| Part I - |
Enhanced deposit protection in the event of a merger or acquisition involving Scheme members |
| Q74. |
Why is there enhanced deposit protection in the event of a bank merger or acquisition? |
| A74. |
The enhanced deposit protection aims to provide a transitional period for depositors affected by bank mergers or acquisitions to consider if they wish to adjust their deposit portfolios (e.g. reallocating part of their deposits to another bank) to bring their deposit balances under the standard protection limit. Specifically, each affected depositor will have an additional coverage for his/her protected deposits transferred from each of the original Scheme member(s) up to the standard protection limit, on top of the standard protection limit available at the resulting Scheme member, where applicable. The enhanced deposit protection will generally last for six months from the effective date of the bank merger or acquisition.
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| Q75. |
Who will be eligible for enhanced deposit protection under the DPS? |
| A75. |
A merger or acquisition involving a transfer of protected deposits among two or more Scheme members taking effect on or after 1 January 2025 is a qualifying arrangement under the DPS. If you have pre-existing protected deposits with two or more Scheme members involved in a qualifying arrangement immediately before the date of merger or acquisition, you will be eligible for enhanced deposit protection for a time-limited period after the effective date of merger or acquisition. |
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| Q76. |
What will be the maximum level of deposit protection for affected depositors in a qualifying merger or acquisition arrangement under the DPS? |
| A76. |
If you have pre-existing protected deposits with two or more Scheme members immediately before the date of merger or acquisition, you will, for a period of six months from the effective date of merger or acquisition, have an additional coverage for your protected deposits transferred from each original Scheme member up to the standard protection limit, on top of the standard protection limit available at the resulting Scheme member. |
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In case a time deposit with original maturity date beyond the six-month period is involved, the enhanced protection period for the time deposit will be until its original maturity date. For the avoidance of doubt, if a time deposit matures within the six-month period and is renewed with the relevant Scheme member, the additional coverage will still apply only up to the end of the six-month period. |
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| Q77. |
If I have deposits with the Scheme members involved in a merger or acquisition, do I need to apply or pay for the enhanced deposit protection under the DPS? |
| A77. |
No, you do not need to apply or pay for the enhanced deposit protection as the enhanced coverage for protected deposits is automatically provided for affected depositors under the law. |
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| Q78. |
If I have deposits with only one, but not both, of the Scheme members involved in a merger or acquisition, am I entitled to the enhanced deposit protection? |
| A78. |
As you have pre-existing protected deposits with only one of the Scheme members involved in a merger or acquisition, the maximum level of deposit protection before and after the merger or acquisition will remain at the standard protection limit.
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| Q79. |
Will the maximum level of deposit protection be adjusted if there are changes to the amount of deposits during the six-month period after a bank merger or acquisition? |
| A79. |
The enhanced deposit protection limit will remain unchanged for six months after a bank merger or acquisition regardless of any changes to the amount of deposits during the six-month period. |
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| Q80. |
Will I be notified of the enhanced deposit protection arrangement if my banks are involved in a qualifying merger or acquisition arrangement? |
| A80. |
Scheme members involved in a qualifying merger or acquisition arrangement are required to, on or before the merger or acquisition takes effect, notify affected depositors about the enhanced deposit protection arrangement, such as the types of depositors eligible for the enhanced deposit protection, description about the enhanced deposit protection, the effective date of merger or acquisition (an indicative or target date may be provided by a Scheme member if the effective date is not yet confirmed at the time of issuance of the notice), and the duration of the enhanced deposit protection. |
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| Q81. |
Do I need to maintain relevant deposit records as at the date of merger or acquisition to prove that I am entitled to enhanced deposit protection just in case the resulting Scheme member fails? |
| A81. |
No, you do not have to maintain deposit records as at the date of merger or acquisition, as the resulting Scheme member will be required to maintain such records. |
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| Q82. |
Will the enhanced deposit protection lengthen the time for depositors to receive compensation in the event of a failure of the resulting Scheme member? |
| A82. |
The Board aims to pay compensation to the majority of depositors within seven days in the event of a bank failure, with exact timing depending on the circumstances.
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