STATE AGENCY FOR DEPOSIT INSURANCE AND BANK RESOLUTION

HRV | ENG
 

STABLE AND SAFE SYSTEM

All credit institutions registered in the Republic of Croatia participate in the deposit insurance system. The goal of the deposit insurance system is protection of citizens (natural persons), small entrepreneurs and non-profit organisations. Namely, in the event of credit institution bankruptcy, the abovementioned depositors do not have to wait for the end of a long-term bankruptcy proceedings, but receive their deposit compensation from the Agency and the Agency claims reimbursements during bankruptcy proceedings instead of them.

List of terms

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Deposit

Deposit, in this context, shall mean aggregate resources available in bank accounts (current accounts, giro accounts and savings accounts) at the moment of the occurrence of the insured event.

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Depositor

Depositor in a credit institution is the owner of the deposit.

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Deposit Guarantee Schemes

Scheme of deposit insurance

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Ex Ante

Term meaning "prior to the occurrence of an event" or in advance. Financing of insurance system in the Republic of Croatia is set up on ex-ante basis. The concept of ex-ante financing enables credit institutions to form in advance, through paying the premium for deposit insurance during their regular operation, the Deposit Insurance Fund, which would be used for payment of insured deposits in the event of credit institution bankruptcy.

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Ex Post

Term meaning "after the occurrence of an event" or subsequently. The deposit insurance system can be financed on an ex-post basis, i.e. after the bankruptcy of a financial institution. In case of ex-post financing, "good credit institutions" finance, i.e. cover the expenses of insured deposit payment for "bad credit institutions".

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Financial system

Financial system of a country consists of its currency, financial markets, financial institutions and institutions regulating and supervising their work.

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Natural person

A person holding rights and obligations

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Credit institution

Credit institution is a bank, savings bank or building society headquartered in the Republic of Croatia or a branch office of a credit institution headquartered outside the Republic of Croatia that provides services in the territory of the Republic of Croatia.

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Non-profit organisation

An organisation that has a purpose of achieving public interest goals rather than profits

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Insured event

Croatian deposit insurance system is activated upon the occurrence of an insured event. An insured event occurs when Croatian National Bank submits a decision on the inaccessibility of the deposit to the credit institution, establishing that the credit institution can not pay, neither would soon be able to pay due deposits due to deterioration in the financial standing, or when the competent court issues a decision on the initiation of bankruptcy proceedings in the credit institution.

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Compensation

Compensation shall mean the amount paid by the Agency to natural persons, small entrepreneurs, non-resident companies and non-profit institutions upon the occurrence of the insured event. It is calculated after the offsetting of the sum of deposits and the sum of outstanding liabilities of the depositor in relation to the credit institution on the day of the occurrence of the insured event.

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Deposit insurance premium

Deposit insurance premium is a financial amount paid by credit institutions as policyholders to the Agency as the insurer.

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Risk based Premiums

Premium paid according to the assessment of the level of risk associated with business operations of a particular credit institution.

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Resolution of a credit institution

A procedure of reorganisation of a credit institution experiencing difficulties by establishing new financial relations, i.e. by "purifying" the capital in a way that the accumulated debt is compensated with liquid assets or with investment of fresh capital.

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Bankruptcy proceedings

Procedure conducted in order to settle financial obligations of a legal or natural person not being able to meet their financial obligations, with the purpose of compensating their creditors.

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Deposit insurance system

A system ensuring protection of depositors from a loss of their deposits