site.btaBulgarian Deposit Insurance Fund Informs about Treatment of Preferential Deposits in Commercial Corporate Bank

Bulgarian Deposit Insurance Fund Informs about Treatment of Preferential Deposits in Commercial Corporate Bank

Sofia, May 14 (BTA) - Reacting to media publications of excerpts
of a letter originating from the Bulgarian Deposit Insurance
Fund (BDIF), the Governing Board of the BDIF said Thursday that
the letter quoted in the media and sent to the conservators of
the failed Corporate Commercial Bank (Corpbank) was written in
response to questions raised by the conservators vis-a-vis the
application of two provisions of the Bank Deposits Guarantee Act
concerning the amount of the guarantee and exceptions. The
letter is signed by Neli
Kordovska, in her capacity as deputy chairperson of the
Governing Board of BDIF.

In its statement on Thursday, BDIF says that the instructions to
Corpbank's conservators must not be treated in isolation but in
connection with the concrete questions raised by them. The
Governing Board of BDIF does not give instructions in general
but only in respect of concrete questions that are asked, it
said.

Speaking to the Bulgarian National Television on Thursday,
National Assembly Budget and Finance Committee Chair Menda
Stoyanova said that Kordovska is the person who authorized on
behalf of BDIF amendments to the terms of the deposit agreements
of 1,000 depositors in Corpbank making them eligible for
guarantees to which they were not entitled to. In an earlier
statement on May 13 Stoyanova also confirmed press reports that
Kordovska, who is also acting central bank Deputy Governor and
Head of the Banking
Supervision Department withdrew over 60,000 euro she held on
deposit with Corpbank hours before the bank shut down.

On Monday prosecutors started a probe for deliberate negligence
against the two conservators at Corpbank for gross negligence
over renegotiated terms of deposits with preferential interests.
The probe also checks the instructions the central bank made to
the conservators in respect of the preferential deposits.

On Tuesday Prosecutor General Sotir Tsatsarov implied indirectly
that one of the probed top central bank officials is Kordovska.


Corpbank suspended operations on June 21 after a run by
depositors left it illiquid. On the same day the central bank
placed it under conservatorship and the conservator remained at
the bank until March 25 when they were replaced by trustees in
bankruptcy. Corpbank is now delicensed and declared bankrupt by
a court.