Deposit insurance, structured into the system, arose on the basis of the adoption of the Federal Law on the Deposits of Individuals in the Russian Federation. The main goal of the structure is a comprehensive protection of the rights and interests of state depositors, which should stimulate confidence-building in the state banking system and attract new investors. Absolutely all banks in the country should take part in the deposit insurance system.
Insurance object
In the role insurance objects bank deposits, funds in national or foreign currency, which are placed in financial institutions of the country by individuals on the basis of an agreement, are acting. Deposit insurance covers not only the body of the deposit, but also the interest accrued on it along with capitalization. Investments in banking format fall under protection savings certificates and bills. To participate in the system it is absolutely not necessary to conclude an insurance contract. Compensation of payments under the system occurs on the day the insured event occurs.
Insured events and specifics of payments
The Deposit Insurance Agency is obliged to compensate the depositors of the bank if the financial institution has revoked the banking license for financial transactions. Alternatively, the Bank of Russia has introduced a moratorium on satisfying the requirements of a bank creditor. When applying to the agency with claims for compensation for damage, the depositor must provide an appropriately executed application along with identification documents. The amount of payment for each depositor is determined individually, based on the volume of obligations on bank deposits. If the size of the deposit does not exceed 700,000 rubles, compensation for the deposit is made in full. Expert estimates suggest that such an approach to the situation guarantees the fastest access to savings from 80% to 85% of depositors even before the official bankruptcy procedure is started.
Important points and specifics of calculations
Deposit insurance extends to accounts in different currencies, however, compensation is paid exclusively in the national currency of Russia. To calculate the volume of payments, the deposit in dollars or euros is converted at the rate of the national bank. If a depositor has several deposits at the same time at a financial institution, while their amount exceeds 700,000 rubles, compensation payments will be evenly distributed among all available deposits. If an insured event extends simultaneously to several banks in which a person has deposits, insurance premiums will be calculated separately for each bank. If a financial institution also acts as a creditor for a depositor, then the compensation payment will be calculated on the basis of the difference between the obligations of the bank itself and the amount of counterclaims.
When to wait for payments?
In accordance with the legislation, the deposit insurance agency makes payments on the register of bank liabilities within three days from the moment the client submitted the relevant documents. Payment cannot be made earlier than two weeks after the occurrence of the insured event. Information about in what order and where applications for payments will be accepted is published in the Bulletin of the Bank of Russia or in the press at the location of the financial institution.If the agency does not make payments in the prescribed manner, the depositor may claim a penalty interest corresponding to the refinancing rate for each day of delay.
How are compensation paid?
Deposit insurance in banks of the Russian Federation is provided by the Deposit Insurance Fund. The Fund is the property of the Agency, and specialized records are kept on it. All funds of the fund are accounted for under the Agency’s specialized account with the Bank of Russia. The financial institution does not pay interest on the balance of the account. The formation of the fund is carried out on the basis of several sources:
- Insurance premiums made by banks.
- Penalties accrued in case of late or incomplete payment of insurance premiums.
- In some cases, the fund receives funds from the federal budget.
- Cash and other property that has received satisfaction under the Agency's rights of claim after payment of compensation for deposits.
- Profit from investing available funds of the fund.
- Initial property contribution.
The principles of the Russian deposit guarantee system
The Russian deposit guarantee system is based on a number of principles. This is the mandatory participation of banks in the compulsory insurance system. The mechanism is aimed at reducing risks in the event of adverse consequences for investors, if financial institutions fail to fulfill their obligations. The structure is based on absolute transparency. The fund is formed by the accumulation of insurance premiums from banks participating in the system. Commercial entities that have a stable financial position, comply with economic standards and reliably keep records and reports are allowed to participate in the association. A prerequisite for partnership is the absence of penalties from the supervisor.
Rules and regulations
Deposit insurance is a prerequisite for attracting funds of individuals by banks. If a financial institution is not involved in the deposit system, it is forbidden to accept funds from its customers. In this regard, it is customary to post certificates on information stands in financial institutions that are issued by a state corporation, the Deposit Insurance Agency. The presence of a specialized blue-green sign with the inscription “Deposits are insured” is mandatory. Banks in the deposit insurance system, as well as the system itself, are controlled by the Government of Russia and the Bank of Russia through the participation of bank representatives in the management bodies of the Agency.
System classification
Deposit insurance is dictated to a greater extent by historical events. In the 20th century, after a wave of crisis swept across the world, many sectors of the economy suffered significantly. The socio-political situation also came under attack. In order to avoid a recurrence of events in the future, a unique financial structure was established, the main task of which is deposit insurance. In order to strengthen public confidence, banks willingly accepted the innovation.
Today, there are only two models of deposit insurance: German, or Continental, and American. For the German model, the formation of certain credit institutions is characteristic. These unions assume the function of managing insurance funds that belonged to the participating banks of the system. In accordance with the American insurance system, the state forms one single financial body, which works thanks to state funds and funds of financial institutions. In the 20th century, the emergence of deposit insurance systems in each of the countries of the world became the norm. State governments took as a basis one of the existing models and adapted it to their interests.
Insurance in 2015
The economic crisis that swept over Russia at the end of 2014 left a big imprint not only on the activities of many enterprises, it left a significant mark in the lives of many people. A huge number of banks over the past year have defaulted. The contribution that the insurance of the Russian Federation on which was offered on the basis of the current legislation is the only thing that the inhabitants of the country hoped for. Against the background of the current situation, the government has modernized the legislation, and the maximum amount of compensation, which was previously equal to 700 thousand rubles, today corresponds to 1.4 million. Despite the increase in the payout limit, analysts confidently say that an influx of investors should not be expected this year. Large investors and businessmen choose foreign banks. Individual deposit insurance in them is not accompanied by a limit on compensation payments. Instability of the ruble in the last six months has left a significant imprint on the situation, which has become one of the reasons for the outflow of capital from Russia. It will be hard to talk about the situation further. We can only note the fact of a significant modernization of the insurance system, which is aimed at reducing risks for investors.
