The deposit guarantee scheme
A bank works with the money entrusted to it by account holders. Partly in order to protect the account holders’ interests, banks established in the Netherlands are subject to the strict supervision of the Dutch Central Bank, De Nederlandsche Bank (DNB).
Dutch banks traditionally rank among the most solid banks in the world. The chances that a Dutch bank would be unable to meet its obligations are very small indeed. Even so, a regulation – the deposit guarantee scheme (formerly the collective guarantee scheme) has been in force since 1978 to guarantee account holders’ interests.
The deposit guarantee scheme protects private individuals and small businesses having deposits with a bank that is under the supervision of De Nederlandsche Bank (DNB). Although banks in the Netherlands are under the supervision of DNB, the possibility that a bank may come into financial difficulties cannot be excluded. In such a case, the deposit guarantee scheme ensures a minimum level of protection for deposits that private individuals and small businesses hold with banks.
Which banks?
All Dutch banks that operate under a licence from DNB are covered by the Dutch deposit guarantee scheme. Triodos Bank NV (incorporated under the laws of the Netherlands with limited liability, registered in England and Wales BR3012) is authorised by the Dutch Central Bank (DNB) and regulated by the Financial Services Authority (FSA) for the conduct of UK business.
Who can invoke the deposit guarantee scheme?
In brief, the deposit guarantee scheme may be invoked by private individuals and small businesses (i.e. businesses which may publish an abridged balance sheet). Exceptions include private individuals who are management board members of the defaulting bank or shareholders who have an interest of 5% or more in the defaulting bank (or a group company of the defaulting bank), or their immediate family members. Professional market participants and professional investors such as banks, insurers, pension funds, other undertakings and government bodies cannot invoke the deposit guarantee scheme. They must decide for themselves whether their funds are deposited with a solid bank.
What deposits are guaranteed?
In brief, credit balances on accounts and debts due in the name of the customer (e.g. amounts shown in savings books and registered bonds) are eligible for reimbursement under the deposit guarantee scheme.
Shares, other capital belonging to the bank's own funds and bearer bonds are not covered by the deposit guarantee scheme. Other types of claim are not eligible for reimbursement.
Up to what amount?
The deposit guarantee scheme guarantees an amount not exceeding €100,000 per person per institution, regardless of the number of accounts.
Where two people have a joint account, either accountholder can claim payment under the deposit guarantee scheme. The maximum joint deposit covered is €200,000.
When is it paid?
Compensation under the scheme is provided within 20 working days after DNB has established that a bank is unable to repay the funds entrusted to it. DNB will place advertisements in Dutch newspapers and also in newspapers of countries in which the Banks branches are located inviting account holders to file a claim for compensation.
Who pays for the deposit guarantee scheme?
DNB makes the payments under the deposit guarantee scheme and, subsequently, charges the amount paid on to the participants (i.e. other banks) in the scheme, in proportion to the size of their business.
Finally
The chances that you will ever have anything to do with the deposit guarantee scheme are very remote. Still, as a (prospective) account holder, you need to be informed about the regulations. This webpage aims to provide this information. This information is not legally binding, and any claims would need to be based on the formal regulations.
Triodos Bank NV (incorporated under the laws of the Netherlands with limited liability, registered in England and Wales BR3012). Authorised by the Dutch Central Bank (DNB) and regulated by the Financial Services Authority (FSA) for the conduct of UK business. Registered Office: Brunel House, 11 The Promenade, Bristol BS8 3NN. ©Triodos Bank NV 2011.