SEMINAR ON DEPOSIT INSURANCE FOR THE WESTERN BALKANSDecember 8-9, 2003

DEPOSIT INSURANCE AGENCY

TIRANA, ALBANIAwww.dia.org

Tirana, 2003

-Law “On deposit insurance” no. 8873 dated 29.03.2002,

stipulates the elements of the deposit insurance system:

• Organization

• Financing sources

• Member institutions in the deposit insurance scheme

• Types of deposits insured

• The amount insured

• The reporting and sharing information

- The organization

The headquarters in Tirana, independent of any other entity

The agency comprises by three sectors:

• Deposit insurance and compensation sector

• Financing sector

• Legal and human resources sector

The main function is:

• Insurance and

• Compensation

It insures individual deposits up to 6 000 USD

- term deposits

- demand deposits

- certificate deposits

The agency compensates:

• Up to $3000 100 per cent

• From $3000 to $6000 100 % of 3000$ and 85 % of the remaining portion.

• Concerning deposits over $6000 DIA compensates 92,5 %

- The financial assets are comprise of:

• Paid capital of about $3,5 million from the state budget

• Initial contributions from the insured banks

• Annual premiums from the insured banks

• Credits, loans, subsidiaries and donations

• Capital incomes and earnings derived from its own profits

- The management of the funds is focused on Treasury Bills issued by the

Government of Republic of Albania

- After acceptance on the insurance scheme all banks are obliged to pay the Agency the initial contribution, calculated as 0,5 % of

subscribed capital.

- annual premium for deposit insurance, which is calculated at 0,5 % of the arithmetic average of the amount of the insured deposits recorded in the bank after each business day during the last quarter of the preceding year

- Membership in DIA - all entities that apply for banking licences

with the Supervisory Authority. • Total number of banks and branches of foreign banks is 14.

- some of them with the joint capital -all of them are private except Savings Bank. It has about

69 percent of total of insured deposits

- Sustaining on CAMELS system, the banking system in Albania is assessed by the Supervisor Authority at 2

• Most of the banks capital is assessed at the same level with the system level. The level of the ratio of the capital adequacy (33,8 %) shows that the system is barred from credit risk.

• Asset quality is also assessed at 2. The low value of the index of the ratio of deficient loans compared with the total approved loans, indicates that our banking system is not threatened by credit risk.

- deficient loans are calculated at 4.9% of the regulatory capital.

- The ratio of the total approved loans compared with total of the assets of the system is 12,8 %.

- The reporting and sharing information

• Receives data from the insured banks and the Supervisor Authority • periodically informs the Bank of Albania and the insured banks

about:– the insurance deposit policies – the financial situation of the banks

– its budget

The agency prepares an annual report approved by Supervisory Authority, it submits it to the parliament of the Republic of

Albania and to the Council of Ministers