December 22 (SeeNews) - The European Bank for Reconstruction and Development (EBRD) said on Thursday it is extending a stand-by credit line of 24 million euro ($25.1 million) to the Deposit Insurance Fund of Kosovo (DIFK).
The credit line approved by the bank's board will be used to provide funds compensating insured depositors if and when required, the EBRD said in a notice.
The loan facility is fully guaranteed by the republic of Kosovo, the EBRD added. It is the second stand-by credit line provided to DIFK by the bank.
"The credit line will improve stability and confidence in the banking sector in Kosovo as the individual deposit insurance coverage will increase", EBRD said in the notice.
The credit line will be provided in three tranches in the 2016-2020 period. DIFK will get 14 million euro at the signing of the deal, 6 million will be made available in 2018, and 4 million euro will be disposable in 2020.
"The second credit line of 24 million euro agreed with the EBRD will strengthen the financial sustainability of DIFK and will support the increase of the amount of the level of deposits insured to Kosovo citizens", Kosovo's finance minister, Avdullah Hoti, said in a separate press release from the EBRD.
DIFK is an independent public institution established in 2011 to manage the deposit insurance system in Kosovo. It insures deposits of up to 4,000 euro, as the maximum coverage level will increase to 5,000 euro as of January 1, 2018.