Overall, Latvian credit institutions take decisions to terminate or refuse business relationships individually, assessing risk mitigation measures. However, in certain situations, deficiencies in the practical application of requirements have been identified – this was concluded in the thematic review conducted by Latvijas Banka in 2024 on the availability of payment accounts in Latvian credit institutions.
In the review, Latvijas Banka assessed the formation of costs for account opening and servicing, the procedure for not initiating and terminating business relationships, communication with customers, as well as the servicing of low-risk customers. Overall, the review did not identify any disproportionate requirements and avoidance or unjustified decision-making regarding cooperation with specific customer risk groups.
A decrease in the number of terminated business relationships is observed in credit institutions. Service provision, transport, logistics, as well as construction are the sectors where the termination of business relationships occurs more frequently than in others. These sectors simultaneously become more prominent in the shadow economy segment, while the logistics sector is also exposed to the risks of sanctions circumvention.
Credit institutions do not actively offer a basic account service to individuals, which is considered a significant drawback as it is an essential aspect of the availability of financial services. Credit institutions are committed to taking measures to improve the practice of offering basic accounts.
It has been found during the review that the account package for a legal entity is more expensive in Latvia than in the other Baltic countries. Moreover, the commission fees are often indicated inaccurately, making it difficult for customers to plan their expenses. Furthermore, it has been concluded that improvements are needed not only in the application of anti-money laundering requirements but also in communication with customers and in the introduction of a transparent pricing policy understandable to customers.
The findings of the review along with examples of good and undesirable practices are compiled in the "Guidelines for Ensuring Effective Financial Inclusion". The guidelines aim to inform financial market participants about the expected actions by Latvijas Banka for providing more inclusive financial services, and to provide practical recommendations and examples on how this can be achieved.
The review was carried out in all Latvian credit institutions – nine credit institutions and two branches of credit institutions – that offer payment account services.