Can the escrow accounts held for Payment Institutions be considered as operational deposits ?
Payment Institutions are legally required to transfer the funds they receive to dedicated escrow accounts. These accounts are generally held in the books of Credit Institutions and mirror the deposits collected by the Payment Institutions. Payment Institutions cannot withdraw these funds freely.
Deposits that are maintained by payment institutions in accordance with their legal obligation to safeguard funds received from their clients (e.g. escrow accounts) may be considered as operational deposits raised in the context of an established operational relationship according to Article 27(1)(a) of the Commission Delegated Regulation (EU) 2015/61 (LCR DA) to the extent that the conditions set out in Article 27(4) LCR DA are met.
Update 26.03.2021: This Q&A has been reviewed in the light of the changes introduced to Regulation (EU) No 575/2013 (CRR) and continues to be relevant.