The Austrian universal banking system is diversified. It includes traditional banks, joint-stock companies, savings banks, credit institutions, Volksbanken and Raiffeisen banks. These different specializations allow for tailored approaches to bank resolution and recovery. As a result, several deposit guarantee schemes exist to ensure efficient and effective reimbursement of eligible deposits. Deposit guarantee schemes are divided between uniform and contractual deposit guarantee schemes and recognized institutional protection schemes. For account holders and other creditors of financial institutions in Austria, deposit protection provides a safety net during times of crises.
Deposit Guarantee Scheme (Austria): The Austrian Deposit Guarantee Schemes and Investor Compensation Act (ESAEG) is a Federal Act that regulates the protection of bank deposits and investments held with financial institutions in Austria.
Secured Deposit Limit: 100.000 euro for eligible deposits per depositor and institution.
Temporarily Covered Balances: Eligible deposits over the amount of 100.000 euro up to the amount of 500.000 euro may be deemed covered deposits under special circumstances.
Claim Eligibility: The Austrian deposit guarantee schemes repay credit balances up to the secure limits that are held with member institutions in Austria when a payout event occurs. Payout events are confirmed by the FMA when the member institution is unable to repay account balances to its account holders. Natural and legal persons are covered under the Austrian DGS schemes unless their deposit is excluded under article 10 of the ESAEG.
Claim Filing Procedure: Upon failure of their financial institution, account holders are informed by the DGS fund and the bank that a payout event occurs. Account holders do not have to apply to the scheme but are asked to provide claim evidence to verify claim eligibility and a payment instruction. Account holders with balances that exceed the standard level of coverage must apply to the scheme within twelve months after the payout event occurred.
Claim Submission Timeframe: To ensure swift repayment of the insured deposits, the Austrian deposit guarantee schemes collect the necessary information and customer data from their member institutions. The DGS takes the appropriate measures to be in a position to verify claim eligibility and the repayment amounts. Covered deposits are made available within seven working days. Claims for temporarily covered deposits must be submitted within 12 months. This however is a soft deadline and claims submitted after this time do not expire.
Repayment Conditions: Only eligible deposits are repaid. Payment is made in euro by bank transfer or check exclusively to the account holder. Excluded from coverage are deposits held by legal persons whose income is derived from financial transactions, investment and insurance. Also, account holders and claimants who have never been identified and creditors who are convicted for money laundering are excluded from coverage.
DGS Claim Rejections: Not all DGS claims are eligible. Claims that cannot be verified and those that do not qualify by default are rejected. Reinspection is possible for claims that can be substantiated. Courts may intervene where creditors feel wronged.
Financial Architecture and structure of the Austrian DGS: The DGS funds operate as a paybox function between the failed bank and its account holders. DGS membership in Austria is obligatory for licensed and supervised deposit taking credit institutions. Members make contributions to the fund. These contributions contain standard membership fees, risk based premiums and extraordinary contributions. The reserves held by the fund are used to repay eligible creditors within 7 working days.
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