What does prohibition on debit transactions in the client accounts mean? What should the depositors and clients having money in ABLV Bank AS do?
Currently, the clients temporarily have no access to their money neither in the branches of the bank nor through online banking; bank’s card system is switched off as well, therefore the clients neither can make banking payment cards payments nor withdraw the money from ATMs. Transfer of the bank’s client securities to other banks is not banned.
• When is FCMC planning to start the pay-out of guaranteed compensation to the clients of ABLV Bank?
• How will disbursement of guaranteed compensation be carried out?
UPDATED INFORMATION REGARDING OF DISBURSEMENT OF GUARANTEED COMPENSATION: http://www.fktk.lv/en/media-room/press-releases/6913-citadele-bank-will-pay-out-state-guaranteed-compensation-to-ablv-bank-clients-disbursement-will-begin-on-saturday-march-3rd.html
• What amount will be disbursed to each bank’s client?
Up to 100 000 euro are guaranteed to each eligible client per each Latvian bank, ensuring disbursement from the Deposit Guarantee Fund in case of unavailability of deposits. The funds have been accumulated, managed and paid out by the FCMC.
• What types of client assets are covered by guaranteed compensation?
Compensations are paid for all types of deposits in all currencies in the amount not exceeding EUR 100 000 for all of accounts together, including accounts opened with branches of bank. The amount guaranteed by the State is applicable to deposits, current account balances, salary accounts, savings accounts, etc. The full amount is disbursed for the deposits that do not exceed EUR 100 000.
• Does the calculated compensation include also interest?
Yes, interest profit is part of the compensation amount, including the interest calculated until the date of occurrence of unavailability of deposits, provided that the total amount does not exceed 100 000 euro. (for example, deposit of clients amounts to 99,000 euro and accrued interest until the date of unavailability of deposits are 1,500 euro, then client will receive 100,000 euro (99,000+1,000 (interest)), however, 500 euro will not be paid out from DGF. The fact of unavailability of deposits confirmed on 23.03.2018).
• What will be the currency of payable compensation?
According to law guaranteed compensation is payable in euros. In case deposits were in other currencies, they will be converted to euro.
• Will currency exchange losses be compensated?
Laws and regulations do not provide for such compensation.
• Who is eligible for guaranteed compensation up to EUR 100 000?
Guaranteed compensation up to EUR 100 000 applies to all clients of the bank, both natural and legal persons, either residents or non-residents. Guaranteed compensation applies also to the bank accounts of Latvian central and local governments (if the budget of relevant institutions does not exceed EUR 500 000).
• Is guaranteed compensation applicable also to EUR 1?
If a deposit is less than EUR 10 and in two years before 23.02.2018. (date on which unavailability of deposits occurred) no transactions have been carried out, a client is not eligible to compensation. Exemptions regarding deposits that do not qualify for the disbursement of guaranteed compensation are laid down in Section 23 of the Deposit Guarantee Law.
• Does guaranteed compensation apply to a subordinated debt to the bank?
No, subordinated debt is one of exemptions not qualifying for guaranteed compensation. Further details in Latvian: http://www.klientuskola.lv/lv/finansu-pakalpojumi/7-subordinetie-ieguldijumi.html;
• How will be determined the payable amount?
The Bank’s accounting records maintain information about all the clients eligible for guaranteed compensation and the amount of their deposits. This information base has been monitored and verified also by the FCMC.
• Is it possible to receive larger guaranteed compensation and who is eligible for this?
Yes, there are certain types of transactions where the natural persons involved are eligible to apply for additional compensation (up to EUR 200 000), i.e. together with standard compensation up to EUR 300 000. For example, in case the funds transferred in the account over last three months were derived from transactions with residential immovable property, state social security benefits, compensations for damages of a criminal nature or for wrongful conviction.
• What should a client do to receive additional compensation?
To receive additional compensation, a client has to submit an application to the bank and supporting documents that the deposit meets above criteria.
• Will a client receive guaranteed compensation if the bank account is seized?
No, guaranteed compensation applies only to the amount that was available to the client (not seized) on the date of occurrence of unavailability of deposits. If a sworn bailiff or tax (duty) administration has started the enforcement procedure against the depositor on cash recovery, the recoverable amounts up to the guaranteed limit of EUR 100 000 will be disbursed to the sworn bailiff or the tax (duty) administration, respectively. If after settlement with bailiff or tax administration, part of the seized amount is waived, a client will be able to receive remaining guaranteed compensation later. In this case a five-year limitation period (during which guaranteed compensations may be received) starts from the day when guaranteed compensation or part of it has become freely available to the client.
• By what date will guaranteed compensations be paid?
Depositors will have the right to receive guaranteed compensation for five years of the date of occurrence of unavailability of deposits.
• How many bank clients will receive compensation guaranteed by the State?
Current estimates show that about 22751 persons (both natural and legal persons).
• What will happen with the funds transferred into the client account on the next day after the 23.02.2018. decision by FCMC on imposing restrictions on the activities of bank?
All the clients that meet the criteria for clients eligible for guaranteed compensation, regardless of when the funds were transferred into the account, are eligible for guaranteed compensation up to EUR 100 000.
• How much funds are accumulated in the Deposit Guarantee Fund (DGF)?
Currently, there are 158 million euro.
• How much funds will be required from the Deposit Guarantee Fund for payments of guaranteed compensations to depositors of the bank?
According to our estimates about 470 million euro are required for payment of guaranteed compensations. ABLV Bank has enough liquid assets to ensure repayment of the amount to the DGF in full.
• What should other clients, whose deposits with the bank exceed EUR 100 000, do?
Please follow information on the further decisions by the ECB and FCMC.
• What should ABLV Bank borrowers do?
These clients have to fulfil their obligations. While the conditions of the loan agreement are met, no one is entitled to implement changes in those conditions or make the borrower to repay the loan before the set term. The client should not worry as long as he is fulfilling his obligations according to the loan agreement. Information on the possibilities to make repayments in cash at the client service centres or the another bank’s account, including credit card and overdraft repayment, is available on the website of the bank, as well as information is being upgraded on the FCMC website.
ABLV Bank information for customers on order of returning loans
Starting from 26.02.2018, all clients shall be conducting repayment of their loans to the Cash Department of the bank in cash or via bank transfer from another bank in EUR currency to a unified account of ABLV Bank, AS for loan settlements as follows:
If the currency of the obligations is any other than euro, then the incoming payment shall be converted to the currency of the loan on the day of settlement in accordance with the bank’s exchange rate.
ABLV Bank information on order of returning loans:
• What should other clients delaying their payment do?
The State Revenue Service (SRS) makes advances to the clients of ABLV Bank – applies no fines and considers extending payment terms. The bank’s clients have to submit applications to the SRS justifying delay in payments under condition that the client has the sole account with ABLV presenting a copy of account statement evidencing the funds in the account.