The Central Bank intends to dip into a €388 million industry-funded deposit protection account (DPA) to meet the compensation payments due to eligible depositors of Irish Bank Resolution Corporation, which is being liquidated by the Government.

The regulator wrote to credit institutions across the country on Monday to inform them of its move. The payouts relate to the deposit guarantee scheme (DGS), which is designed to protect depositors in the event that a bank, building society or credit union authorised in Ireland fails.

Deposits up to €100,000 per person are protected by the DGS, which is administered by the Central Bank.

Banks, building societies and credit unions are obliged to maintain funds in the DPA equivalent to 0.2 per cent of their total deposits. The DPA is used by the Central Bank for any compensation payments due under the DGS.

The final amount to be paid out in compensation will not be known for some weeks, the Central Bank said in its letter. It told the institutions they will be charged in “proportion to the amounts of their respective deposits in the DPA”.

The first compensation was due to be paid this week.

Subsequent payouts are likely as the liquidators work through the verification process with depositors.

The Central Bank said it would lodge a claim with IBRC’s liquidators in relation to the payments made.