SKOK Wolomin credit union declared insolvent

Photo: glowimages

The KNF made its decision unanimously on Thursday, several weeks after it appointed a commissioner to manage the SKOK Wolomin credit union.

Serious trouble for the financial institution began in October, when its CEO and deputy CEO were arrested. They face charges of acting against the interests of the company and of participation in organised crime.

The KNF's commissioner examined the documentation of the credit union and found that it was unable to pay off its customers. Expired loans accounted for almost 80 percent of its credit portfolio.

After the decision on suspending the activity of SKOK Wolomin, the KNF asked the Polish credit union general assembly, Kasa Krajowa, if it would provide support to the troubled cooperative.

However, the association claims that, under present laws, it cannot provide a liquidity boost to the credit union.

“The so-called liquidity loan may only be granted if a credit union is able to pay it back,” said Andrzej Dunajski, spokesperson for the general assembly.

As a result, SKOK Wolomin customers will probably have to turn to Poland's Bank Guarantee Fund (BFG) to get their deposits back.

Credit unions are only subject to guarantees from the BFG since November 2013. Before that, they were also not under the supervision of the KNF.

When a bank or a credit union is declared bankrupt, the fund returns deposits worth up to 100,000 euro to every entitled person. (kw)

Source: IAR