The Dutch deposit guarantee scheme
Triodos Bank in the UK is part of Triodos Bank NV which is based in the Netherlands. Most depositors of Triodos Bank both in the UK and in the Netherlands are entitled to financial compensation, should Triodos Bank default and become unable to meet its financial obligations and repay its depositors.
Because we are part of Triodos Bank NV, our UK depositors are covered by the Dutch deposit guarantee scheme, rather than being covered by the Financial Services Compensation Scheme (FSCS) in the UK.
A bank works with the money entrusted to it by account holders. In order to protect the account holders’ interests, banks are subject to a number of regulations and supervision by the regulatory body of the country in which they are based. As such, banks established in the Netherlands are subject to the strict supervision of the Dutch Central Bank, De Nederlandsche Bank (DNB).
Triodos Bank NV maintains a strong, sustainable financial position: We do not lend out more than we have on deposit, nor do we trade in the wholesale money markets. Likewise we do not trade in derivatives or other abstract financial instruments. We have not invested in sub-prime debt. Our capital and liquidity is significantly above that of the majority of banks operating in the UK and Europe.
So, the chances that you will ever have cause to revert to the deposit guarantee scheme are remote.
Even so, a Dutch regulation – the deposit guarantee scheme (formerly the collective guarantee scheme) has been in force since 1978 to guarantee account holders’ interests. This operates in a similar way to the Financial Services Compensation Scheme (FSCS) operated by the Financial Services Authority (FSA) in the UK.
The Dutch 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.
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 (equivalent to approximately £86,303.62 as at 1 March 2013*) per person per institution, regardless of the number of accounts.
Where two people have a joint account, either account holder 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 typically 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.
(In the case that this would ever happen to Triodos Bank, we would also undertake further communication with our UK depositors, such as sending them letters, emails and providing information on our website, etc.)
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.
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.
For further information please call us free on 0800 328 2181 or refer to the Dutch Central Bank, De Nederlandsche Bank (DNB)
*Based on GBP to Euro rate of 1.1587
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: Triodos Bank, Deanery Road, Bristol BS1 5AS.