The bank is a financial intermediary that, at its own risk and peril, allocates funds of shareholders and depositors in various projects in the form of loans. With the growth of problems with placed loans, the bank suffers losses, which can affect the bank's ability to return the received deposits from depositors. Non-return of money to depositors - undermines confidence not only in this bank, but in the entire banking system. That is why there are several mechanisms for protecting deposits in banking rules:
- prudential norms - the Central Bank regulations requiring banks to keep the bank in such a condition that the volume of risky assets directly depends on the bank's capital;
- deductions of the bank to the fund of required reserves of the Central Bank, depending on the amount of depositors' funds. In simple words, 4% - for funds in national currency and 14% - for funds in foreign currency of depositors' funds (for all types of deposits) - are in the central bank;
- contributions to the Deposit Guarantee Fund. The Bank maintains the balance in the Fund on an ongoing basis 0.25% of all deposits. In the event of a situation, when the bank is unable to make payments on deposits, the Fund guarantees the return of funds to depositors.