In accordance with the Deposit Guarantee Law, any client of Latvia's banks and credit unions, either natural persons or legal entities, is guaranteed the disbursement of compensation for any type of deposits in all currencies in amount of up to 100 000 euro in each bank or credit union (in total for all accounts, in case of several accounts with the same bank). The state-guaranteed amount refers to deposits, current account balances, wage accounts, savings accounts, etc.
The Deposit Guarantee Fund of Latvia (hereinafter, the Fund) was established and has been operating based on the Deposit Guarantee Law. It is created to ensure disbursement of compensation to depositors for deposits made with the participant of the deposit guarantee scheme that have become unavailable, i.e. in a case where the participant in the deposit guarantee scheme is incapable of paying out a deposit and its licence is cancelled or the participant has been declared insolvent by a court, or in another case where Latvijas Banka has established that the deposit taker is incapable of paying out the deposit to the depositor and has decided on the occurrence of unavailability of deposits.
Members of the fund are deposit takers, which are banks registered in the Republic of Latvia (including their branches in the European Union Member States) and in the cases provided for in the Deposit Guarantee Law – a Latvia branch of a European Union Member State bank, as well as branches of foreign banks and credit unions.
The accrual, management of the assets and payment of the guaranteed compensation of the Fund shall be performed by Latvijas Banka. Payment of the compensation in accordance with the law shall be commenced no later than on the eighth day after declaration of unavailability of deposits. The Deposit Guarantee Law provides for the following: if the Fund does not have sufficient funds to pay the guaranteed compensation in accordance with the law, Latvijas Banka may conclude a loan agreement for borrowing the missing amount from the deposit taker or the deposit guarantee fund of another Member State. And finally, if other borrowing options have been exhausted, the Ministry of Finance shall provide the state budget funds for the payment of the guaranteed compensation.
The assets of the Fund are accrued from quarterly payments by deposit takers (i.e. banks and credit unions), which is a percentage of the amount of the attracted deposits defined in the Deposit Guarantee Law, adjusted by a risk factor, as well as from the income generated by the management of the Fund's assets.
Members of the the Deposit Guarantee Fund of Latvia
Deposit Protection Scheme