Financial Crime World

Poland’s Bank Guarantee Fund: Ensuring Depositor Protection

======================================================

Poland has a mandatory depositor protection scheme administered by the Bank Guarantee Fund (BGF), which ensures that deposits up to a certain amount are protected in case of a bank’s insolvency. In this article, we will explore the scope and limitations of Poland’s bank guarantee fund.

Depositor Protection Regime

According to the Act on the Bank Guarantee Fund, all banks with their corporate seat in Poland are required to participate in the fund. The contribution is based on factors such as management profile, capital, liquidity, and asset quality.

Coverage

The BGF covers:

  • Funds accumulated in bank accounts
  • Other receivables arising from selected banking activities
  • Funeral costs of deceased account holders
  • Selected receivables from bank securities

However, the guarantee does not extend to:

  • Deposits with turnover only during interest operations within two years prior to the guarantee condition fulfillment date
  • Electronic money or funds received in exchange for electronic money

Entities Entitled to Guarantee

The following entities are entitled to claim the guarantee:

  • Natural persons
  • Legal persons
  • Organisational units with legal capacity
  • School savings funds
  • Savings and loan associations
  • Parent councils

Limitations

The guarantee is capped at PLN equivalent of EUR5 million for each depositor. Additionally, the Polish Financial Supervision Authority (PFSA) may impose restrictions on bank activities or even revoke a bank’s licence if it fails to meet the required capital adequacy ratio.

Bank Secrecy Obligations

Banks are obligated to maintain secrecy regarding banking transactions, negotiations, and contract execution. However, disclosure is permitted in specific circumstances, such as:

  • Outsourcing activities
  • Providing legal services
  • Sharing information with other banks or financial institutions necessary for anti-money laundering and counter-terrorism financing obligations

Consequences of a Breach

Breaching bank secrecy can lead to both civil and criminal liability, including fines up to PLN1 million and imprisonment for up to three years. Moreover, disclosing personal data subject to bank secrecy may attract additional administrative penalties under the General Data Protection Regulation (GDPR).

Prudential Regime

The Banking Law prescribes initial capital requirements, with a minimum of PLN equivalent of EUR5 million. However, the PFSA may require higher capital for banks engaging in broader banking activities. The EU’s CRR/CRD package implements most Basel III standards, and Poland has implemented these regulations into its national law.

Conclusion

Poland’s bank guarantee fund plays a crucial role in ensuring depositor protection while maintaining a prudential regime to safeguard the financial system.

Authors

  • Dr. Marcin Olechowski
  • Dr. Wojciech Iwański
  • Tytus Brzeziński

Firm

Sołtysiński Kawecki & Szlęzak

Date

[Insert Date]