph 5 of such Regulation.
4. Are the values held in the safety deposit boxes of a bank protected by the Fund?
No, the values held in the safety deposit boxes do not fall under the protection offered by the Fund, notwithstanding that, in case of compulsory winding-up of the bank, the assets contained therein will be returned to their owner.
5. Are deposits in a foreign currency protected by the Fund?
Yes, notwithstanding the determination of their countervalue in Euro for the purposes of the application of the coverage level and the repayment activities.
THE COVERAGE LIMIT
1. What is the maximum coverage level offered by the Fund?
The maximum coverage level has been set, in accordance with the European Standards, to 100,000 Euro per depositor and individual bank, regardless of whether the banks belong to the same group.
2. How is the coverage of the Fund applied?
For the purposes of the application of the coverage level, the deposits of all accounts open in the name of the same person with the same bank are cumulated; as regards joint accounts the deposit is allocated proportionally to the number of joint account holders.
If a person holds a savings account book with a balance of 50,000 Euro, a current account with a balance of 30,000 Euro and a certificate of deposit with a value of 80,000 Euro, in case of compulsory winding-up of the bank, he/she will be entitled to receive a maximum amount of 100,000 Euro.
If two spouses are joint holders of a current account with a balance of 100,000 Euro (50,000 for each spouse), the husband holds a current account with a balance of 60,000 Euro and the wife holds a current accounts with a balance of 30,000 Euro, in case of compulsory winding-up of the bank, the husband will be entitled to receive a maximum amount of 100,000 Euro, whereas the wife will be entitled to a maximum amount of 80,000 Euro.
1. When is the repayment to the depositors carried out?
The Fund repays the depositors only in the event of an administrative compulsory winding-up of the bank, pursuant to article 85 of the LISF.
2. How long does the repayment take?
Within 20 business days, until 31 December 2018, within 15 business days from 1 January 2019 until 31 December 2020, within 10 business days from 1 January 2021 until 31 December 2023, within 7 business days from 1 January 2024. The period of time starts, in any case, from the date when the administrative compulsory winding-up measure of the bank produces its effects.
3. What should be done to recover the amounts deposited in case of winding-up of the bank?
The depositor is not required to file any application for repayment, since the Fund effects the repayments directly based on the information provided by the Liquidator.
4. Is the interest accrued on the deposit also recovered?
Yes, interest accrued up to the date on which the compulsory winding-up produces its effects is also taken into account, without prejudice to the maximum limit of 100,000 Euro.
If a current account holder has a deposit with a balance of 60,000 Euro and, as at the date of the administrative compulsory winding-up of the banks, is entitled to interest accrued for 1,000 Euro, he/she will be entitled to receive an amount equal to 61,000 Euro.
5. What happens, in case of an administrative compulsory winding-up, to the part of the deposit that is not repaid by the Fund?
Any amount in excess of the repayment made by the Fund, or, in any case, in excess of the maximum coverage level or 100,000 Euro, represents the residual credit of the depositor, which will be registered in the list of liabilities of the bank and may participate, at a later stage, to any allocation of the balance left from the winding-up.
6. If a customer holds a deposit in a foreign currency, how will he/she be refunded?
Pursuant to article III.I.5 paragraph 9 of the CBSM Regulation no. 2016-01, the Fund repays these deposits in Euro, without prejudice to the right of the Fund, if the depositor is resident abroad, to effect the repayment in the currency of his/her country of residence.
7. What are the temporary high balances?
Temporary high balances are the amounts in excess of 100,000 Euro for which, in light of the social needs linked to such balances, CBSM Regulation no. 2016-01, under art. III.I.3. provides for an enhanced protection, since, in the nine months following the credit entry or from the moment in which such balances become available, the coverage limits is not applied to:
8. Are there any minimum thresholds under which the Fund does not make any repayment?
No repayment shall be made where the value of the deposit is lower than 100 euro and no transaction relating to the deposit has been carried out in the last twenty-four months.