The draft directive recasts current legislation with an aim to improve protection provided to savers with deposits of up to 100,000 euros (about $137,000), Xinhua reported.
Under the agreed directive, all banks will be required to join a DGS so that all their covered deposits are protected. DGSs must be supervised on an ongoing basis and have to perform regular stress tests of their systems.
The directive also further reduces the time limit for paying out depositors from the current 20 working days to seven working days by 2024.
"It's a very important achievement especially regarding the protection of the depositors in those member states that have been more severely hit by the financial crisis," said Yannis Stournaras, EU Eco-Fin president and Greek finance minister.
Another main change is that depositors will no longer have to submit an application for repayment if their deposits become unavailable, so that the determination of their eligibility for repayment is further simplified and harmonized.
The Council is expected to adopt its position at the first reading of the directive in early March without further discussion. The European Parliament is expected to discuss in March and adopt the directive at its plenary session in April before it enters into force.