What is the Mutual Agricultural Credit Guarantee Fund (FGCAM or the Fund)?

FGCAM is a public-law legal person with administrative and financial autonomy, having its head office in Oporto, on the premises of Banco de Portugal, which is the entity responsible for ensuring the technical and administrative services required for the smooth operation of this Fund.

What is the purpose of FGCAM?

The purpose of FGCAM is to guarantee the repayment of deposits with Caixa Central de Crédito Agrícola Mútuo (Central Mutual Agricultural Credit Bank) and its associate Caixas de Crédito Agrícola Mútuo (mutual agricultural credit banks – hereinafter referred to as “agricultural banks”), as well as promote and implement any measures deemed necessary to ensure the solvency and liquidity of the aforementioned institutions with a view to protecting the Sistema Integrado do Crédito Agrícola Mútuo – SICAM (Integrated Mutual Agricultural Credit Scheme).

Are deposits with financial institutions which do not belong to SICAM guaranteed?

They are guaranteed, but not under FGCAM. Deposits with financial institutions which do not belong to SICAM are guaranteed by the Deposit Guarantee Fund, which offers a similar degree of protection to depositors.

What type of deposit is guaranteed by FGCAM?

FGCAM guarantees any type of deposit which a credit institution must repay under the legal and contractual conditions applicable and which results from funds left in an account or from temporary situations deriving from normal banking transactions.

Are certificates of deposit also covered by the Fund's guarantee?

Yes, the guarantee also covers funds represented by certificates of deposit issued by the member institution, but not those represented by other debt securities issued by the same institution nor liabilities arising out of own acceptances or of promissory notes in circulation.

Is the Fund's guarantee limited to a particular value?

Yes, FGCAM covers in full the value of the cash credit balances of each depositor, whenever that value does not exceed € 100,000.

If a customer of an agricultural bank holds deposits in more than one agricultural bank belonging to SICAM, does the guarantee apply in full to the value of the deposits?

FGCAM covers in full the value of the cash credit balances, in each bank, whenever the value of deposits of each holder in each agricultural bank or in the Central Mutual Agricultural Credit Bank does not exceed €100,000.

Are deposits denominated in foreign currency also covered by the Fund's guarantee?

Yes, deposits denominated in foreign currency are also covered by the Fund's guarantee and these shall be converted, for reimbursement purposes, into euro at the exchange rate prevailing on the date on which the deposits become unavailable.

Is interest due on deposits also included in the credit balances of deposits for guarantee purposes?

Yes, interest due on deposits is included in the credit balances of deposits covered by the Fund's guarantee and calculated up to the date on which the deposits become unavailable.

How are credit balances of joint accounts (jointly or jointly and solidarily held) classified?

Except where otherwise provided for, these credit balances shall be considered as belonging in equal parts to their holders.

If my agricultural bank does not repay my deposits under the terms laid down in the contract, when will I be entitled to a repayment by FGCAM?

The repayment of amounts covered by the guarantee shall take place within the following time limit: one share up to the amount of €10,000, with a maximum payout delay of 7 days; the remainder up to the amount of €100,000, with a maximum payout delay of 20 working days. The time limit is counted as of the date on which deposits become unavailable, and FGCAM, in exceptional circumstances and on a case-by-case basis, may apply to Banco de Portugal for an extension of the time limit, which may not exceed 10 working days. Notwithstanding the expiry of the aforementioned time limit, depositors maintain their right of compensation for as long as the amount is owed by the Fund, without prejudice to the period of limitation set forth in the general law.

When are deposits considered unavailable?

Unavailability of deposits is considered to exist when SICAM, for reasons which are directly related to its financial circumstances, is not able to repay the deposits under the legal and contractual conditions applicable, and Banco de Portugal has verified, at the latest 5 days after first becoming aware of that fact, that the system concerned appears to be unable on the occasion to repay the deposits and has no current prospect of being able to do so.

Are there any deposits excluded from the Fund's guarantee?

Yes, under the terms of the law, the following deposits are excluded from any repayment by guarantee schemes:

Deposits made on their own name and for their own account by the qualified investors referred to in Article 30 (1) of the Securities Code (Código dos Valores Mobiliários), as well as by general government bodies;
Deposits that have been declared lost in favour of the State due to criminal conduct and deposits arising out of transactions in connection with which there has been a criminal conviction for money laundering;
Deposits with unauthorised entities;
Deposits which are not with the Central Mutual Agricultural Credit Bank and its associate agricultural banks, namely in an offshore jurisdiction, except if the depositor is not aware of the final destination of such deposits;
Deposits by members of the management or auditing boards of the credit institution, its qualifying shareholders, directly or indirectly representing at least 2% of its capital stock, certified auditors at the service of the institution, external auditors responsible for carrying out the audits of the institution or depositors of similar status in other companies in the same group or holding a controlling interest in the institution;
Deposits by persons or entities that have performed functions, held stakes or provided the services under the foregoing subparagraph in the four years before the date on which deposits become unavailable, or the date of imposition by Banco de Portugal of financial reorganisation measures under the terms of the law, and whose action or failure to act caused the financial difficulties experienced by the credit institution or which helped to aggravate that situation;
Deposits by the spouse, relatives by consanguinity or persons related by affinity in the first degree or third parties acting on behalf of the depositors referred to in the foregoing subparagraph;
Deposits by other companies in the same group or holding a controlling interest in the institution;
Deposits by persons responsible for facts related to the credit institution, or that have profited from these facts directly or through a third party, which have caused its financial difficulties or helped to aggravate that situation, due to action or failure to act in the performance of their functions;
Deposits for which the depositor has, on an individual basis, obtained from the same credit institution, rates or other financial concessions which have helped to aggravate its financial situation;
Deposits arising out of the full or partial repayment of investment operations with guaranteed return or with guaranteed repayment of the amounts invested when they have been wrongfully agreed between investors and participating entities, or granted by the latter. Such guarantees are assumed to be illicit when they are provided in the three months before the date on which deposits become unavailable, or the date of imposition by Banco de Portugal of financial reorganisation measures under the terms of the law;
Deposits by persons acting on behalf of the persons or entities referred to in the previous subparagraphs.

Which credit institutions are members of FGCAM?

Agricultural banks belonging to SICAM and to the Central Mutual Agricultural Credit Bank are members of FGCAM.

Which actions may FGCAM carry out to ensure the solvency and liquidity of institutions belonging to SICAM?

FGCAM may act in several ways to ensure the solvency and liquidity of institutions belonging to SICAM, as well as SICAM itself:

The Fund may notify any member institution so that it adopts the measures deemed necessary for the reestablishment of its financial standing, when it considers that its smooth functioning or solvency is at risk.
The Fund may grant allowances or loans to member institutions, give guarantees in their favour and acquire from them credit or any other items from their assets.
The Fund can restrain its support to any member institution, depending on the explicit acceptance by the latter of the set of management and other rules the Fund deems necessary to correct the situations which gave rise to the need for support.
When the seriousness of the situation so requires, the support can be restrained, depending on the acceptance by the member institution supported of the monitoring of its activities by a representative of the Fund, who is empowered to prevent the implementation of any of the member institution’s decisions.
The Fund can also call for general meetings of any member institution and intervene therein in order to disclose information to the associates and to propose measures.

How does the Fund obtain the financial resources required to perform its tasks?

FGCAM shall have the following financial resources: initial contributions from Banco de Portugal and member institutions, periodical (annual) and special contributions from the aforementioned member institutions, income from investment of resources, borrowed funds, endowments and fines exacted from member institutions. Under exceptional circumstances, namely if systemic stability aspects are at stake, Banco de Portugal may, under the conditions laid down in its Organic Law, grant temporarily to the Fund the financial resources required to meet its immediate needs.

How do the supervisory functions of Banco de Portugal differ from those of the Mutual Agricultural Credit Guarantee Fund?

The supervision of institutions participating in FGCAM, and in particular their prudential supervision, is incumbent on Banco de Portugal, in accordance with its Organic Law and with the Legal Framework of Credit Institutions and Financial Companies.

The purpose of the Mutual Agricultural Credit Guarantee Fund is to guarantee the repayment of deposits with credit institutions which are members thereof and to promote and carry out the actions deemed necessary to ensure the solvency and liquidity of the aforementioned institutions belonging to SICAM.

Who is responsible for the management of FGCAM?

The Fund is managed by a Management Committee comprising three members. The chairperson – who is a member of the Board of Directors of Banco de Portugal – and two other members. One of them is appointed by the Minister of Finance and the other by the Central Mutual Agricultural Credit Bank.

To whom is the Fund accountable?

The Board of Auditors of Banco de Portugal monitors the Fund’s activities and the observance of the applicable laws and regulations and issues its opinion on the annual accounts. No later than 31 March, the Fund shall submit for approval to the Minister of Finance its report and accounts as at 31 December of the previous year together with the opinion of the Board of Auditors of Banco de Portugal. The Fund’s chart of accounts is also subject to the subsequent auditing by the Court of Auditors.