Update on Bank Guarantee (ELG) scheme - Department of Finance

Statement from the Minister for Finance announcing the ending of the ELG Scheme
Notice on ELG Scheme

ELG Query-line

The Department of Finance recommends you contact your bank branch in the first instance for queries on the closure of the Scheme however, if you require further clarification, or specific queries are not dealt with in the Q&A, please contact the Department of Finance Query-line on 1800 30 3648. Queries regarding the DGS scheme should be directed to the Central Bank at 1890 77 7777. Both lines are in operation from 9a.m to 5.pm.

Please note that financial advice cannot be given and you will need to contact your financial institution or financial advisor to clarify specific queries relating to your account. Queries regarding debt liabilities should be directed at the NTMA at 2384700. Calls may be recorded.

Background to the ELG Scheme

The Government introduced a blanket guarantee of bank liabilities on 30th September, 2008, for a period of 2 years. When this guarantee expired on 29th September, 2010, it was succeeded by the ELG Scheme. The ELG Scheme officially commenced on 9th December, 2009, and certain eligible liabilities transferred from the original guarantee arrangement to the ELG Scheme. Not all banks or credit institutions operating in Ireland joined the ELG Scheme. Those institutions that joined the Scheme did so on different dates in 2010.

Following today’s announcement, the Scheme will be closed to new liabilities from midnight 28th March 2013.

hat is happening?

The Minister for Finance has announced that, as and from midnight 28th March, 2013, new deposits made with Allied Irish Banks (AIB) plc, Bank of Ireland (BOI) plc, Permanent TSB plc, AIB Banks North America Inc., EBS Ltd., Bank of Ireland Mortgage Bank, the ICS Building Society, or Permanent Bank International Limited, will not be guaranteed under the Eligible Liabilities Guarantee (ELG) Scheme. The removal of the guarantee will equally apply to all other categories of eligible liabilities in all participating Institutions in the ELG Scheme after midnight 28 March, 2013

However, all existing and future qualifying deposits made up to and including midnight 28 March, 2013, in these banks will continue to be automatically covered by the ELG Scheme, in accordance with its terms and conditions. In practice, this means that the guarantee will apply until the date of maturity of the deposit. For example, a qualifying deposit existing or made on 28 March,2013, which matures say, two months after that date, will continue to be guaranteed for that two-month period.

If in doubt, you should ask your bank to confirm the status of your deposit(s).

I have a deposit less than €100,000, does today’s announcement affect me?

No. If, like the vast majority of bank account holders, your deposits/current account (combined) balance is less than €100,000 per individual per institution (€200,000 for joint accounts), then the change in the coverage of the ELG Scheme will not affect you in any way. Deposits up to and including €100,000 per individual per institution (€200,000 for joint accounts) are covered by a different scheme, the Deposit Guarantee Scheme (DGS). The DGS has no end date and your monies up to the amounts indicated are protected at all times.

You can also find out more about the DGS scheme from the Central Bank of Ireland at centralbank.ie. or alternatively you can telephone 1890 77 7777.

List of Participating Institutions covered by the Deposit Guarantee Scheme (DGS).

I have a deposit in excess of €100,000, does today’s announcement affect me?

Where the deposit in question is covered under the DGS up to the existing €100,000 threshold, the ELG Scheme covers the balance of deposits over the this threshold (i.e. the full amount of deposits that do not qualify for Deposit Guarantee Scheme protection).

Following todays announcement the scheme will close to new liabilities from midnight 28th March 2013. If your deposit matures before midnight 28th March, 2013, you may have the option to place it again with a covered bank in the Scheme - in which case it will be guaranteed until it next matures, up to a maximum of 5 years.

If your deposit matures after midnight 28th March, 2013, you should consult your bank or financial advisor to discuss what options are available.

Will todays change to the ELG Scheme affect the terms and conditions, rate of interest or operation of my account with my bank?

No, the terms and conditions of your account are agreed between you and your bank. The ELG Scheme does not affect any of these terms and conditions or the operation of your account in any way.

Customers can be reassured that there will be no change in the terms and conditions of the financial product(s) they have, the way interest rates are set for their products(s) or the way in which they make payments in respect of their products as a result of changes to the ELG Scheme.

Any contracted deposits - for example those held in Fixed Term accounts or bonds – that qualify as eligible liabilities under the ELG Scheme will continue to be covered by the ELG Scheme until they mature.

Will my bank write to me about changes to the ELG scheme?

There will be no specific letter issued as such, but the announcement of the closure of the ELG Scheme will receive widespread media coverage and notices will be published in the press. The announcement made today by the Minister for Finance in this regard gives adequate notice to depositors.

Should you have a query specific to your own accounts, please contact your local Bank branch or designated Relationship Manager.

If you have a more general query in relation to the ELG Scheme and it is not answered by your bank or by these Frequently Asked Questions, you can contact the Department of Finance, Government Buildings, Upper Merrion Street, Dublin 2. Freephone 1800 30 3648 or you may contact the NTMA, Treasury Building, Grand Canal Street, Dublin2. Telephone +353-1- 2384700.

Does the European Central Bank (ECB) support the Irish Banks?

Yes. The ECB supports the Irish banks and has stated that it will continue to do so. However, while the ECB continues to provide funding to the Irish covered banks, there has been a steady decrease in dependence on this funding. In addition, deposit balances in the system have stabilised and, recently, Bank of Ireland and Allied Irish Banks have been able to raise funds on the international market.

13 February 2013Finance Bill 2013 Documentation

01 May 2011EU-IMF Programme Documents

01 March 2013Annual Review 2012

26 February 2013Minister for Finance announces the ending of the Bank Guarantee (Eligible Liabilities Guarantee Scheme)