Compensation

When a financial institution (bank or saving and credit association) due to inability to pay deposits of depositors on time or in the near future, as a result of the deterioration of its financial situation, is placed in liquidation, by the decision of the Bank of Albania, the deposit insurance scheme is immediately enabled and ADIA administers the compensation process of the depositors.

Deposit compensation payment procedure.

If you are notified by the media or other sources of information that the bank or savings and credit association where you have placed your savings has closed, you should not worry! You can follow the news or visit our website to get timely and accurate information about the compensation procedure.
In accordance with the Law on Deposit Insurance, as soon as the Bank of Albania officially announces the decision that a financial institution (bank or credit union) has been put into liquidation and thus cannot pay its obligations to its depositors, ADIA is due to anticipate the beginning of the payment process within a framework of 90 working days. During this period of time, ADIA will prepare the necessary sources of funding, will receive the exact amount of compensation for each depositor from the bankrupt financial institution (bank or credit union) and will notify the public with detailed information about:

the beginning date of the payout process

the agent bank where the compensation amounts can be withdrawn

the documents you need to submit to exercise your right, a valid identity card or passport or any other document that prove your right to claim the deposit compensation

how to and where to present possible complaints related to the compensation process

According to the instructions given by ADIA official announcements, you must be physically present at the bank branches specified in the notice, with your ID card. There you will receive an automatically generated document with information on the exact amount of compensation, based on the data received from the bankrupt financial institution (bank or credit union). You must check the accuracy of the data and if there is no contestation, you will sign the Certification for the payment of the compensation. Compensation is paid immediately, as soon as you sign the Certification of Compensation Payment.
Compensation can be received by bank transfer or in cash. For more security and effectiveness, it would be preferable to receive the compensation amount by bank transfer.
The deadline for compensation payment is postponed, for deposits that require time to correctly determine the owner and their amount such as ongoing complain procedures, inheritance case, prevention of money laundering and financing of terrorism, seizure cases or implementation of decisions of administrative and judicial bodies, etc.
If you do not agree with the data stated in the Compensation Form, you can start the complaint procedure. It is enough to fill in the complaint form and submit it to the Agency, with due details, necessary explanations and required documentation attached. Appointed structures within the ADIA will carry out verifications to ascertain the accuracy of the compensation amount as soon as possible and will take the decision on the compensation to be paid.

Depositors have a time limit of 10 years to withdraw the compensation amount.

If the deposit is higher than the maximum level of deposit insurance, i.e. higher than 2,500,000 All for deposits in banks and 2,000,000 All for deposits in savings and credit associations, the overdue amount must be requested from the financial institution placed in bankruptcy or liquidation proceedings.

When is a deposit compensated?

According to the law “On Deposit Insurance”, a regular and payable deposit is compensated, in case a financial institution, member of the insurance scheme, has not the financial disponibility to pay it. The compensation of the insured deposit is the monetary value recognized or paid to the depositor in case of the insurance event, in accordance with this law.

Compensation process

The Deposit Insurance Agency is the only institution that compensates the deposits of depositors of banks/Sca’s that carry out their activity in the territory of the Republic of Albania.
The compensation procedures begin immediately when the Agency is notified in writing by the Supervisory Authority of the placement of the member institution, in liquidation. The agency publishes an official notice on the beginning of the compensation process and the place and time for the compensation of deposits, within 3 days after the written notification from the Bank of Albania.
The depositor or his representative has the right to receive the information directly at the premises of the institution placed in forced liquidation, in the union of SCA’s or in the agent bank. The agent bank or the union of SCA’s that will carry out the compensation process is determined by the decision of the Agency’s Board of Directors, in accordance with the terms of reference, proposed by the Agency and approved by the Bank of Albania.
In accordance with the “Deposit Insurance” law, the Compensation Process ends no later than three months from the initiation date. After the legal term of the compensation process, any depositor, who for certain reasons, has not been compensated in accordance with the requirements of this law, can be presented within 10 years from the insured event to the Agency to claim the amount of compensation.

Forms of payment

The Agency may compensate the insured deposit through one of the following ways:

payment of the amount in All directly to the person in the premises of the subject placed in liquidation in cooperation with the liquidator

payment of the amount in All to the person in the premises of a member bank of the scheme (agent bank)

the transfer of the amount due to the depositor to one of the other banks, member of the deposit insurance scheme

payment by check; other payment methods foreseen in the by-law of the Supervisory Authority

Each depositor will be compensated for the amount of 2,500,000 ALL for each bank and 2,000,000 ALL for each saving and credit association. All deposits in foreign currency will be converted into All at the official currency exchange rate of the Bank of Albania, on the day the institution goes into liquidation. For Depositors who have overdue payments to the bank/Sca’s (arrears of loan installments, children’s pension, etc.), all sum will be deducted from the amount of the legal compensation.

Documentation that all bank depositor must have:

Identification document

Deposit certificate

Any other document proving the deposit compensation claim

The most frequently asked questions

What are the types of deposits compensated by the Agency?

The agency secures the deposits of individuals, traders and legal entities in banks and SCA. These are monetary values deposited in current and SCA, term and non-term deposits, debit card accounts, etc.

Which deposits are excluded from deposit insurance and compensation?

In accordance with the Law “On deposit insurance”, the following are excluded from insurance and compensation in the event of an insurance event:

a) the part of the deposit above the maximum level of coverage (2,500,000 ALL for deposits in banks and 2,000,000 ALL for deposits in savings and credit companies);

b) deposits under the value of 100 ALL;

c) deposits placed in the name or on account of financial institutions licensed by the Bank of Albania and the Financial Supervision Authority;

d) deposits of the director, bank administrator and their family members, according to the family status certificate;

e) deposits of shareholders of the bank or savings and SCA that own shares of 5 percent or more in the capital of these entities that are members of the deposit insurance scheme;

f) deposits derived from activities related to money laundering and terrorist financing, which have been declared illegal by a final court decision;

g) deposits of insurance and reinsurance companies, domestic or foreign;

h) deposits of business entities or collective investments, local or foreign;

i) deposits of pension funds or pension insurance, domestic or foreign;

j) titles issued by financial entities and any other type of obligation that these entities have based on their pledge agreements;

k) deposits of central or local government units, as well as any public entity of the Republic of Albania or a foreign country;

i) unnamed deposits and/or the title of which is not clearly defined;

m) deposits placed in the member entity of the deposit insurance scheme during and after the day of the insurance event in this entity;

n) deposits of the members of the management bodies of the savings and credit company, according to the provisions in the law on SCA, except for the general assembly;

o) deposits of legal entities, except for those defined in point 17, article 3, of the law “On deposit insurance”.

What are the entities whose deposits are compensated?

All banks and SCA licensed by the Bank of Albania and members of the deposit insurance scheme.

How does compensation work?

In the case when a bank or SCA, due to financial impossibility, does not make their deposits available to depositors according to the terms of the contract, the Bank of Albania places this financial entity in forced liquidation. This decision is announced publicly. Upon receiving the notification, the Deposit Insurance Agency receives from the bankrupt subject the necessary data for calculating the amount of compensation and calculates the amount for each depositor. A bank is selected through which the compensation payments will be made and the relevant data is transmitted to this bank.

The Deposit Insurance Agency informs the public through means of public communication when and how the compensation process will be carried out. Importantly, depositors do not have to take any action. It is not necessary to contact the bank or the SCA placed in forced liquidation or the Deposit Insurance Agency. Depositors only need to present themselves with an identification document at the counters of the bank through which the compensation payments will be made and receive the compensation payment according to the legal provisions.

Who calculates the compensation amount?

The amount of compensation is calculated and paid by the Deposit Insurance Agency in accordance with the data registered in the bank or SCA on the day of the placement in forced liquidation by the Bank of Albania. Entities placed in forced liquidation or managers placed for their administration are responsible for the authenticity of the data and their timely transmission to the Deposit Insurance Agency.

How is the compenstation amount calculated?

The amount of the compensation payment is calculated and paid in ALL.

Depositors’ compensation payment is calculated as follows:

In calculating the amount of deposit compensation payment for a depositor (including individual, trader and legal entity), the sum of all legally insurable deposits, in all currencies held by the depositor in a bank or SCA, is considered , including interest accrued but unpaid on the day of the insurance event. This amount is deducted from the unpaid obligations that the depositor has towards the financial institution placed in forced liquidation.

If the classified deposit for compensation is kept in a joint account, it is divided to each co-owner in equal parts, except for cases where it is stipulated otherwise in the agreements or contracts between the parties.

The amount of the deposit for compensation is equal to the amount of deposits accepted by the insurance law that the depositor has in the bank or SCA on the day of the insurance event (the placement of this financial institution in forced liquidation by the Bank of Albania) , but cannot exceed the amount of 2,500,000 ALL for deposits in banks and 2,000,000 ALL for deposits in SCA.

If the depositor has deposits in ALL and in foreign currency, how is the compensation made?

In case of compensation, deposits in foreign currency are converted into ALL, at the official exchange rate, on the day the bank or SCA is placed in forced liquidation.

How is deposit compensation obtained for depositors who are not present in the Republic of Albania?

Deposit compensation can be obtained through the presentation of general or special powers of attorney. In addition, the time limit within which depositors can appear to withdraw the deposit compensation amount is 10 years.

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