TIRANA, Jan. 20 – Albania’s deposit insurance scheme will be extended to also include deposits by the business community, according to a draft law submitted to Parliament by the government.
The new legal changes will include some 130 billion lek (€917 mln) in the insurance scheme covering deposits of up to 2.5 million lek (€17,700). The amount accounts for 13 percent of total deposits and 6 percent of the total number of depositors in the Albanian banking system.
Under the current law, only household deposits accounting for 85 percent of total deposits were insured at an amount of up to 2.5 million lek.
Deposits in Albania are insured by the Albanian Deposit Insurance Agency (ADIA), an independent public institution established in 2002 with the task of protecting individual depositors and paying out insured deposits in case of bank failure, with the wider objective of strengthening the stability of the banking and financial system in Albania.
As elsewhere in the region, Albanian banks witnessed substantial panic deposit withdrawals in the face of spillovers from instability of global financial markets, which were compounded by concerns about the health of the Greek banking system in the fall of 2008. Ample liquidity buffers were utilized to meet deposit withdrawals. To boost confidence, deposit insurance limits were raised fivefold to 2.5 million lek (25,000 US dollars), and deposits started to recover from the second half of 2009.
