Latvia’s Central Bank Addresses Basic Account Access and Corporate Financial Services

Latvia’s central bank, Latvijas Banka, is actively working to ensure both individuals and businesses have access to essential financial services, particularly basic payment accounts. The bank is also focused on improving communication between financial institutions and their clients, and addressing concerns regarding disproportionate demands during account opening processes.

Ensuring Access to Basic Payment Accounts

Latvijas Banka emphasizes that full participation in modern society and economic activity requires access to cashless payment options. Regulatory requirements for opening accounts are designed to be proportionate, and the bank encourages individuals and businesses to understand their rights. A basic account, as defined by the Law on Payment Services and Electronic Money, provides EU residents with access to fundamental payment account functionalities, regardless of their citizenship, residency, or financial status. Latvijas Banka states that credit institutions are limited in the circumstances under which they can refuse to open a basic account.

Addressing Concerns for Legal Entities

The process of opening a payment account for a legal entity is a civil transaction governed by regulations, including the Anti-Money Laundering and Terrorism and Proliferation Financing Act. Credit institutions are legally obligated to assess and manage risks related to money laundering and sanctions evasion. However, Latvijas Banka clarifies that requesting documentation for all cooperation partners in every case, without a risk-based assessment, does not constitute proper customer due diligence.

The bank has instructed credit institutions to communicate clearly with clients, informing them that a lack of information about business partners is not an automatic basis for refusing to open an account. Clients can provide the information they have available, and if details about partners are unknown at the outset, a general description of the business model is sufficient.

Account Costs and Market Transparency

Opening an account for consumers is generally free of charge in Latvia, Lithuania, and Estonia, according to Latvijas Banka. Fees for legal entities are determined by the credit institution’s tariffs, risk assessment, and the resources required to manage client-related risks. The central bank notes that multiple financial market participants operate in Latvia, allowing individuals and businesses to compare service prices and choose the most suitable provider.

Improved Cooperation and Ongoing Monitoring

Data from a survey conducted by SIA “RAIT Custom Research Baltic” on behalf of Latvijas Banka indicates that cooperation between companies and banks regarding access to financial services has improved over the past two years. Almost all surveyed Latvian companies have an account with a Latvian credit institution, and the number of companies experiencing difficulties in banking relationships is decreasing.

Latvijas Banka continues to monitor the market, evaluate account opening costs, and analyze practices in other EU member states, such as Lithuania and Estonia. The bank also offers a mediation process to resolve disputes between clients and credit institutions, providing a constructive negotiation path when previous attempts at resolution have been unsuccessful.

Reporting Disproportionate Demands

Individuals and businesses are encouraged to contact Latvijas Banka if they encounter disproportionate demands from credit institutions. The bank will investigate such cases and, if necessary, issue instructions to improve internal procedures.