15. Cash and balances with the central bank

Obligatory reserve

During the course of the working day, the Bank may use funds from the obligatory reserve account for ongoing payments, on the basis of an instruction submitted to the Central Bank of Poland (NBP). However, the Bank must ensure that the average monthly balance on this account complies with the requirements set in the obligatory reserve declaration.

Funds on the obligatory reserve account bear interest of 0.9 of the rediscount rate for bills of exchange. As at 31 December 2013, this interest rate was 2.475%.

Restricted cash:

Cash pledged in the amount of  PLN 17 499 thousand (PLN 6 661 thousand as at 31.12.2012) as collateral for securities' transactions conducted by the Brokerage House of PKO BP SA are deposited in the National Depository for Securities (KDPW ), CCP as part of the Guarantee Fund for the Settlement of Stock Exchange Transactions. Each direct participant who holds the status of settlements-making participant is obliged to make payments to the settlement fund which guarantees a proper settlement of the stock exchange transactions covered by that fund. The amount of the payments depends on the value of transactions made by each participant and is updated by KDPW, CCP on a daily basis.

In addition, the Bank had restricted cash as a part of issuance stabilising actions for the selling shareholder in the amount of
PLN 14 629 thousand, blocked on the stabilisation manager’s account.

In the statement of cash flows, these funds are presented as restricted cash. As at 31 December 2013 and 31 December 2012 their value amounted to PLN 32 078 thousand and PLN 6 661 thousand respectively.

Cash and cash equivalents

Amounts on the current account in the Central Bank, cash and other are entirely treated as cash and cash equivalents for the purposes of the statement of financial position.