BANK DEPOSITS UP TO BGL10,000 SHALL BE GUARANTEED BY THE STATE
More than 95% of private and corporate deposits in banks will be protected. Parliament approved at first hearing the Bill on Amendments and Supplements to the Act for Guaranteeing Bank Deposits, under which the Bank Deposit Insurance Fund will be paying all deposits in bankrupt banks, which do not exceed BGL10,000. Presently, this gurantee covers deposits up to BGL6,900.The increase of the overall amount of the risk-free guarantee will make a lot of people, keeping their savings beneath the mattresses, to put them on accounts in Bulgarian banks, the Chairman of the Fund's Management Board Mileti Mladenov believes. Ivan Iskrov, Chairman of the Parliamentary Budgetary and Finance Commission, specified that about 95% of the deposits in local banks are up to BGL10,000. He underlined that by raising the guarantee ceiling Bulgaria would approximate the requirements of the European Union, where all deposits up to EUR20,000 are protected. The projected amendments were supported by the parliamentary group of the Union of Democratic Forces (UDF) as well. It's true that in the US, for example, deposits up to USD100,000 are protected. But if the guarantee ceiling is too high, it will not have a disciplinary effect on the local banking system, former deputy minister of economy Petar Zhotev said. People will stop caring for their money's safety and will deposit it in banks, offering the highest interest rates, which could lead to problems, Mr. Zhotev added. Records currently show that all banks are making their payments to the Bank Deposit Insurance Fund without problems and it disposes of sufficient resources to cover the higher payments to depositors if necessary. Of course, it would be better not to spend this money, i.e. not to close banks, which is an entirely achievable purpose at present, Mr. Mladenov commented.