The Aid Fund and Minimum Deposit constitute one of the pillars of the Cooperative Protection Scheme, where liquid assets are gathered to guarantee an efficient safety assurance and avoid any bank’s bankruptcy, even if extremely adverse events take place.
The Aid Fund:
A financial fund consisting of premiums and money contributions of all IPS-SGB Participants, kept on a separate accounts of the Scheme. Its purpose is to cover the financial assistance granted to the Participants to ensure their liquidity, improve their solvency, and prevent bankruptcy.
The Minimum Deposit mechanism:
Obligatory deposits collected by Cooperative Banks on an account in the Affiliating Bank and invested in safe and liquid treasuries and money instruments. Their purpose is to create an effective mechanism of liquidity assurance through a respective liquid assets buffer. Liquid assets collected within the framework of the Minimum Deposit mechanism can be used to provide assistance to an IPS-SGB Participant threatened with a loss of current ability to settle money liabilities..