Título X. Fondo para la proteccion del ahorro

The Fund for the Protection of Savings is hereby created, with the object of guaranteeing to the depositor in the banking system the recovery of their deposits, on the terms referred to in this Title.

The sources of financing of the Fund for the Protection of Savings shall consist of:

a)The quotas that national banks and branches of foreign banks shall obligatorily contribute, in accordance with Article 88;

b)The returns on the investments of the resources of the Fund for the Protection of Savings, fines and interest;

c)The cash resources obtained by virtue of the liquidation proceedings of the bank concerned, by reason of the subrogation of rights referred to in Article 91;

d)The cash resources obtained from the sale of the assets that may have been awarded to the Fund for the Protection of Savings, by virtue of the liquidation proceedings of the bank concerned, by reason of the subrogation of rights referred to in Article 91. It is understood that said assets awarded in payment to the Fund for the Protection of Savings shall not constitute a source of financing thereof, until they are sold and the cash resources resulting from the sale have been received;

e)The contributions of the State, to strengthen the financial position of said Fund or so that it may fulfill the obligations referred to in Article 87, at the request of the Banco de Guatemala, as administrator of the Fund for the Protection of Savings, upon prior joint opinion issued by the Superintendency of Banks and the Banco de Guatemala; and,

f)Other sources that increase the resources of the Fund for the Protection of Savings.

The resources of the Fund for the Protection of Savings shall be unseizable, shall not have a refundable character and may only be applied to the purposes provided for in this Law.

The Savings Protection Fund shall cover up to an amount of twenty thousand quetzales, or its equivalent in foreign currency, per natural or legal person holding deposits constituted in a national private bank or branch of a foreign bank. For such purpose, interest pending capitalization shall be excluded, and joint accounts shall be deemed opened by a single natural or legal person, except in those in which one of the account holders is different, in which case they shall be covered under the terms of this Title.

The coverage amount shall be modified by the Monetary Board when the percentage of deposit accounts whose balances are less than or equal to the current coverage amount falls below ninety percent of the total deposit accounts opened in national banks and branches of foreign banks. For such purpose, the Superintendency of Banks shall verify the foregoing matters and, upon occurrence of the aforementioned case, shall submit to the Monetary Board the proposal for revision of the coverage amount, so that it fully covers not less than ninety percent of said accounts.

If the depositor is at the same time a borrower of the bank, both balances shall be set off only for amounts that are liquid, enforceable and matured. Likewise, in the case of deposit accounts opened as joint accounts, if any of the depositors is at the same time a borrower of the bank, the balances shall be set off in the proportion corresponding to the debtor. In both cases, if after effecting such set-off there remains a balance in favor of the depositor, said balance shall be restored up to the maximum coverage amount referred to in this article.

The following deposits are not included in the coverage referred to in this article:

a)Those of natural or legal persons related to the bank in question; and

b)Those of the shareholders, members of the Board of Directors, managers, assistant managers, legal representatives and other officers of the respective bank.

Excepted from the provisions of subparagraphs a) and b) above are the deposits of the original shareholders of banking entities who by specific law have been required to acquire shares of such entities and who hold no position therein.

The quotas that each bank must contribute monthly to the Fund for the Protection of Savings are composed of the following components:

a)A fixed component, equivalent to one-twelfth of two per thousand of the monthly average of all of the depositary obligations recorded by such banks during the immediately preceding month; and,

b)A variable component, equivalent to one-twelfth of up to two per thousand of the monthly average of all of the depositary obligations recorded by such banks during the immediately preceding month. The Monetary Board, upon proposal of the Superintendency of Banks and with the favorable vote of three-fourths of the members comprising it, shall determine the rates to be applied, as well as the mechanism by which the quota that each bank must pay shall be calculated, based on risk criteria.

For the calculation of the quotas referred to in this article, the information that the Superintendency of Banks shall require from each bank shall be taken as the basis.

For the payment of the aforementioned quotas, the Bank of Guatemala is authorized, within the first five (5) days of the month following the month to which the information corresponds, to debit the deposit accounts that each bank maintains for purposes of the bank reserve.

When a bank does not provide the information necessary for the calculation of the quota, the Bank of Guatemala shall debit the respective account based on the last information provided by the bank, without prejudice to making the pertinent adjustments when the required information is completed.

If, after making such adjustments, a difference payable by the bank in favor of the Fund for the Protection of Savings results, interest shall be calculated on such difference in favor of the Fund for the Protection of Savings, equivalent to the application of one and one-half times the maximum annual interest rate that the bank itself shall have charged in its lending operations during the month to which the difference corresponds, for the time during which payment shall have remained pending. In the event that the difference is in favor of the bank, it shall be applied to the quotas for the following months until exhausted.

The obligation of banks to contribute the formation quotas to the Fund for the Protection of Savings shall cease, for each bank, when the balance of said contribution reaches five percent (5%) of the totality of the deposit obligations. For that purpose, the Fund shall keep a register of the quotas of each participating bank.

If for any circumstance the resources contributed to the Fund for the Protection of Savings by the bank in question should fall below the indicated percentage, said bank shall resume payment of its formation quotas until reaching the mentioned percentage.

The resources of the Fund for the Protection of Savings shall be administered by the Bank of Guatemala.

The Bank of Guatemala, in its capacity as administrator of the resources of the Fund for the Protection of Savings, at the request of the Board for the Exclusion of Assets and Liabilities, and on the terms indicated by the latter, shall make the disbursements necessary to give effect to the coverage of the deposits referred to in this title. Said Board may request the Bank of Guatemala, in its capacity as administrator of the Fund for the Protection of Savings, to make payments to the depositors of the bank in question.

A depositor who is benefited by the aforementioned coverage, by operation of law, subrogates their rights in favor of the Fund for the Protection of Savings for the sum that has been paid to them.

The payment made by the Bank of Guatemala to depositors, in its capacity as administrator of the Fund for the Protection of Savings, by reason of the application of this title, is without prejudice to the rights of such depositors to demand from the corresponding bank restitution of the balance of their deposits not covered by said Fund.

The Bank of Guatemala, as administrator of the Fund for the Protection of Savings, is authorized to contract the services of such banks as it deems advisable, in order to make the corresponding payments, as well as to recognize the commissions or fees for the services in question, chargeable to the Fund for the Protection of Savings.

The Bank of Guatemala, in its capacity as administrator of the Fund for the Protection of Savings, shall invest the resources of said Fund in financial instruments denominated in national or foreign currency, in accordance with sound and prudent criteria of safety, liquidity and profitability, that ensure adequate diversification of the investments.

The Bank of Guatemala is prohibited from investing the resources obtained by the Fund for the Protection of Savings in investment instruments issued by the banks that contribute to it. The investment policy for the resources of the Fund for the Protection of Savings shall be approved by the Monetary Board, upon proposal of the Bank of Guatemala.

The Fund for the Protection of Savings shall be subject to the supervision and inspection of the Superintendency of Banks.

The Bank of Guatemala shall quarterly submit to the Monetary Board a report on the operations of the Savings Protection Fund for the preceding quarter.

Banks are obligated to inform all persons with whom they conduct deposit operations that the coverage referred to in this Law is applicable to deposits, up to the corresponding coverage amount, per natural person or juridical person.

The Monetary Board shall issue the regulatory provisions for compliance with the provisions established in this title.