Socialist MP Backs Faster Deposit Repayment for Supervised Banks

Finance | July 30, 2014, Wednesday // 13:59|  views

BSP MP Yanaki Stoilov, photo by BGNES

The Bulgarian Socialist Party proposes that the Bulgarian Deposit Insurance Fund start repaying deposits of up to EUR100 000 two months after the suspension of activity of a bank.

BSP MP Yanaki Stoilov explained Wednesday that the party had submitted changes to the Bank Deposit Guarantee Act as a result of the adoption of the budget update at the first reading with the support of center-right party GERB (Citizens for European Development of Bulgaria) and liberal party Movement for Rights and Freedoms (DPS).

Stoilov, as cited by, emphasized that the budget update envisaged an increase in the government debt by BGN 3.4 B, meaning that a sum of BGN 1.7 B could be earmarked for boosting the resources of the BDIF.

Before Tuesday's vote on the budget amendments in Parliament, he had warned that his party would embark on the step if the bill was passed.

However, Stoilov's comments came before the announcement of GERB leader Boyko Borisov that GERB was leaving Parliament and the budget update would not be adopted conclusively before the dissolution of the current National Assembly on August 6.

"The legal changes oblige the BDIF to start repaying guaranteed deposits to all people who are legally entitled to it, after a certain banking institution has been placed under special monitoring for over two months and it has suspended activities," Stoilov said.

He added that the provisions were applicable to Bulgaria's Corporate Commercial Bank (KTB), which was placed under conservatorship by the Bulgarian National Bank on June 20.

The socialist MP argued that it was unnecessary to wait for the bankruptcy procedure to end and the depositors of KTB could claim their money from the BDIF on September 21 instead.

He emphasized that, regardless of the launch or a stabilization procedure or a bankruptcy procedure for a bank, it would still owe the money to the BDIF, which had paid depositors.

Stoilov explained that the changes would allow thousands of depositors to access their money several months earlier than the existing deadline.

The BSP MP admitted that the bill was unlikely to be approved by the current Parliament but added that it was important for the matter to be decided for the sake of similar cases in the future.

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Tags: Corporate Commercial Bank, KTB, Yanaki Stoilov, Bulgarian Socialist Party, BSP, Bulgarian National Bank, budget update, state budget act


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