Bulgarian Deposit Insurance Fund Overview and Functions

The Bulgarian Deposit Insurance Fund is a crucial institution that protects depositors' interests in the country. It was established in 1997.

The Fund's primary function is to guarantee deposits up to a certain amount, currently set at 100,000 BGN (approximately 50,000 EUR). This means that if a bank fails, depositors will be reimbursed for their insured deposits.

The Fund receives premiums from banks to cover potential claims. In 2020, the Fund collected 23.4 million BGN (around 11.7 million EUR) in premiums from participating banks.

The Bulgarian Deposit Insurance Fund (BDIF) was established under the Law on Bank Deposit Guarantee and has been functioning since January 1999.

It's a legal entity with a clear purpose: maintaining the stability of the banking system and public confidence in it.

One way the BDIF achieves this is by determining and collecting annual premium contributions from all banks participating in the deposit insurance system.

These contributions help the BDIF fund its activities and ensure that it can fulfill its duties.

The BDIF invests its funds in low-risk and highly liquid securities issued by first-class issuers, and deposits with the Bulgarian National Bank (BNB).

This responsible investment strategy helps the BDIF generate returns while minimizing risk.

In the event of a bank failure, the BDIF repays in-full the insured deposit amounts of physical persons and legal entities up to the statutory limit.

This provides a crucial safety net for depositors and helps maintain trust in the banking system.

Here are the BDIF's main functions:

The Bulgarian Deposit Insurance Fund (BDIF) is a crucial safety net for depositors in Bulgaria. It guarantees full repayment of deposits up to BGN 196,000 (including accrued interest) for each depositor per bank.

For certain types of deposits, such as those related to real estate transactions, divorce, or insurance payments, additional protection is provided up to BGN 250,000 (EUR 127,823) for a term of three months.

Here's a list of banks whose deposits are insured by the BDIF:

Some branches of banks from EU Member States are also protected by the BDIF, but only up to the amount guaranteed by the home country scheme. Here are a few examples:

The Bulgarian Deposit Insurance Fund (BDIF) has a Management Board that oversees its operations. Matey Matev serves as the Chairman of the Board.

The BDIF Management Board consists of five members, each with a specific role in the decision-making process. Nelly Kordovska is the Deputy Chairwoman, and Irina Martseva, Borislav Stratev, and Valery Dimitrov are also members.

Here is a list of the BDIF Management Board members:

The BDIF Management Board plays a crucial role in overseeing the organization's operations.

Matey Matev serves as the Chairman of the board, providing strategic direction and leadership.

Nelly Kordovska is the Deputy Chairwoman, supporting the Chairman in their duties.

The board also consists of three members: Irina Martseva, Borislav Stratev, and Valery Dimitrov.

Here is a list of the BDIF Management Board members:

BDIF's commitment to international cooperation is evident in its membership in several key organizations.

BDIF is a founding member of the International Association of Deposit Insurers (IADI). This membership demonstrates the organization's dedication to staying up-to-date with best practices in deposit insurance.

The European Forum of Deposit Insurers (EFDI) is another important organization that BDIF is a part of. This membership allows BDIF to engage with other deposit insurers and regulators from across Europe.

Here are some key facts about BDIF's international organization membership:

The Bulgarian Deposit Insurance Fund (BDIF) is the legal authority responsible for operating the domestic deposit guarantee scheme in Bulgaria. This scheme is designed to protect account holders in the event of a bank or credit institution failure.

The main objective of the deposit guarantee scheme is to maintain stability and confidence in the financial system by assuring depositors that their funds are secure, up to a predefined coverage limit. Deposit insurance serves as a financial safety net for depositors.

The need for deposit insurance arises from the potential impact of bank failures on individuals and the overall economy. When banks fail, account holders may lose their savings, which can lead to a loss of confidence in the banking system and trigger bank runs.

The BDIF is a member of the European Forum of Deposit Insurers (EFDI), which aims to foster cooperation and exchange of knowledge among deposit insurers in Europe. This membership helps the BDIF stay up-to-date with best practices in deposit insurance.

The BDIF has a clear organizational structure, with a Management Board and a Supervisory Board. The Management Board is responsible for the day-to-day operations of the BDIF.

The contact information for the DGS Administration in Bulgaria is readily available. You can reach them at +359 2 953 12 13 or visit their website at https://www.dif.bg/en.

The Bulgarian Deposit Insurance Fund (BDIF) has received a significant boost in its capacity and financial stability thanks to a EUR 300 million financing from the World Bank. This financing will help rebuild BDIF's reserves after the fourth largest commercial bank failure in 2014.

The World Bank support will help alleviate pressure on the state budget and maintain confidence in Bulgaria's banking system. This is crucial for depositors, as it will enable them to have faith in the system and encourage a steady increase in domestic savings.

The project aims to strengthen the funding structure and increase the level of BDIF's reserves, making the Deposit Insurance Fund more financially independent and sustainable. This will allow BDIF to successfully implement its legal obligations.

The World Bank's support will have a positive impact on maintaining the confidence of depositors, making the banking system more resilient to possible shocks. As a result, a steady increase in domestic savings can be mobilized for productive uses, leading to increased growth and job creation.

The Deposit Guarantee Scheme in Bulgaria is a safety net for depositors, ensuring that eligible account holders at local banks are protected in case of a bank failure. The Bulgarian Deposit Insurance Fund (BDIF) reimburses insured deposits up to BGN 196,000 (approximately 100,000 Euro).

Additional protection is provided for a limited time, allowing for up to BGN 250,000 (approximately 127,823 Euro) to be covered for a term of three months. This extra protection applies to specific types of deposits, such as those related to real estate transactions, inheritance, or insurance payments.

Deposits held by natural persons and companies at banks licensed by the Bulgarian National Bank (BNB) are secured by the BDIF when they become unavailable. This means that if a bank fails, the BDIF will step in to repay eligible depositors.

The claim filing and repayment procedures are announced by the BDIF at least two days prior to the payout process. Repayment of the insured balance is made within seven business days after the claim is filed and approved, and eligible creditors are repaid in cash or by bank transfer.

Repayment conditions state that the BDIF repays insured deposits in its local currency, the Bulgarian lev. This is an important consideration for depositors who may have accounts in foreign currencies.