Deposit
Date of compensation
Level of compensation for deposits
Giving notification to depositors
Procedure for granting compensation
Payment of compensation
Term of compensation
Deposits not subject to guarantee and compensation

Deposit

For the purposes of the Guarantee Fund Act a deposit refers to:

• claims arising from the settlement contract of a depositor against the credit institution managing the account of the depositor and
• claims arising from the settlement or loan contract of a depositor against the borrowing credit institution;.
• a sum for the transfer of which depositors or other persons have issued a corresponding payment order for their own account but the credit institution has not executed the payment order by the date on which deposits become unavailable;
• non-transferable registered acknowledgements of obligation pertaining to deposits (deposit certificates).

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Date of compensation

Deposits of depositors of credit institutions registered in Estonia and Estonian branches of foreign credit institutions shall be guaranteed and compensated for out of the Deposit Guarantee Sectoral Fund.
The Fund is required to compensate for deposits under the conditions and pursuant to the procedure provided by the Guarantee Fund Act as of the date on which the deposits become unavailable.
For the purposes of the Guarantee Fund Act, the date on which deposits become unavailable is one of the following dates, whichever occurs first:

• the date on which a moratorium is declared on a credit institution;
• the date on which the authorisation of a credit institution is revoked;
• the date on which the authorisation issued to a foreign credit institution for foundation of a branch in Estonia is revoked;
• the date on which bankruptcy proceedings are commenced against a credit institution on the basis of a court ruling;

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Level of compensation for deposits

Deposits, together with the interest thereon as at the date on which the deposits become unavailable, shall be guaranteed and compensated for to the extent of 100 per cent but not more than in the amount of 782 330 koons (50 000 euro) per depositor in any one credit institution.

Interest on a deposit shall be calculated on the basis of the rates provided for in the settlement or loan contract or, in the absence of a written agreement, on the basis of the rates provided for in the standard depositing terms valid in the credit institution on the date on which the deposits become unavailable.

Giving notification to depositors

Within three working days after the date on which deposits become unavailable, the Fund shall publish a notice in at least two daily national newspapers on at least two occasions setting out at least the following information:

• the name of the credit institution or the branch of a credit institution in which deposits have become unavailable;
• the procedure and terms for gaining access to the accounting information including balance statements regarding the deposits and for the submission of positions on the correctness thereof;
• the term and procedure for payment of compensation;
• a list of the documents required upon the payment of compensation.

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Procedure for granting compensation

Not later than within twenty-four days after the date on which deposits become unavailable, the trustee in bankruptcy, moratorium administrator or liquidator of a credit institution is required to:

• ensure that each depositor has the opportunity to gain access to the accounting information regarding the deposit thereof and to receive a balance statement regarding the deposit;
• provide the Fund with information regarding the depositors and the balances of their deposits, indicating separately the information regarding the depositors and deposits

Depositors have the right to submit their positions regarding the correctness of the balance of their deposits to the trustee within sixty days after publication of the last notice in daily national newspaper.

The Fund shall determine the deposits subject to compensation and the amount of compensation payable to each depositor under the conditions and pursuant to the procedure provided for in the Guarantee Fund Act on the basis of the information submitted by the trustee.

Compensation for joint deposits shall be paid to the depositors in equal amounts unless otherwise provided for in the settlement or loan contract. A joint deposit is a deposit which belongs to two or more persons jointly. For the purposes of compensation for a joint deposit, each owner of the joint deposit shall be deemed to be a depositor.

Payment of compensation

Compensation shall be paid in cash or, on the basis of a written application of the depositor, in the form of a non-cash settlement through one or several Estonian credit institutions specified in a resolution of the supervisory board.

Fees relating to the payment of compensation in cash or by bank transfer shall be paid by the depositors unless otherwise agreed upon between the Fund and the credit institution making the payments. If the fee payable by a depositor for payment of compensation in cash or by a bank transfer is higher than or equal to the amount of compensation, the compensation shall not be paid. The fee charged for payment of compensation shall not exceed the ordinary fee charged by the credit institution for similar services.

Compensation for deposits nominated in foreign currencies shall be paid in Estonian kroons according to the exchange rate of the Bank of Estonia as at the date on which the deposits become unavailable.

Compensation for deposits seized pursuant to the procedure prescribed by law shall be paid after the entry into force of the corresponding judgment or ruling by a court or any other competent authority.

Term of compensation

Payment of compensation shall be commenced not later than thirty days after the date on which deposits become unavailable.

Payment of compensation shall be completed within three months after the date on which deposits become unavailable. The supervisory board of the Fund may extend the term for payment of compensation under extraordinary circumstances and with good reason. The term may be extended by up to three months at a time, but not for more than a total of nine months.

If the Fund fails to pay compensations within the term specified or pays less compensation than prescribed, the depositor has the right to file a claim against the Fund. The limitation period for filing a claim shall be five years. 

Deposits not subject to guarantee and compensation

Deposits of Estonian or foreign persons
Deposits belonging to any of the following Estonian or foreign persons as at the date on which the deposits become unavailable shall not be guaranteed or compensated for out of the Sectoral Fund:

1) the state;
2) a local government;
3) an insurer;
4) an investment fund;
5) an investment firm;
6) a management company;
7) a credit institution;
8) a financial institution within the meaning of the Credit Institutions Act;
9) a company belonging to the same consolidation group as the given credit institution;
10) a member of the supervisory board or management board or an auditor of the same credit institution or a company belonging to the same consolidation group as the credit institution, and a person holding at least five per cent of the share capital of the credit institution or a company belonging to the same consolidation group as the credit institution;
11) the spouse, child or parent of a person specified in clause 10) or a third party acting on behalf of such person.

Deposits which owner has outstanding liabilities to the credit institution
Deposits the owner of which has outstanding liabilities to the same credit institution, to the extent of such liabilities shall not be compensated for out of the Sectoral Fund;

Deposits which owner cannot be identified
Deposits the owner of which cannot be identified by the credit institution shall not be compensated for out of the Sectoral Fund.

Deposits connected with money laundering
Deposits in connection with which a judgment of conviction has been made for money laundering shall not be guaranteed out of the Sectoral Fund. Compensation for a deposit in connection with which a criminal proceeding relating to money laundering has been commenced shall be suspended until the entry into force of the court judgment.

Deposits with higher interest rate
Deposits with an interest rate which is significantly higher than the interest rate of other deposits with similar conditions and amounts in the same credit institution shall not be compensated for out of the Sectoral Fund. The maximum interest rate above which deposits are not subject to compensation shall be determined by the supervisory board in each specific case of compensation for deposits.

Deposits which owned by a legal person
Deposits owned by a legal person shall not be guaranteed and compensated out of the Sectoral Fund if, on the basis of the latest approved annual report, at least two of the following three economic indicators of the person exceed the following:

• balance sheet total – 3 650 000 euro;
• annual net turnover – 7 300 000 euro;
• average number of employees over the year – 50 people.

Deposits of Estonian branches of foreign credit institutions
Deposits of Estonian branches of foreign credit institutions which are guaranteed and compensated under a guarantee scheme of the home country of the credit institution to the same or a higher level than prescribed by the Guarantee Fund Act shall not be guaranteed and compensated out of the Sectoral Fund.

Deposits of foreign branch of an Estonian credit institution
Deposits in a foreign branch of an Estonian credit institution which are guaranteed and compensated under a guarantee scheme of the host country of the branch to the same or a higher level than prescribed by the Guarantee Fund Act shall not be guaranteed and compensated out of the Sectoral Fund.

Credit institution which are recorded under the own funds
Funds left at the disposal of a credit institution which are recorded under the own funds of the credit institution pursuant to § 72 of the Credit Institutions Act shall not be guaranteed for the account of the Sectoral Fund.