On applying restrictions to JSC “Latvijas Krājbanka”

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Riga, 17.11.2011

Press Release

On applying restrictions to JSC “Latvijas Krājbanka”

The Board of the Financial and Capital Market Commission (the Commission) during the 17 November 2011 meeting made a decision on applying the restrictions to the JSC “Latvijas Krājbanka”.

The decision is adopted based on the possible further impact of the developments in the JSC “Latvijas Krājbanka” (hereinafter – the Bank) parent undertaking on the Bank’s financial stability and solvency, as well as considerable deposit withdrawal. The Commission is obliged to immediately take the measures in accordance with the provisions of the Credit Institution Law in order to prevent deficiencies in the activities of the credit institution that may threaten the stable operation of the credit institution or the credit institution sector on the whole, as well as interfere in the conduct of proper transactions and the provision of financial services.

In accordance with above decision, restrictions are set on the fulfilment of obligations by the Bank, such as debit transactions in any currency, including through online banking, ATMs and by cash, with clients – both natural and legal persons in the amount that exceeds 100 000 euro per calendar month.

Restrictions on the settlement of liabilities are not applicable to the money assets that will be transferred into the client accounts after the date of taking this decision, also to the payments into the national budget by the Bank and its clients, payments to the state and local government authorities (incl. the   Bank of Latvia, the Commission, the Deposit Guarantee Fund), transactions with the Bank of Latvia, the acquisition of the treasury bills, payments to the commercial companies operating in the area of commodity production and provision of services to the sectors governed by the state and local government authorities, deposit interest payments, client payments to the Bank and its subsidiaries.

The above limitation per client set by the Commission is commensurable with the amount of compensation prescribed in the Deposit Guarantee Law, namely, the rights of existing clients of the credit institution to the guaranteed compensation in the amount up to 100 000 euro or an equivalent in lats, in accordance to the currency exchange rate set by the Bank of Latvia on the date of the occurrence of unavailability of deposits, are still in force.

Thus further operation and financial stability of the credit institution will be predictable causing moderate changes in deposit volumes if the payments to the clients are made in amount of up to 100 000 euro, thus ensuring sound operation and solvency of the credit institution.

Restrictions become effective upon adoption of the decision and the period of restrictions on the settlement of liabilities is effective for 1 month.

Anna Dravniece
Head of the Financial and Capital Market Commission Office

For additional information:
Ieva Upleja
Chief Public Relations Specialist
Financial and Capital Market Commission Office
Phone: 67774807; email: ieva.upleja@fktk.lv


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