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BRE Bank S.A.

How to apply the criteria stipulated in article 421(1), i.e. ‘established relationship making withdrawal highly unlikely’ and ‘transactional account, including accounts to which salaries are regularly credited’ to SME or corporate clients eligible for the treatment set out in Article 153(4)’?

Background on the question
Under the definition of ‘retail deposit’ (article 411 (2)) also liabilities to SME and corporate clients (with turnover below EUR 50 m and aggregated deposit to EUR 1m) may be classified as retail deposits. Taking into account an average size of enterprises on Polish market vast majority of deposits will be classified as retail. Furthermore the criteria stipulated in article 421 (1) (‘established relationship making withdrawal highly unlikely’ and ‘transactional account, including accounts to which salaries are regularly credited’) will have to be applied to those enterprises. Unfortunately those criteria are very ‘retail-specific’ (suitable mainly for natural persons). The criterion: ‘transactional account, including accounts to which salaries are regularly credited’ is rather not valid for enterprises. Additionally the determination of ‘established relationship making withdrawal highly unlikely’ presented in the draft guidelines (EBA/CP/2013/34) is also very retail-oriented. For example ‘borrowing relationship’ is defined by ‘mortgage loans or other long term loans’, those products are typical mainly for natural persons. Enterprises use rather such products as revolving facility, investment loans, and similar.

Proposed answer
Stability of deposits placed by SME or corporate client eligible for the treatment set out in Article 153(4) should be assessed using different criteria then those from article 421(1), the new criteria should be based more on enterprises-specific products/relations.
Kamila Kałuża
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