The Bank Guarantee Fund is one of those institutions that most Poles forget about on a daily basis. Only a dramatic situation, such as a bank bankruptcy, draws the attention of the BFG and the security that this financial institution brings.
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As Bankier.pl reminds us, bank bankruptcy in Poland happened more often than most of us realize. Since 1989, 137 cooperative banks and credit unions and 6 commercial banks have gone bankrupt
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The Bank Guarantee Fund was established in 1995 to protect depositors against loss of funds in the event of bank failure.
Bank Guarantee Fund. What is this?
The Bank Guarantee Fund protects depositors' money in the event of financial problems of banks or credit unions. The fund not only pays out guaranteed funds, but also supervises and restructures endangered institutions to prevent financial crises.
BFG pays guaranteed funds to depositors, controls data on institutions covered by the guarantee system and analyzes their financial situation. Prepares and evaluates resolution plans and, if necessary, carries out such activities. It can also redeem or convert capital instruments to save market stability.
In the case of credit unions at risk of insolvency, BFG provides repayable financial assistance, purchases their receivables and supports entities taking over the credit unions or their assets. It also checks the correct use of the aid and support provided.
How much will BFG pay out in the event of bank bankruptcy? Rules and limits
How does BFG work? The functioning of the Bank Guarantee Fund is based on contributions collected from banks and financial institutions. The collected funds are later used as part of bankruptcy proceedings. In this way, the payment of compensation is ensured.
BFG provides refunds of money accumulated in the accounts of customers whose bank has declared bankruptcy.
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The protection covers deposits, savings accounts and personal accounts – up to PLN 100,000. euro per person. Joint account holders have separate limits. The guarantee also applies to interest accrued until the date of bankruptcy. Investment, insurance or brokerage products have different, lower guarantee limits or are not covered by BFG protection.
The guarantees apply to banks based in Poland and credit unions. However, they do not include foreign banks and the so-called parabanks – here the risk of losing funds is much greater. Before making a deposit, it is worth checking on the BFG website whether a given institution is covered by the guarantee system.
The funds are disbursed within 7 business days from the announcement of bankruptcy or the commencement of restructuring. In the case of joint accounts, the limit applies to each co-owner separately. Exceptionally, in certain situations, protection may reach up to PLN 200,000. euro for 3 months.
