The Dutch government has agreed to pay out part of Dutch savers' lost deposits with Icelandic Internet bank Icesave, relieving Dutch banks of part of the burden, Dutch daily NRC Handelsblad reported on Wednesday.

Icesave's parent bank Landsbanki was put under government control in October. About 120,000 Dutch savers have some 1.6 billion euros (about US$2.02 billion) in deposits with Icesave, which has since been frozen.

Under the terms of the guarantee scheme thrashed out by Dutch Finance Minister Wouter Bos and his Icelandic counterpart, the first 20,887 euros of each savings account will be paid by Iceland while the Netherlands will reimburse the rest, to a maximum of 100,000 euros.

The balance between 20,887 and 100,000 euros was originally expected to be funded by Dutch banks, each paying a sum in line with the size of their share in the market. But this was vehemently opposed by Dutch banks, especially market leader Rabobank, which has a 40 percent share in the Dutch savings market.

Bos said on Tuesday that Dutch banks will only have to fund the difference between the sum guaranteed by Iceland and some 38,000 euros. The remainder, some 62,000 euros, will be paid by the Dutch treasury.

Dutch savers have an average of 13,333 euros in their Icesave accounts.

(Xinhua News Agency December 4, 2008)