5. Are returns (interest) covered by the IPAB?

Yes, the IPAB covers both the payment of the principal and interest, up to the 400,000 UDI limit, on those transactions considered guaranteed obligations in terms of the Law of Banking Savings Protection.

6. What transactions are not covered by the IPAB?

The IPAB does not guarantee the following transactions:
Those other than bank credits, loans and deposits of money, even when these are offered or advanced in bank branch offices, such as:
Those transactions that correspond to the “money desk”, and
Subordinated debentures.

Those transactions that may be offered or advanced in bank branch offices, carried out with:

• Investment funds;
• Insurance companies;
• Savings and loans associations
• Stock exchanges;
• Development banks, such as Banjército, Bansefi, Banobras and Nafin.

Obligations and deposits for the benefit of:
Financial entities, national or foreign;
Companies that are part of the financial group to which the bank belongs, stockholders, members of the board of directors and employees in the first two hierarchical levels of the institution, legal representatives with administrative capacities and general managers.

The obligations owed by the bank that are in the form of negotiable instruments, as well as bearer instruments;
Those transactions that have not observed applicable legal, regulatory and administrative provisions and/or those that deviate from sound banking practices and methods;
Transactions related to illicit acts or transactions, as indicated in article 400 Bis of the Federal Penal Code (commonly known as money laundering).

7. What financial entities carry out transactions that are covered by the IPAB?

All commercial banks (banking institutions) constituted in accordance with Mexican laws.

8. What happens with those transactions that are not covered?

The IPAB does not cover these amounts; however, if the institution fails (dissolution or business reorganization process), the holders of said transactions retain their rights before the bank (banking institution) and may present claims for the amount deposited in accordance with the contracts or deeds in which the corresponding transaction has been documented, as well as exercise the corresponding actions that are applicable by law.

9. What happens with those transactions that exceed the 400,000 UDI limit?

The IPAB does not cover any amount beyond the equivalent of the 400,000 UDI limit for guaranteed obligations, but the holders of these transactions retain their rights and may present claims to the bank (banking institution) for payment of the balance not covered by the IPAB, pursuant to the terms laid out in the Law of Credit Institutions.

The balance shall be divided as per the percentages specified as corresponding to each of the co-owners as established in the contract. If this percentage was not established, then the balance will be divided amongst the existing number of co-owners in equal parts.

10. Is my bank obligated to provide information on whether a product that they are offering me is covered by the IPAB?

Yes, in accordance with article 6 of the Law of Banking Savings Protection, all banks (banking institutions) are obligated to inform their clients on the type and amount of transactions that are covered by the IPAB.

11. How does the IPAB guarantee my funds if I have multiple accounts or transactions in the same bank.

Yes. To determine the UDI value of accounts denominated in United States dollars, the peso equivalency will be calculated based on the exchange rate published by the Central Bank in the Official Gazette of the Federation for the banking day before the day IPAB publishes the resolution regarding the bank’s closing.

Equivalencies in other currencies will be calculated by the Central Bank at IPAB’s request, using the U.S. dollar exchange rate in force in international markets on the day IPAB publishes the resolution regarding the bank’s closing.

12. How does the IPAB guarantee my funds if I have multiple accounts or transactions at different banks.

The IPAB pays guaranteed obligations for an amount equal to 400,000 UDIs in each bank (banking institution) independently.

13. What happens if I have funds at two separate banks and they merge?

If two banks merge to form a single bank, the coverage limit (400,000 UDIs) will be applied adding the total amount of all the funds held at the two institutions, now merged; if the resulting amount exceeds the aforementioned limit, the exceeding amount shall not be covered by the IPAB.

14. How does the IPAB’s protection work when I am co-owner of an account with more than one owner (joint account)?

For accounts in which any of the owners or co-owners may individually exercise full rights to make withdrawals of the balance of the account (joint-tenancy account), the IPAB will pay the guaranteed obligations up to an amount that will not to exceed the coverage limit (400,000 UDIs), to the individual who is identified or registered in the systems of the bank as the first owner or first co-owner.

Regarding accounts in which the signatures of all owners or co-owners are required to make withdrawals, cancellations, or changes to the account (tenants-in-common accounts), the IPAB will pay the aforementioned owners or co-owners the amount corresponding to the percentage expressly established in writing by the owners or co-owners of the account or, failing that, determined according to the corresponding information that the bank maintains in its systems. In the event that such a percentage has not been established, the account balance will be divided into as many equal parts as there are owners or co-owners.

15. Does the death of any co-account holder affect deposit coverage offered by the IPAB for joint accounts?

No. For a joint-tenancy account, in the event of the death of the person who is identified or registered in the systems of the bank as the first owner or first co-owner, the IPAB will pay the balance of the guaranteed obligations in such account, without exceeding the limit coverage (400,000 UDIs), to the owner or co-owner that submits the payment request.

Regarding tenants-in-common accounts, upon the death of one of the owners or co-owners, the IPAB will determine, according to that which is laid out in the next paragraph, the amount corresponding to each of the beneficiaries of the deceased owner or co-owner. The beneficiaries must have been designated as such in the account itself.

Of the amount that the deceased owner or co-owner was entitled to receive, the IPAB will determine the amount corresponding to each of his/her beneficiaries for the tenants-in-common account. To determine said amount, the Institute will divide the deceased owner or co-owner’s share of the account balance by the total number of beneficiaries, according to the percentage expressly stated in writing by the owner or co-owner or, failing that, according to the bank’s information. If the deceased owner or co-owner has not established a percentage for each of the beneficiaries, his/her share of the account balance will be divided into as many equal parts as there are beneficiaries.

16. Upon the failure of the bank where I have my account or transaction, how will the payment that I will receive from the IPAB be calculated?

The balance will be calculated taking into account the principal plus interest of the guaranteed obligations, converted to UDIs on the day the IPAB publishes the resolution regarding the bank failure. The payment of guaranteed obligations will be in local currency; the UDI value quoted on the payment day will be used to make the conversion from UDIs to Mexican pesos.

17. Does the IPAB cover deposits in foreign currencies?

Yes. To determine the UDI value of accounts denominated in US dollars, its equivalency in local currency will be calculated based on the exchange rate published by the Central Bank in the Official Gazette of the Federation for the banking day previous to the date on which the publication of the resolution regarding the failure of the bank takes place.

Equivalencies in other currencies will be calculated by the Central Bank at the IPAB’s request, using the US dollar exchange rate in effect in international markets on the day of publication of the resolution regarding the bank failure.

18. Does the IPAB protect the deposits of individuals that are not residents of Mexico?

Yes. As long as such deposits are in banks (banking institutions) constituted under Mexican law, the place of residence of the depositor does not affect the protection provided by the IPAB.

19. Does the IPAB cover corporate and personal accounts jointly or separately.

The protected deposits in corporate accounts owned by a legal person are insured separately and independently from the protected deposits in accounts whose owners are partners of the company (natural persons).

20. Should any information query or complaint arise regarding financial services provided by banks, may I go to the IPAB?

The IPAB is not the appropriate authority to handle these kinds of queries or complaints. Banking and financial services users can turn to the National Commission for the Protection of Users of Financial Services (Condusef) which aims to promote, advise, protect, and defend the rights and interests of users in relation to financial institutions, including banks, as well as to arbitrate their disputes in an impartial manner and to provide fairness in their relationship.

21. Where are the IPAB’s headquarters located?

The IPAB’s headquarters, and only offices, are located in Mexico City, at 19 Varsovia Street, Colonia Juarez, Zip Code 06600, Cuauhtémoc, Distrito Federal.

22. What happens if the bank where I have my account or transaction is closed and resolved (after the bank’s operating license has been revoked)?

The IPAB will establish the necessary mechanisms so as depositors can recover their money as soon as possible and can afford their daily needs.

23. If a bank is closed and resolved who is responsible for managing the bank?

The IPAB will act as receiver of the bank and shall be responsible for its administration. In addition, prior to the closure of the bank, the IPAB will have to determine the operations to be implemented to resolve the bank and deal with the bank’s problems, at the least cost possible.

24. What are the measures that the IPAB can establish in order to resolve a bank (after the bank’s operating license has been revoked)?

The IPAB can implement the following resolution operations:

• Payment of guaranteed obligations;
• Transfer of assets and liabilities of the failed bank to a banking institution in operation; and
• Transfer of assets and liabilities of the failed bank to a banking institution organized and managed by the IPAB (known as a Bridge Bank)

25. If the IPAB determines that the payment of guaranteed transactions or accounts is to be carried out, what is the procedure and deadline for payment?

The IPAB will make public the procedure for payment within five working days from the date the IPAB assumes the position of receiver. After the date that the procedure is made public, the IPAB has ninety days to pay the guaranteed transactions or accounts.

26. What happens to those guaranteed transactions or accounts transferred from the failed bank to an operating bank or a bank managed by the IPAB?

The operating bank or bank managed by the IPAB will respect, until maturity, the terms and conditions agreed upon between the bank in a resolution process (liquidation) and the holders of the transactions or accounts that have been transferred. Thus, it may not charge different fees nor change the originally agreed upon interest rates.