The purpose of the deposit protection scheme is to guarantee holders of deposits in credit entities the repayment of their monetary and security deposits up to the established ceilings, and also to take actions to strengthen the solvency and operation of entities in difficulties, in order to protect the interests of depositors and the Fund itself.
There are three Deposit Protection schemes in Spain, depending on the type of deposit entity:
- The Deposit Protection Fund for Banks (FGDEB)
- The Deposit Protection Fund for Cajas de Ahorro (Savings Banks) (FGDCA)
- The Deposit Protection Fund for Credit Co-operatives (FGDCC)
CAJA NAVARRA comes within the Deposit Protection Fund for Cajas de Ahorro (Savings Banks) (FGDCA).
Details of the protection fund
Title: FGDCA, Deposit Protection Fund for Cajas de Ahorro (Savings Banks)
Address: C/José Ortega y Gasset, 22 – 5º planta, 28006 Madrid. Spain.
Phone: +34 91 431 66 45
Fax: +34 91 575 57 28
Website: www.fgd.es
E-mail: fogade@fgd.es
The Deposit Protection Fund guarantees :
- Monetary deposits, credit balances in account, including funds originating from transitory situations arising from transactions and bearer certificates of deposit which the entity is obliged to refund in the applicable legal and contractual conditions, whatever the currency in which they are denominated, and provided that they have been established in Spain or in another European Union Member State.
- The marketable securities and financial instruments contemplated in article 2 of Stock Market Law 24/1988, which have been entrusted to a credit entity for deposit or recording or for the provision of a particular investment service.
The fund shall cover the non-return of the securities or instruments pertaining to the injured investor; it shall never cover any losses in the value of the investment.
The monetary amount guaranteed has a ceiling of 100,000 Euros per depositor in each credit entity.
The guarantee shall apply per depositor, regardless of whether the depositor is a physical or legal person and whatever the number and type of deposits guaranteed, of which that depositor is listed as a holder in the entity in question. When an account has more than one holder, then the amount shall be divided between all the holders, according to the terms of the Deposit Contract or, failing that, in equal parts. Each holder is guaranteed an amount up to the aforementioned ceiling.
The Deposit Protection Fund does not guarantee :
- Debt securities issued by the credit entity, including promissory notes and negotiable paper.
- Deposits made by other entities for their own account and in their own name, in addition to those made by securities brokers and agencies; insurance companies; stock investment companies; collective investment management companies; pension fund management companies; securitized and risk capital funds and the deposits of the management entities; portfolio management companies; risk capital companies and their corresponding management companies; entities whose principal activity is stock or share holding; entities exercising the activities that are typical of those above; in addition to any financial entity subject to prudential supervision.
- Certificates of deposit to the bearer, temporary assignment of assets and financing with a subordination clause.
- Deposits made by companies pertaining to the same financial group as the credit entity.
- Deposits made by Public Administrations.
- Deposits made by those holding an administration or management post in the entity giving rise to intervention action in the Fund in accordance with the provisions of article 1.4 of Law 26/1988, of 29th July, on Discipline and Intervention in Credit Entities and those empowered with general powers of representation; by those persons having a significant holding in the capital of the entity, in accordance with the provisions of article 56 of Law 26/1988, or a share in the companies which are members of their financial group according to the criteria contained in article 4 of Stock Market Law 24/1988, of 28th July, the Auditor responsible for the audit reports, in addition to any depositors who have the above mentioned characteristics in the companies pertaining to the credit entity group and the spouses and first degree relatives of one and the other.
Causes for the execution of the guarantee
The Deposit Protection Funds shall pay the amount guaranteed on the deposits, in any of the following events:
- State declaration that the entity is bankrupt
- Judicial request for suspension of payments by the entity.
- Statement by the Bank of Spain that the credit entity, in view of the facts made known to the Bank of Spain itself and due to the reasons directly related to its financial situation, is unable to meet the obligations assumed with the investors.
Payment of the amounts guaranteed
The FGD (deposit protection fund) shall pay the amount guaranteed on the deposits and securities or guaranteed instruments, within a period of three months as of the date of occurrence of one of the events mentioned in the point above, in the terms established in article 9 of Royal Decree 2606/1996, of 20th December. This period may be extended in certain circumstances and with the authorisation of the Bank of Spain.