MINSK, 12 November (BelTA) – The approaches to the classification of bank deposits described in Belarus President Ordinance No.7 concerning the attraction of cash assets to bank deposits correspond to the international best practices. The head of state signed the document on 11 November 2015, runs the press release of the National Bank of the Republic of Belarus (NBRB), BelTA informs.
In line with the Ordinance, starting from 12 November Belarus changes the classification of bank deposits. Fixed-term and conditional deposit accounts will be divided into irrevocable and revocable deposits. The terms for early withdrawal of funds will be the main distinctive feature of these two types of deposits. Irrevocable deposits do not envisage an early exit on the initiative of the depositor. It will be possible to withdraw the deposit ahead of the expiration of the contract time only with the consent of the bank.
“The category of bank deposits different from demand deposits is widespread in many countries. The common principle is the need to coordinate the ways and terms of the early withdrawal of the deposit between the bank and the depositor. As a rule, depositors may withdraw their money ahead of the expiration of the deposit term. However, the law does not oblige the bank to return the money ahead of time,” the press service said.
Thus, in Italy, Finland, France and Germany the possibility for an early withdrawal of time deposits is decided by the bank and the depositor independently in an agreement. In Austria the early withdrawal of the time deposit is views as a loan, which requires the payment of interest on the sum of every month left before the payback period. The UK does not use the definition “time deposit”. However, the UK legislation does not hinder the parties to the agreement coordinate any terms and period of the bank deposit, including penalties and so on. Thus, all the conditions and rules should be determined and agreed in each separate agreement between the bank and the depositor.
According to the National Bank, the introduction of Ordinance No.7 is aimed at the development of a long-term funding base by the banks of Belarus and its effective use, including through improving access to loans for economic entities and population. “The National Bank of the Republic of Belarus will continue its policy of supporting interest rates on deposits at the level exceeding the inflation rate, thus ensuring the safety of people's savings,” the press service stressed.
