The government has proposed amendments to the deposit insurance law to strengthen depositor protection, improve the scheme's management efficiency, and ensure the stability of the banking and financial system in the event of a crisis.

The draft law, released for public consultation by the Ministry of Finance, envisages expanding the scope of insured deposits, raising the coverage limit, and improving compensation procedures and timelines.

The amendments aim to include categories of depositors currently excluded from the insurance scheme, such as bank executives, administrators, and their family members; shareholders holding at least 5% of a bank's capital; non-profit organizations; foundations; political parties; local government units; schools and hospitals; as well as other categories specified in the draft law.

One key change is the gradual increase of the deposit coverage limit in banks from Lek 2.5 million to Lek 6 million. For savings and loan associations, the limit will remain at Lek 2 million until Albania joins the European Union. Upon accession, coverage for deposits in banks and savings and loan associations is set to reach the equivalent in lek of Euro 100,000.

The draft law also introduces a new mechanism for protecting deposits with temporary high balances. Individual depositors may receive additional compensation of up to Lek 15 million if the funds were transferred to a bank or savings and loan association participating in the scheme - or became legally transferable - within the six months preceding the payout event.

Starting July 1, 2027, a special regime is also proposed for deposits originating from residential real estate transactions, inheritance, birth, divorce, retirement, termination of employment, insurance and reinsurance payouts, and compensation for wrongful criminal convictions. These deposits will be eligible for compensation of up to Lek 15 million above the standard coverage limit, provided the transactions occurred within the six months prior to the payout event. Following EU accession, this amount is projected to reach the equivalent in lek of Euro 500,000. The draft also provides for setting annual premiums based on risk and the target level of insurance funds, as well as diversifying borrowing sources, in order to strengthen the financial capacity of the Deposit Insurance Agency.

Furthermore, the aim is to expand the Agency's role in maintaining financial stability by participating in deposit compensation when the Bank of Albania determines that deposits are unavailable, and by financing the transfer of assets during the compulsory liquidation proceedings of a scheme member.

The draft law "On Deposit Insurance" is part of the inter-institutional plan to fulfill obligations related to Chapter 9, "Financial Services," within the framework of Albania's integration into the European Union.