Deposit Guarantee Scheme FBME

Finally after almost two years of uncertainty in April 2016 the Deposit Guarantee Scheme for FBME Bank was activated by the central bank of Cyprus. The central bank of Cyprus is in her controling function to reduce risk for bank depositors responsible for the management and, when needed, the activation of the DGS.

The Deposit Guarantee Scheme is in Cyprus named the Deposit Protection Scheme. It is an external insurance funded by premiums paid by participating banks or branches of internation banks with an entity in Cyprus. The premiums paid are based on the risk profile of the bank and the amount in individual deposits. If during a fixed term no bank failure takes place and the Deposit Protection Scheme does not have to pay out, premiums are added to the reserve in order to generate more collateral for the future.

The case with FBME Bank is different as what we experience in many other bank failures. Usually the identification of the account holder is done by an employee of the Deposit Guarantee Scheme, often employed by the central bank, who is accompanied by a police officer and has direct access to an (assistant) prosecutor. If needed authorities can be informed straight away and before in worse case scenarios an arrest can be made on the spot. This happens when accuations of fraudulent behavior or criminal activities are severe.

The Deposit Guarantee Scheme does not pay out if there is suspicion of fraud. Also when the beneficial owner is not traceable or not alive anymore, the DGS cannot pay out. In the regular liquidation phase these bank customers or the heirs can file their claim at this stage.

For more information on filing a claim at the Cyprus Deposit Protection scheme for FBME Bank Cyprus customers, please follow this link. You will be guided through the complete process on the basis of no cure no pay.