Deposit Guarantee Scheme of the Netherlands

Although a relatively small country, the Netherlands is considered, in terms of GDP, one of the top 20 economies in the world. Its stable, prosperous and open economy heavily relies on foreign trade and services. The financial sector is substantial with a focus on retail banking for the domestic market and corporate activities for a comprehensive group of local professionals and international businesses. To protect and strengthen the stability of the economy and sustainable prosperity of the country, the Deposit Guarantee Scheme provides bank account holders with an alternative protection of their account bank account balance.

Deposit Guarantee Scheme of the Netherlands: The Central Bank of the Netherlands (DNB) administers the DGS on behalf of the Dutch Government.

Secured Deposit Limit: 100.000 euro per person, per bank unless the account is held by a government organization or financial firm, or local regulation excludes the deposit from coverage.

Additional Coverage: 500.000 euro per person, per bank for personal real estate transactions. Additional coverage is limited to a three month period after the deposit is made. Investment accounts are covered under the Dutch Investor Compensation Scheme (ICS) up to 20.000 euro per person, per institution.

Payout Event: The Dutch Deposit Guarantee Scheme is activated when DNB, the financial regulator of the Netherlands, determines that a deposit taking credit institution is unable to repay the account balances by its creditors, or when bankruptcy is declared by the court.

Information Provisioning – Different Approaches for Different Creditors: All account holders of a failed financial institution in the Netherlands are informed by DNB about the steps to take to apply for deposit insurance protection.  Distinctions are made between local residents and tax payers, businesses and international account holders. Natural persons in the Netherlands have electronic access to most government services via their personalized ‘DigiD’. Businesses and foreign account holders are informed by DNB on the exact claim filing procedures.

General Claim Filing Procedure: Account holders of a failed bank are informed by the bank itself and DNB. The official website of DNB reveals that a payout event takes place and that account holders will be contacted by DNB as the administrator of the scheme. Shortly after, DNB sends all eligible account holders a letter that outlines actions to be taken. Reimbursement is only effectuated to the another account of the account holder at another bank. Within seven days, an online portal is opened by DNB, accessible via DigiD. The protected online environment allows the creditor to submit claim evidence and a repayment instruction.

Claim Submission Timeframe: The scheme is open for a period of three months after its first announcement.

Repayment Timeframe: Efficient administrative procedures allow the scheme to reimburse eligible creditors within a matter of days after the claim is correctly submitted and approved for payout. A deadline for repayment is set at seven working days.

Repayment Conditions: The Deposit Guarantee Scheme of the Netherlands exclusively protects account deposits held with members of the scheme. These include payment accounts, savings accounts and joint accounts of natural persons and businesses. Government organizations and financial firms are excluded from coverage.

Claim Rejection: Most account deposits and creditors are covered under the Dutch Deposit Guarantee Scheme. Claims can therefore be rejected. Administrative deficiencies, and Insufficient and incorrect information may lead to unnecessary claim rejection. Creditors who feel wronged by the decision of the DGS administration may request a reinspection of their case or take their claim to the appropriate court. It is recommended to provide sufficient evidence of claim ownership and eligibility to ensure a positive result.

Financial Structure: The Deposit Guarantee Scheme of the Netherlands is not a government guarantee. The scheme is managed by DNB and paid for by supervised and licensed deposit taking credit institutions in the Netherlands. The fund currently holds around 3 Billion euro available for distribution to eligible creditors of failed financial institutions. Premiums are paid to the fund on a quarterly basis by its members.

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