The Cyprus Deposit Guarantee Scheme (DGS) is a financial safety net mechanism that aims to protect depositors in case of a bank failure. The system serves to maintain public confidence in the banking system and to promote financial stability by offering deposit insurance, which guarantees the reimbursement of a certain amount of deposits held by individuals and businesses in the event of a bank’s insolvency. By assuring depositors that their funds are safe up to a specified limit, the deposit insurance system reduces the risk of bank runs, which can have severe economic consequences.
The need for deposit insurance in Cyprus, as in many other countries, stems from the potential impact of bank failures on individual depositors and the broader economy. The loss of depositors’ funds in a bank failure can lead to a loss of confidence in the banking system, resulting in bank runs and instability. Deposit insurance, provided by the Cyprus DGS, helps to mitigate these risks by offering a degree of protection to depositors and, as a result, fostering confidence in the financial system.
The Cyprus Deposit Guarantee Scheme (DGS) operates under the supervision of the Central Bank of Cyprus (CBC). The organizational structure of the DGS Administration comprises the CBC, which is responsible for the overall administration and implementation of the deposit guarantee system, and the participating banks, which contribute to the DGS Fund. The CBC is responsible for the management of the DGS Fund, the payout process in case of a bank failure, and the ongoing monitoring and regulation of the participating banks to ensure their compliance with the requirements of the DGS.
The DGS in Cyprus covers deposits made by individuals and businesses, up to a limit of €100,000 per depositor per bank. This limit applies to the aggregate amount of all eligible deposits held by the depositor in the same bank. In the event of a bank failure, the DGS Administration is responsible for reimbursing the insured depositors within a period of seven working days. For further information on the Cyprus Deposit Guarantee Scheme (DGS) Administration, you can contact:
Central Bank of Cyprus
80, Kennedy Avenue
P.O. Box 25529
1395 Nicosia
Cyprus
Phone: +357 22714100
Fax: +357 22378115
Email: [email protected]
Website: https://www.centralbank.cy
For specific queries related to the Deposit Guarantee Scheme, you may also visit the dedicated DGS section on the Central Bank of Cyprus website.