Bank Deposits Reach 284 Bln RON In End-March, Up 5.6% In 3 Months

Ana Săbiescu

The overall value of guaranteed and non-guaranteed deposits in the Romanian banking system reached 284.16 billion RON at the end of March, up by 5.6% from end-2008, according to Alexandru Matei, Deputy Director of the Banking System Deposit Guarantee Fund.

The 32 banks that are members of the Guarantee Fund reported overall deposits of 268.58 billion RON at the end of Q1-2009, up by 4.8% compared to the end of 2008. The figure indicates that 94.5% of the overall volume of deposits in the Romanian banking system is placed in Fund member banks.

At the end of Q1, Fund-guaranteed deposits reached 44.65% of the overall volume of deposits in the system, that is, 119 billion RON. The remaining 148.7 billion RON is not guaranteed. Deposits made by individuals account for 72.8% of the guaranteed deposits, up by 2.7 percentage points from end-2008. The remaining part represents deposits made by enterprises.

The Fund guarantees deposits made by individuals and legal entities with the banks that are members of the guarantee scheme. Deposits are guaranteed within the limit of 50,000 EUR in RON equivalent for individuals and 20,000 EUR in RON equivalent for legal entities. Plans are to increase the limit for legal entities to 50,000 EUR as of H2-2009. At the end of March, the guarantee scheme comprised 32 lending institutions, including 28 banks and 3 mortgage banks.

By the end of March 2009, approximately 83% of the overall number of guaranteed deposit owners was concentrated with 7 lending institutions members of the Fund. Some 80% of the overall value of guaranteed deposits was concentrated also in seven banks members of the Fund.

According to the law, the State does not guarantee individual or corporate deposits if the owners negotiated an interest rate much above the rate card for large sums of money and thus "contributed to the aggravation of the bank"s financial condition" in case of bankruptcy. The Banking System Deposit Guarantee Fund also does not guarantee the sums deposited in a bank by the bank"s directors, managers, trustees, auditors, significant shareholders and their families.