In case of a bank failure, IPAB uses the resources banks themselves have contributed in the form of ordinary fees to a preventive fund to guarantee reimbursement of savings to the affected depositors.

Banks are obliged to pay IPAB the ordinary and extraordinary fees established by the Governing Board. Ordinary fees are payable monthly and may not be less than 4 one thousandths of the value of the banks’ liability operations in a year. When, due to conditions in the banking system, IPAB lacks sufficient funds to meet its obligations, the Governing Board may establish extraordinary fees not exceeding 3 one thousandths of the value of the banks’ liability operations in a year.

The sum of both types of fees may not exceed 8 one thousandths of the value of the banks’ liability operations in a year.

Basis for Collection of Fees

Full service banks deliver to IPAB monthly ordinary fees equal to one twelfth of four one thousandths of the monthly average of the daily balances of their liability operations in the month in question.

Fixed Fees Scheme

At present, IPAB operates with a uniform fees scheme. Notwithstanding, the IPAB Governing Board may establish different ordinary fees for banks depending on their risk exposure, based on each bank’s capitalization level and other general indicators.

Banking Savings Protection Fund

The Central Bank is responsible for charging banks’ accounts monthly the amount of the fees they are required to pay, crediting the same amount to IPAB’s account. The money in the Savings Protection Fund is invested in high liquidity government securities or deposits in the Central Bank. IPAB may maintain in cash or in bank deposits only the amounts necessary to meet its operative and administrative expenses.

In accordance with the provisions of the Law of Banking Savings Protection, IPAB uses three fourths of the fees for service of debt related to support programs for bank debtors and savers. The remaining fourth, after covering operative and administrative expenses, is destined to the Banking Savings Protection Fund.

With payment of 4 banks’ guaranteed obligations, the Fund reached a deficit of 4.993 billion pesos in July 2002; this situation has been reverted over time with the use of fees and recoveries, closing 2007 with a surplus of 467 million pesos.

The following graph shows the performance and evolution of the Banking Savings Protection Fund.

Fees Paid by Banks

The following table and graph show the annual figures for fees paid by full service banks:

Annual fees paid by Full Service Banks

Years	Amount (millions of pesos)
1999	4,554
2000	5,626
2001	5,410
2002	5,018
2003	5,277
2004	5,852
2005	6,405
2006	6,697

 

The amounts of fee payments made by each bank are published quarterly in the Official Gazette of the Federation.

Financing under LPAB Article 46

In case of a bank failure, and when funds from fees that banks have contributed to a preventive fund are insufficient to meet the obligations IPAB is required by law to pay, Article 46 of the Law of Banking Savings Protection authorizes IPAB to contract financing as necessary to overcome the problems of insolvency. At the end of 2006 the limit was 133.009 billion (thousands of millions) pesos.