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Deposit Guarantee Schemes (DGS)

Deposit guarantee schemes (DGS) provides the compensation of the individuals’ deposits up to 5000 GEL or its equivalent in any other currency, when the event of covered loss occurs. In addition, scheme will cover all depositors first 5 000 GEL equivalent, despite the volume and currencies of the deposits.

According to the draft law presented to the Parliament, the insurance fund target level will be 6% of the total eligible, covered deposits. The main source for financing of the insurance fund, among another sources, will be monthly regular payments, which should amount less than 0.067% of the insured GEL and 0.1% of the insured USD deposits.

The coverage limit of 5000 GEL cover 96.5% of depositors, who hold the deposits below the respective coverage limit, and 15.3% of the total respective deposits’ amount.

Based on PBO estimation, the fund will be able to reach the limit of 6% of the total covered deposits in 2025. In order to achieve the same target(6%) earlier, namely for 2022, monthly payments for GEL deposits should increase up to 0.97%, while monthly payments for USD deposits should increase up to 0.144%.

In addition to the baseline scenario PBO developed several other scenarios outlining alternative dynamics of the insurance fund over the next years for different monthly payments or deposits’ growth rates.