The maximum level of deposit insurance will increase to 6 million lek by 2027

2025-10-15 07:30:00, Ekonomi CNA

The insured amount of deposits in financial institutions is expected to increase to the level of 6 million lek by 2027.

The Deposit Insurance Agency (ASD) stated on Tuesday during its report to the Albanian Parliament that it is working on the preparation of a draft law that will enable the approximation of Albanian legislation on deposit insurance with the relevant European directive.

One of the main issues in the approximation of legislation will be the maximum level of deposit insurance. Under the current law, the ASD insures bank deposits up to the amount of 2.5 million lek and deposits in savings and loan associations up to the amount of 2 million lek. European Union Directive 49/2014 requires that the value of deposit insurance in member states be at least 100 thousand euros.

However, an immediate increase of approximately four times the maximum deposit coverage level would be difficult. For this reason, the ASD projects a two-stage increase.

With the new law "On Deposit Insurance", which is expected to be submitted for approval within 2026 or early 2027, there will be an interim increase in the amount of deposit coverage, from 2.5 million lek to 6 million lek. In a second stage, upon accession to the European Union, the maximum amount of deposit insurance will be increased to the limit provided for in the directive, of 100 euros.

ASD information shows that currently 95% of legally insured deposits have a value within the maximum coverage level of 2.5 million lek. It is estimated that with the increase in the maximum level to 6 million lek, the percentage of covered deposits will increase to 98%.

Another necessary alignment with the EU directive will be the method of calculating the insurance premium paid by member entities of the deposit insurance scheme.

According to the law, for all commercial banks in the scheme, the quarterly insurance premium is calculated uniformly, as 0.125% of the arithmetic average of the amount of insured deposits. For SLA, the quarterly insurance premium is 0.075% of the arithmetic average of the amount of insured deposits. The EU Directive requires that the insurance premium be calculated based on the specific risk level of each entity member of the scheme.

The ASD announces that it has already prepared the new methodology for calculating the risk-based deposit insurance premium. However, the application of this methodology can only begin after the necessary amendments to the Law "On Deposit Insurance" have been approved.

The coverage ratio of bank deposits insured by the Deposit Insurance Agency (DIA) fund increased further last year. According to DIA information, the ratio reached 7.61%, up from 7.27% a year earlier.

This indicator is calculated as the ratio between the total value of the bank deposit insurance fund and the total value of insured deposits. The increase in this ratio shows that the ASD insurance fund has also grown at a faster pace than the value of insured deposits last year.

The value of the bank deposit insurance fund at the end of last year reached 70.14 billion lek, an increase of 10.3% compared to the previous year.

This fund has two main sources of financing: premiums paid by banks and income from the fund's investment. Income from insurance premiums for 2024 reached 4.39 billion lek or 5.4% higher than in 2023. In the last decade, income from premiums has been constantly increasing, which is directly related to the increase in insured deposits in the banking system in these years.

While income from the investment of financial assets of the deposit insurance fund in banks for 2024 was 2.83 billion lek or 20.7% more than in 2023./ Monitor