The deposit insurance system is a kind of financial guarantee system, which refers to the establishment of insurance institutions by various qualified deposit financial institutions, and each deposit institution, as the insured, pays insurance premiums to them according to a certain proportion of deposits and establishes deposit insurance reserves. When the member institutions have business crisis or face bankruptcy, deposit insurance institutions provide financial assistance or directly pay part or all of their deposits to depositors, thus protecting depositors' interests, maintaining bank credit and stabilizing financial order.
First, how does the deposit insurance system protect deposits?
According to the comprehensive evaluation of different banks, the central bank determines a deposit insurance rate, ranging from 1,000 to 20,000. The rate standard shall be formulated and adjusted by the deposit insurance fund management institution according to the economic and financial development, deposit structure and deposit insurance fund accumulation level. Once the insured deposit financial institution has a risk event, the Deposit Insurance Fund Management Co., Ltd. can acquire, undertake or directly rescue the institution under the guidance of the central bank and regulatory agencies. Even if there are serious business risks and insolvency, the Deposit Insurance Fund Management Co., Ltd. can pay the depositor's principal and interest within the quota.
Second, the amount of deposit insurance.
Except for interbank deposits of financial institutions and deposits of senior executives of insurance institutions, the maximum repayment limit of other local and foreign currency deposits is RMB 500,000, including principal and interest. The part that exceeds the maximum repayment limit will eventually be compensated from the liquidation property of the insurance institution.