The Saeima¹ has adopted and
the President has proclaimed the following law:

Deposit Guarantee Law

Chapter I
General Provisions

Section 1. Terms Used in the Law

(1) The following terms are used in the Law:

1) deposit - a credit balance that has resulted from crediting money into the depositor's account or from daily transactions of a credit institution and that a deposit taker has the obligation to repay in accordance with the provisions of the law or the terms and conditions of a contract, including a term deposit and a savings deposit. The following credit balance shall not be considered a deposit:

a) the existence of which may only be proved by the financial instruments referred to in Section 3, Paragraph two of the Financial Instrument Market Law, except for the financial instrument that is a savings product proven by a confirmation issued to a specific person;

b) the principal amount of which is not repayable at nominal value;

c) the principal amount of which is only repayable at nominal value according to a specific guarantee or agreement ensured by a credit institution or a third person;

2) eligible deposit - a deposit, except for such deposits for which a guaranteed compensation is not disbursed in accordance with the provisions of this Law;

3) covered deposit - a part of the eligible deposit which is disbursed as a guaranteed compensation in case of the unavailability of deposits in accordance with the procedures and in the amount laid down in this Law including therein also the interest accrued for the deposits made;

4) joint deposit - a deposit made jointly by two or more persons or the right to the use of which has been defined for two or more persons in a contract entered into with a deposit taker in writing;

5) deposit taker - a credit institution, a credit union registered in Latvia, a branch of a credit institution in Latvia registered in a foreign country, a branch of a credit institution in Latvia registered in a European Union Member State (hereinafter - the Member State) that is a member of a deposit guarantee fund in accordance with the procedures laid down in laws and regulations;

6) unavailability of deposits - inability of a deposit taker to disburse deposits if at least one or more of the circumstances referred to in this Clause have set in, irrespective of the order of the setting-in thereof:

a) a court has declared the deposit taker insolvent;

b) the licence (permit) for the operation of a credit institution or credit union has been cancelled for the credit institution or credit union;

c) Latvijas Banka has established that the deposit taker is not able to disburse a deposit to a depositor due to deterioration of the financial position of the deposit taker and has taken the decision on the occurrence of the unavailability of deposits;

7) depositor - a person or, in the case of a joint deposit, each of the persons who have a deposit with the deposit taker;

8) deposit guarantee fund - an aggregate of property that consists of the payments made by deposit takers and the management of which is ensured by Latvijas Banka;

9) target level - the sum of the financial resources available in the deposit guarantee fund that is to be accrued in accordance with the procedures laid down in this Law;

10) available financial resources - cash, deposits, and low-risk assets that can be liquidated within seven working days;

11) payment commitments - payment commitments of a deposit taker towards a deposit guarantee fund that are fully collateralised by low-risk assets, if the collateral is not encumbered by any third person encumbrance.

(2) Other terms used in the Law correspond to the terms used in Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012.

[24 March 2022; 23 September 2021; 19 September 2024]

Section 2. Purpose of the Law and Subjects of the Application Thereof

(1) The purpose of this Law is to promote safe and stable operation of a deposit guarantee scheme that would increase depositor confidence in the financial sector in general.

(2) The Law prescribes the general principles of guarantees for deposits with deposit takers, the procedures for establishing, managing, and using a deposit guarantee fund, and also the mutual cooperation between deposit guarantee funds.

(3) The provisions of this Law shall be applicable to the following:

1) credit institutions and their branches, credit unions registered in Latvia, and also branches of credit institutions in Latvia registered in foreign countries;

2) branches of credit institutions in Latvia registered in the Member States if they are members of a deposit guarantee fund.

(4) The deposit takers referred to in Paragraph three of this Section are not entitled to accept deposits, unless they have become members of a deposit guarantee fund or a deposit guarantee fund of another Member State.

(5) If the provisions of this Law are applicable to branches of credit institutions in Latvia registered in the Member States, unavailability of deposits shall set in from the moment when it has occurred in accordance with the legal acts of the relevant Member State.

(6) The provisions of this Law, except for the case referred to in Section 25, Paragraph 6.¹, shall not be applicable to branches of credit institutions in Latvia registered in the Member States if the legal acts of those countries provide for deposit guarantee in branches of credit institutions in other countries, including Latvia, and cover all deposits provided for in this Law, moreover the guaranteed compensation is not lower than the guaranteed compensation specified in this Law.

(7) The provisions of this Law shall not be applicable to a deposit taker for whom the unavailability of deposits has set in by the day of coming into force of this Law.

(8) Latvijas Banka shall take the decision on the setting in of the unavailability of deposits within five working days from the day when it has established that the deposit taker is not able to disburse deposits.

(9) Latvijas Banka shall, upon taking the decision referred to in Paragraph eight of this Section on the setting in of the unavailability of deposits, immediately inform the Ministry of Finance of the amount of the covered deposits of the deposit taker and the financial resources available in the deposit guarantee fund, and also provide any other information thereto which could significantly affect the possibility to provide the financial resources of the deposit guarantee fund for the disbursement of guaranteed compensation in accordance with the procedures laid down in this Law.

(10) Contesting and appealing the administrative act issued by Latvijas Banka that is referred to in Paragraph eight of this Section shall not suspend its operation.

[24 March 2022; 23 September 2021; 19 September 2024]

Section 3. Guaranteed Compensation

(1) Irrespective of the day on which the deposit was made, the guaranteed compensation to one depositor for the deposit made with the deposit taker shall be equal to the amount of the eligible deposit but not more than EUR 100 000.

(2) The right of the depositor to the guaranteed compensation and the commitments thereof towards the deposit taker that will fall due by or on the day when the unavailability of deposits has set in shall be set off, and it shall be taken into account when calculating the eligible deposit.

(3) The guaranteed compensation shall be disbursed in euros.

(4) A depositor shall lose the right to claim towards a deposit guarantee fund for the disbursement of the guaranteed compensation on the day when five years have elapsed since the day when the unavailability of deposits has set in or from the day when circumstances forming the basis for the deferral of the disbursement of guaranteed compensation specified in Section 27, Paragraph one of this Law have ceased to exist.

(5) Paragraph two of this Section shall not be applicable to the claims which have been included in the covered assets, and also in the event of the implementation of a cross-border programme in accordance with the Covered Bonds Law.

[11 January 2018; 27 May 2021; 24 March 2022]

Section 4. Additional Guaranteed Compensation

(1) In addition to the provisions of Section 3, Paragraph one of this Law, the guaranteed compensation for one depositor shall be provided in the amount of not more than EUR 200 000 within three months from the day on which the initial deposit was made in respect of the deposits of natural persons:

1) which consist of monetary amounts from transactions with residential immovable property owned by the person;

2) which consist of the social benefits, compensations disbursed to the person, and deposits intended for other social purposes in the cases specified in laws and regulations;

3) which have been disbursed as a compensation for damage of criminal nature or wrongful conviction of the person in accordance with the procedures laid down in laws and regulations.

(2) A depositor shall provide the information necessary for the deposit taker which confirms that the deposit corresponds to the provisions of Paragraph one of this Section.

Section 5. Guaranteed Compensation for a Joint Deposit, Several Deposits or the Deposit of a Minor

(1) The guaranteed compensation for a joint deposit shall be disbursed in the amount specified in Section 3, Paragraph one of this Law to each person who has made the joint deposit. The amount of the guaranteed compensation shall be determined by taking into account the joint deposit share of each person who has made the joint deposit which has been specified in the contract entered into with the deposit taker. If the share of each person in the joint deposit has not been specified, the joint deposit shall be divided in equal shares, and the amount of the guaranteed compensation shall be determined by taking into account that share.

(2) If a depositor manages financial resources belonging to another person with the deposit taker, the right to receive the guaranteed compensation shall be vested in a person who can prove his or her rights to claim against the financial resources managed by the depositor, provided that the deposit taker or, in the case referred to in Section 5.¹, Paragraph two of this Law, the depositor has identified or is able to identify that person prior to the day when the unavailability of deposits has set in.

(3) Several deposits or several shares of a joint deposit, irrespective of the currency of the deposit, are aggregated as an eligible deposit for the purpose of calculating one covered deposit.

(4) In accordance with the decision taken by Latvijas Banka on the manner and procedures for disbursing the guaranteed compensation, the guaranteed compensation of a minor depositor may be transferred to such an account which has been opened in the name of the minor with another deposit taker and the conditions for the use of financial resources of this account shall be similar to those specified for the use of financial resources in the account by the deposit taker for whom the unavailability of deposits has set in. In the decision on the manner and procedures for disbursing the guaranteed compensation, Latvijas Banka shall provide for the procedures by which the lawful representative of a minor depositor shall be informed of the transfer of the guaranteed compensation of a minor depositor.

[27 May 2021; 23 September 2021; 19 September 2024]

Section 5.¹ Obligations of Deposit Takers and Depositors Regarding the Management of Financial Resources Belonging to Another Person

(1) Prior to commencing a business relationship with a depositor, including with the depositor referred to in Section 23 of this Law, a deposit taker shall have the obligation to verify whether the depositor ensures the management of financial resources belonging to another person with the deposit taker.

(2) A deposit taker shall take all the necessary actions to obtain, either prior to commencing or during a business relationship, from the depositor who manages the financial resources belonging to another person with the deposit taker a confirmation that the depositor ensures the identification of those other persons and the accounting of the financial resources belonging to them.

(3) If a depositor intends to ensure the management of financial resources belonging to another person with the deposit taker, the depositor shall have the obligation to immediately inform the deposit taker thereof, unless it has already been provided with that information prior to commencing a business relationship.

[19 September 2024]

Chapter II
Deposit Guarantee Fund

Section 6. Competence of Latvijas Banka

(1) Latvijas Banka shall ensure supervision of the deposit takers in accordance with the provisions of this Law, accrual of financial resources in the deposit guarantee fund, management of the deposit guarantee fund, and disbursement of the guaranteed compensation, and also implement the creditors' right to claim against the deposit taker in the amount of the disbursed guaranteed compensation.

(2) Latvijas Banka shall carry out a stress test of the deposit guarantee fund at least once every three years.

(3) The information obtained for stress testing shall only be used for the analysis of those tests and shall be stored for as long as necessary for the needs of the stress test.

(4) Latvijas Banka shall, by 1 July of each year, draw up a report on the operation of the deposit guarantee fund and publish it on its website.

[24 March 2022; 23 September 2021; 19 September 2024]

Section 7. Obligation to Submit Information to the Consultative Council of the Financial and Capital Market

[23 September 2021]

Section 8. Payments into the Deposit Guarantee Fund

(1) The deposit guarantee fund shall consist of the payments made by the deposit takers in the amount and in accordance with the procedures laid down in this Law.

(2) A credit institution shall, within a month from obtaining a licence (permit) for the operation of a credit institution, make a one-time initial payment into the deposit guarantee fund in the amount of 1.5 per cent of the initial capital, a branch of a foreign credit institution shall, within a month after obtaining a licence (permit) for the activities of a credit institution, make a one-time initial payment into the deposit guarantee fund in the amount of EUR 150 000, but a credit union shall, within a month after obtaining a licence (permit) for the activities of a credit union, make a one-time initial payment into the deposit guarantee fund in the amount of EUR 150.

(3) A credit institution or a credit union registered in Latvia, a branch of a credit institution in Latvia registered in a foreign country shall, on a quarterly basis, make a payment into the deposit guarantee fund in the amount of 0.05 per cent of the average balance of the covered deposits in the deposit taker in the previous quarter, multiplied by the adjustment coefficient which has been calculated in accordance with the procedures stipulated by Latvijas Banka. When laying down the procedures for calculating the adjustment coefficient, Latvijas Banka shall take into account the indicators of the capital adequacy, liquidity, the business model for large exposures, and risk management of the deposit taker, the quality of credit portfolio of the deposit taker in the previous calendar year, and may also consider other indicators determined by employing risk-based methods.

(4) A branch of a credit institution of a Member State which is a member of the deposit guarantee fund shall, on a quarterly basis, make a payment into the deposit guarantee fund in the amount of 0.05 per cent of the average balance of the covered deposits attracted by the branch in the previous quarter.

(4¹) If a deposit taker does not have information on the persons the financial resources belonging to which are managed by the depositor with the deposit taker and information on the amount of the financial resources belonging to each of those persons, the payments in the deposit guarantee fund shall be calculated based on the balance in the account where the financial resources belonging to another person and managed by the depositor with the deposit taker are held.

(4²) In order to ensure the resilience of the deposit guarantee scheme, Latvijas Banka may, based on the potential negative impact of the economic cycle on the financial stability and the development of the financial sector, decide on increasing the quarterly payment in the deposit guarantee fund referred to in Paragraph three of this Section to 0.125 per cent per quarter of the average balance of the covered deposits with the deposit taker, multiplied by the adjustment coefficient which has been calculated in accordance with the procedures stipulated by Latvijas Banka, and on increasing the quarterly payment in the deposit guarantee fund referred to in Paragraph four of this Section to 0.125 per cent per quarter of the average balance of the covered deposits attracted by the branch in the previous quarter. Latvijas Banka shall notify the decisions referred to in this Paragraph at least three months in advance.

(5) When fixing the adjustment coefficient, the payment to be made into the deposit guarantee fund may not be reduced by more than 25 per cent or increased by more than 100 per cent.

(6) The deposit taker shall make payments in euros.

(7) [19 September 2024]

(8) When calculating the payments to be made into the deposit guarantee fund, the deposit taker shall take into account the amount of the covered deposits referred to in Section 3, Paragraph one of this Law which does not exceed EUR 100 000.

[11 January 2018; 23 September 2021; 19 September 2024 / Paragraph 4.² shall come into force on 1 January 2025. See Paragraph 20 of Transitional Provisions]

Section 9. Target Level of the Deposit Guarantee Fund and Payment Commitments

(1) Latvijas Banka shall ensure that the target level of the deposit guarantee fund is not less than 0.8 per cent of the amount of the covered deposits of members in the deposit guarantee fund.

(2) After the deposit guarantee fund has reached the target level and disbursements have been made from the deposit guarantee fund as a result of which the financial resources available in the deposit guarantee fund have fallen below 0.53 per cent of the total amount of the covered deposits of members in the deposit guarantee fund, Latvijas Banka shall fix regular payments to be made into the deposit guarantee fund in the amount which allows to reach the target level referred to in Paragraph one of this Section within six years at the latest.

(3) When fixing the regular payments to be made into the deposit guarantee fund in order to reach the target level specified in this Section, Latvijas Banka shall take into account the phase of the national economy cycle, and also the impact which procyclical payments into the deposit guarantee fund may have on the deposit taker.

(4) The financial resources available in the deposit guarantee fund may include payment commitments of the deposit taker in the amount of not more than 30 per cent of the total amount of the financial resources available in the deposit guarantee fund.

(5) Latvijas Banka shall issue regulatory provisions for the procedures for including payment commitments of the deposit takers into the deposit guarantee fund.

[23 September 2021 / See Paragraph 5 of Transitional Provisions]

Section 10. Extraordinary Payments into the Deposit Guarantee Fund

(1) If there are insufficient financial resources in the deposit guarantee fund to disburse the guaranteed compensation to depositors, Latvijas Banka shall request the deposit taker to make, within the time period stipulated by it, extraordinary payments into the deposit guarantee fund not exceeding 0.5 per cent of the covered deposits of the deposit taker at the end of the previous calendar year. If Latvijas Banka establishes exceptional circumstances, it is entitled to increase the amount of the extraordinary payments.

(2) If Latvijas Banka establishes that the making of extraordinary payments by the deposit taker into the deposit guarantee fund jeopardises or may jeopardise stable operation of the financial sector, jeopardises or may jeopardise solvency or liquidity of the deposit taker, Latvijas Banka shall decide to defer the extraordinary payments fully or partly until the moment when the making of such extraordinary payments no longer jeopardises solvency or liquidity of the deposit taker.

[23 September 2021]

Section 11. Preparation, Provision, and Processing of Information Necessary for the Management of the Deposit Guarantee Fund

Latvijas Banka shall determine the procedures and the time limit for:

1) calculating payments of the deposit taker into the deposit guarantee fund by specifying the manner in which the abovementioned payments are to be made;

2) drawing up and submitting a report to Latvijas Banka on the covered deposits;

3) collecting and providing information to Latvijas Banka on the guaranteed compensation.

[11 January 2018; 23 September 2021]

Section 12. Verification by a Sworn Auditor

(1) A credit institution or a branch thereof shall ensure that once a year a sworn auditor, concurrently with performing an audit of an annual statement, verifies whether a report of the deposit taker on the covered deposits and payments into the deposit guarantee fund has been prepared in accordance with laws and regulations. The sworn auditor shall perform the verification in accordance with the law On Sworn Auditors and submit to Latvijas Banka a written report on the verification referred to in this Section.

(2) The requirements referred to in Paragraph one of this Section shall also be applicable to a credit union if the assets thereof exceed EUR 400 000 at the end of the reporting year.

[23 September 2021]

Section 13. Calculation of the Average Balance of the Covered Deposits

The average balance of the covered deposits in the previous quarter shall be calculated as the arithmetic mean of balances of the covered deposits presented in reports on the covered deposits of three months in the relevant quarter.

Section 14. Time Limit for Payments into the Deposit Guarantee Fund and Legal Status of Payments

(1) A deposit taker shall, by the 20^th day of the first month of each quarter, make payments into the deposit guarantee fund in the amount specified in Section 8 of this Law by transferring financial resources to Latvijas Banka.

(2) Payments of the deposit taker into the deposit guarantee fund shall not be deemed as the commitments of Latvijas Banka towards the deposit taker and shall not be repaid.

(3) Payments of the deposit taker into the deposit guarantee fund may be included in the expenditures of the deposit taker.

[23 September 2021]

Section 15. Sanctions and Administrative Measures

(1) Latvijas Banka is entitled to impose the following sanctions:

1) a public announcement by indicating the deposit taker responsible for the violation and the nature of the violation;

2) a warning;

3) a fine;

4) exclusion of the deposit taker from membership in the deposit guarantee fund.

(2) Latvijas Banka is entitled to impose the sanctions specified in Paragraph one of this Section:

1) for the failure to comply with the requirement laid down in legal acts to submit to Latvijas Banka the information necessary for ensuring disbursement of the guaranteed compensation;

2) for the failure to comply with the provisions for drawing up a report on the covered deposits and correction coefficient applicable to payments in the deposit guarantee fund;

3) for the failure to comply with the requirement to make payments into the deposit guarantee fund in the specified amount and within the specified time limit;

4) for the failure to comply with the requirement to keep records on eligible deposits, depositors thereof, and the amount of covered deposits in accounting registers;

5) for the failure to comply with the time limit within which information on the records kept in the accounting registers on eligible deposits, depositors thereof, and the amount of covered deposits must be provided to Latvijas Banka;

6) for the failure to comply with the requirement to guarantee a loan to Latvijas Banka within the specified time limit.

(3) A public announcement may be imposed in addition to the sanctions referred to in Paragraph one, Clauses 2, 3, and 4 of this Section. Latvijas Banka shall post such public announcement on its website by indicating the legal person responsible for the violation and information on the violation committed thereby. The public announcement shall be available on the website of Latvijas Banka for a period of five years after the date of its posting.

(4) For the deposits made prior to exclusion of the deposit taker from membership in the deposit guarantee fund, the guaranteed compensation shall be calculated and disbursed in accordance with the procedures laid down in this Law.

(5) The fine for the payments which have not been made into the deposit guarantee fund within the specified time limit shall be 0.05 per cent of the payment not made within the specified time limit for each day of delay. The fine shall be calculated for a period for which the deposit taker has failed to make the calculated payment for each quarter. The deposit taker has the obligation to calculate and pay the fine for the payments which have not been made into the deposit guarantee fund within the specified time limit. The fine shall be paid to Latvijas Banka.

(6) If a branch of a credit institution in Latvia registered in a Member State or a branch of a credit institution in Latvia registered in a foreign country has missed the specified payment deadline in accordance with Section 11 of this Law by more than 30 days, Latvijas Banka shall immediately inform the supervisory authority of the relevant deposit taker of this fact.

(7) The fine for the failure of the deposit taker to comply with the requirement to draw up, process, and submit to Latvijas Banka information on ensuring disbursement of the guaranteed compensation shall be from EUR 1000 up to EUR 10 000.

(8) The fine for the failure to comply with the requirement to guarantee a loan to Latvijas Banka shall be 0.05 per cent of the loan which has not been issued within the specified time limit for each day of delay. The fine shall be calculated for the period during which the credit institution that is a member of the deposit guarantee fund has failed to issue a loan to Latvijas Banka.

(9) For the violations of the provisions laid down in this Law with regard to the collection and submission of the information necessary for the disbursement of the guaranteed compensation, Latvijas Banka is entitled to impose the administrative measure - to request the deposit taker or the person responsible for the violation to immediately cease the respective actions and refrain from repeating such actions.

(10) Latvijas Banka is entitled to impose the administrative measure referred to in Paragraph nine of this Section together with the sanctions referred to in Paragraph one of this Section.

(11) If the administrative act issued by Latvijas Banka on the imposition of the sanctions and administrative measure referred to in this Section, except for the imposition of a fine or a public announcement, is contested or appealed, it shall not suspend the operation of such act.

(12) Latvijas Banka is entitled to take the decision to impose a sanction or an administrative measure not later than within two years after the date of establishing the violation.

[24 March 2022; 19 September 2024]

Section 15.¹ Publishing of Sanctions and Administrative Measures

(1) Latvijas Banka shall post information on its website on the sanctions and administrative measures imposed on legal persons responsible for the violation after notification thereof to the addressee by indicating the legal person responsible for the violation and information on the violation committed thereby, and also information on contesting the administrative act issued by Latvijas Banka and the given ruling.

(2) Latvijas Banka shall post the information referred to in Paragraph one of this Section on the website without identifying the person, if it establishes that the disclosure of the data of such natural person on whom a sanction or administrative measure has been imposed is not commensurate or that disclosure of the data of the natural or legal person may pose a threat to the stability of the financial market or the initiated criminal proceedings, or cause incommensurate harm to the persons involved. The information posted on the website of Latvijas Banka shall be available for five years from the day of its posting.

[24 March 2022; 19 September 2024]

Section 16. Management of the Deposit Guarantee Fund

(1) [24 March 2022]

(2) The deposit guarantee fund shall be managed by Latvijas Banka. Financial resources of the deposit guarantee fund shall be invested so that the risk is low but investments are sufficiently diversified.

(3) According to a decision of Latvijas Banka, the management of the deposit guarantee fund may be transferred to another manager by entering into a relevant contract.

(4) Income (yield) coming from the management of the deposit guarantee fund shall be contributed into this fund.

(5) [24 March 2022]

[24 March 2022; 23 September 2021]

Section 17. Obligation to Provide Information on Eligible and Covered Deposits

(1) A deposit taker shall constantly provide information in its accounting registers on eligible deposits, depositors thereof, and the amount of covered deposits. Information shall be updated at least once a day so that accounting registers reflect the current amount of the guaranteed compensation.

(1¹) A deposit taker shall update in its accounting registers the information referred to in Paragraph one of this Section on the depositors referred to in Section 23, Paragraph three of this Law if it has received information that the respective depositor has been declared insolvent or his or her liquidation has been initiated.

(2) [11 November 2018]

(3) A deposit taker has the obligation to submit the information referred to in Paragraph one of this Section within one working day after receipt of a request from Latvijas Banka.

(4) A deposit taker shall conduct an internal audit review of the accounting of the eligible and covered deposits at least once every three years, using a risk-based approach.

[11 January 2018; 24 March 2022; 23 September 2021; 19 September 2024]

Section 18. Obligation to Submit Information to the European Banking Authority

(1) Latvijas Banka shall inform the European Banking Authority of the home Member State of the deposit guarantee fund the member of which is the relevant credit institution.

(2) Latvijas Banka shall, by 31 March of each year, inform the European Banking Authority of the total amount of covered bonds and the amount of the financial resources available in the deposit guarantee fund on 31 December of the previous year.

[23 September 2021]

Chapter III
Use of the Financial Resources of the Deposit Guarantee Fund

[24 March 2022]

Section 19. General Provisions for the Use of the Financial Resources of the Deposit Guarantee Fund and the Disbursement of the Guaranteed Compensation

(1) Financial resources of the deposit guarantee fund shall be used for:

1) the disbursements of the guaranteed compensation;

2) the repayment of the financial resources lent for the disbursement of the guaranteed compensation specified in this Law;

3) the payments for financing the application of resolution tools in accordance with the Law on Recovery of Activities and Resolution of Credit Institutions and Investment Firms;

4) the payment to the manager if the management of the deposit guarantee fund has been transferred to another manager in accordance with Section 16, Paragraph three of this Law;

5) the payment for the services of the independent valuer referred to in Section 25, Paragraph two of this Law.

(2) It is prohibited to use other financial resources of Latvijas Banka that are not financial resources of the deposit guarantee fund for the purposes referred to in Paragraph one of this Section.

(3) The guaranteed compensation shall be disbursed to a depositor who has the right to the guaranteed compensation in accordance with the provisions of this Law. Disbursements of the guaranteed compensation shall be determined according to the information in the accounting registers of the deposit taker on the day when the unavailability of deposits has set in. A depositor need not submit an application to the deposit taker or any other documents supporting the right of the depositor to the guaranteed compensation, except when the depositor manages financial resources belonging to another person with the deposit taker.

(3¹) A depositor who manages the financial resources belonging to another person with the deposit taker has, after the unavailability of deposits has set in for the deposit taker, the obligation to provide the deposit taker or Latvijas Banka with information required to identify those other persons and information on the amount of the financial resources belonging to each of those other persons on the day when the unavailability of deposits has set in. Latvijas Banka shall be entitled to request that the depositor submits a report of a sworn auditor on the verification of the information referred to in this Paragraph.

(4) A deposit taker shall prepare a list of depositors to whom the guaranteed compensation is to be disbursed. The list shall include depositors who have the right to the guaranteed compensation in accordance with the provisions of this Law and contain information as on the day when the unavailability of deposits has set in. The deposit taker shall submit the list to Latvijas Banka not later than on the day following that on which he unavailability of deposits has set in.

(5) Latvijas Banka or an authorised person thereof shall disburse the guaranteed compensation to depositors according to the list referred to in Paragraph four of this Section.

(6) If a sworn bailiff or tax administration has brought recovery proceedings against the money of a depositor, the amounts to be recovered shall be disbursed to the bailiff or tax administration respectively.

(7) If a sworn bailiff or tax administration has not brought recovery proceedings against the money of a depositor within five years from the day when he unavailability of deposits has set in, the restrictions imposed by the sworn bailiff or tax administration on the disbursement of the guaranteed compensation shall expire.

[24 March 2022; 23 September 2021; 19 September 2024]

Section 20. Overpayment of the Guaranteed Compensation

(1) If Latvijas Banka, the deposit taker, an authorised person thereof, an administrator or liquidator establishes that the guaranteed compensation has been disbursed to a person who, in accordance with the provisions of this Law, did not have the right to the guaranteed compensation or it has been disbursed in a greater amount, the person has the obligation to repay the guaranteed compensation disbursed unjustifiably upon request of Latvijas Banka, the deposit taker, the authorised person hereof, the administrator or the liquidator.

(2) If the person fails to repay the compensation referred to in Paragraph one of this Section voluntarily, Latvijas Banka, the deposit taker, the authorised representative thereof, the administrator or the liquidator has the obligation to bring an action for the repayment of the abovementioned financial resources to the deposit guarantee fund.

[23 September 2021]

Section 21. Loan to the Deposit Guarantee Fund

(1) If there are insufficient financial resources in the deposit guarantee fund to disburse the guaranteed compensation in accordance with this Law, Latvijas Banka may borrow the missing amount from the financial market of Latvia, European Union, or a foreign country, or from a deposit guarantee fund of another Member State.

(2) A participant of the financial market of Latvia, European Union, or a foreign country may only offer Latvijas Banka to borrow from it the missing amount necessary for the disbursements of the guaranteed compensation if the loan issued to Latvijas Banka does not affect the ability thereof to comply with the requirements governing the activities thereof which have been specified in the legal acts of Latvia or the respective country.

(3) When selecting a participant of the financial market of Latvia, European Union or a foreign country, or a deposit guarantee fund of another Member State that shall lend the missing amount necessary for the disbursements of the guaranteed compensation, the provisions of the Public Procurement Law shall not be applied. Latvijas Banka shall select the participant of the financial market of Latvia, European Union or a foreign country, or the deposit guarantee fund of another Member State which offers to Latvijas Banka the lowest lending interest rate. If the offers made are the identical, the contract shall be awarded by drawing lots.

(4) If Latvijas Banka does not, within two working days from the day when the unavailability of deposits has set in, receive offers to lend the missing amount necessary for the disbursements of the guaranteed compensation or establishes that the offers made do not ensure the most economically advantageous solution for the interests of depositors or deposit guarantee fund, or does not receive the loan due to other reasonable circumstances, the loan shall, upon request of Latvijas Banka, be ensured by credit institutions which are members of the deposit guarantee fund.

(5) Latvijas Banka shall not request the loan referred to in Paragraph four of this Section from such credit institutions the liquidity of which is jeopardised or might be jeopardised by issuing such loan.

(6) Latvijas Banka shall determine the amount of the loan referred to in Paragraph four of this Section, the procedures and time limit for the issuance thereof, and also the procedures and time limit for the repayment thereof in accordance with the following conditions:

1) the amount of the loan of the credit institution shall be determined proportionally to the amount of the payment made by the credit institution in accordance with Section 8, Paragraph three of this Law;

2) the payment for the actually used financial means of the loan of the deposit guarantee fund shall be determined in accordance with a positive short-term interest rate of the euro by adding thereto a fixed rate in the amount of one per cent of the amount of the actually used loan;

3) the maximum term of the loan shall be three years;

4) repayment of the financial resources used for the loan by the deposit guarantee fund shall be proportional to credit institutions.

(6¹) Contesting and appealing the administrative act issued by Latvijas Banka on the loan request referred to in Paragraph four of this Section shall not suspend the operation thereof.

(7) If the necessary amount of financial resources is not ensured in the deposit guarantee fund by the loan referred to in Paragraph four of this Section within three working days from the day when the unavailability of deposits has set in, Latvijas Banka shall immediately inform the Ministry of Finance of the fact that there are insufficient financial resources in the deposit guarantee fund. Funds from the State budget shall be allocated for the disbursement of the guaranteed compensation specified in this Law in accordance with the appropriation procedures or in the form of a loan in conformity with the procedures laid down in the Law on Budget and Financial Management. The Ministry of Finance shall ensure the availability of the funds from the State budget allocated for the disbursement of the guaranteed compensation specified in this Law so that the disbursements of the guaranteed compensation are made within the time limits specified in this Law.

(8) The financial resources borrowed by Latvijas Banka for the disbursements of the guaranteed compensation shall be repaid thereby from the deposit guarantee fund.

[24 March 2022; 19 September 2024]

Section 22. Right of Latvijas Banka to Claim against the Deposit Taker

(1) Upon disbursing the guaranteed compensation to depositors, Latvijas Banka shall acquire the right to claim against the deposit taker in the amount of the disbursed guaranteed compensation. The deposit taker shall cover the claims according to the calculation submitted by Latvijas Banka. The funds acquired through subrogation shall be paid into the deposit guarantee fund.

(2) In the event of the insolvency of the deposit taker, the calculation submitted by Latvijas Banka as a creditor's claim for the repayment of financial resources of the deposit guarantee fund in the amount of the disbursed guaranteed compensation shall be satisfied as a priority before claims of other creditors of the deposit taker.

[23 September 2021]

Section 23. Deposits for which the Guaranteed Compensation is not Disbursed

(1) The guaranteed compensation shall not be disbursed for:

1) deposits of credit institutions and credit unions;

2) deposits of financial institutions;

3) deposits of local governments the annual budget of which exceeds EUR 500 000 and of direct administration institutions;

4) deposits related to money laundering or recognised as proceeds from crime if a convicting court judgement has entered into effect;

5) deposits the depositor of which has not been identified as a customer in accordance with the provisions of the Law on the Prevention of Money Laundering and Terrorism and Proliferation Financing;

6) deposits which, in accordance with Articles 51 and 62 of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012, constitute own funds of the deposit taker, including the amortised part thereof in accordance with Article 64 of the abovementioned Regulation;

7) deposits of insurance and reinsurance companies;

8) deposits of investment firms;

9) deposits of investment management companies;

10) deposits of private pension funds;

11) deposits of alternative investment fund managers;

12) debt securities issued by a credit institution, and also liabilities arising from the promissory notes thereof, including bills of exchange;

13) deposits in which no transactions have been made over the last two years from the day when the unavailability of deposits has set in and the value of which is less than EUR 10.

(2) The deposits referred to in Paragraph one of this Section shall also include the accrued interest that, in conformity with the terms and conditions of the concluded contract, has not been disbursed by the day when the deposits have become unavailable.

(3) Exceptions to the disbursement of the guaranteed compensation shall not apply to a deposit made by a credit institution subject to liquidation or an insolvent credit institution, credit union, insurance and reinsurance company, investment firm, investment management company, private pension fund, the manager of an alternative investment fund, and a financial institution whose liquidation was initiated or insolvency has been declared prior the day when the deposits have become unavailable.

[24 March 2022; 19 September 2024]

Section 24. Guaranteed Compensation for Deposits in Foreign Currency

For the disbursement of the guaranteed compensation, deposits in foreign currency shall be converted in euros according to the foreign currency rate used in accounting on the day when the unavailability of deposits has set in.

Section 25. Manner and Procedures for Disbursing the Guaranteed Compensation

(1) Disbursement of the guaranteed compensation within the time limit referred to in Section 26 of this Law shall be ensured in one of the following manners:

1) the guaranteed compensation is disbursed from the deposit guarantee fund through one or more credit institutions or payment institutions selected by Latvijas Banka;

2) the guaranteed compensation is disbursed through a credit institution or payment institution to which the deposit taker has transferred the covered deposits based on the decision of Latvijas Banka together with the assets of the deposit taker which fully or partially cover the guaranteed compensation;

3) the guaranteed compensation is disbursed through Latvijas Banka;

4) the guaranteed compensation is disbursed from the financial resources of the deposit taker and the deposit guarantee fund through the deposit taker for whom the unavailability of deposits has set in.

(1¹) When ensuring the manner of the disbursement of the guaranteed compensation referred to in Paragraph one, Clauses 1 and 2 of this Section, the credit institution or payment institution to which the covered deposits have been transferred based on a decision of Latvijas Banka shall disburse the guaranteed compensation without carrying out a repeated customer due diligence of the depositors.

(1²) When ensuring the manner of the disbursement of the guaranteed compensation referred to in Paragraph one, Clause 3 of this Section, Latvijas Banka shall disburse the guaranteed compensation without carrying out a repeated customer due diligence of the depositors.

(2) If the covered deposits transferred for ensuring the disbursement of the guaranteed compensation by the deposit taker are not covered by the assets of the deposit taker transferred in the equivalent amount in accordance with Paragraph one, Clause 2 of this Section, Latvijas Banka may decide to allocate the missing financial resources for the disbursement of the guaranteed compensation to the acquirer of the covered deposits from the deposit guarantee fund. The value of the assets of the deposit taker to be transferred for the disbursement of the guaranteed compensation (if the financial resources are not held in correspondent bank accounts) shall be determined by an independent valuer involved by Latvijas Banka.

(3) If the guaranteed compensation is disbursed from the financial means of the deposit taker in accordance with Paragraph one, Clause 4 of this Section and the deposit taker has not yet completed the disbursement of the guaranteed compensation but transfers the financial resources intended for it to the deposit guarantee fund, these financial resources shall be included in the revenues of the deposit guarantee fund.

(4) When selecting a credit institution or payment institution through which the guaranteed compensation is to be disbursed, Latvijas Banka shall not apply the provisions of the Public Procurement Law. In order to ensure the interests of depositors, Latvijas Banka shall select a credit institution or payment institution which provides the most favourable conditions for the receipt of the guaranteed compensation for the depositors.

(5) When ensuring the disbursement of the guaranteed compensation through one or more credit institutions or payment institutions selected by Latvijas Banka, Latvijas Banka shall enter into a contract with the credit institution or payment institution. The contract may provide a payment for the customers attracted to this credit institution or payment institution as a result of ensuring the disbursement of the guaranteed compensation, and this payment shall be credited into the deposit guarantee fund. The amount of such payment shall be determined depending on the number of the depositors who, upon receipt of the guaranteed compensation, have expressed their wish to become and have also become customers of the particular credit institution or payment institution, or it shall be determined on the basis of other financial factors.

(6) Latvijas Banka shall decide on the manner and procedures for disbursing the guaranteed compensation, including on the issue whether the deposit taker for whom the unavailability of deposits has set in may partly or fully disburse the guaranteed compensation or transfer financial resources to the deposit guarantee fund for partial or full disbursement of the guaranteed compensation if Latvijas Banka has established that the deposit taker has sufficient financial resources, and also on the time and place of the disbursement of the guaranteed compensation, and shall publish this information in the official gazette Latvijas Vēstnesis, and also post it on the website created by Latvijas Banka.

(6¹) Credit institutions registered in Latvia and Latvian branches of credit institutions registered in Member States shall provide their customers with the possibility to apply for the disbursement of the guaranteed compensation and receive the guaranteed compensation. Latvijas Banka shall specify the information which the institutions referred to in this Paragraph collect and submit to Latvijas Banka on the customer applications for the disbursement of the guaranteed compensation, the procedures and deadlines for collecting and submitting that information, and also the requirements for providing information on the refusal to execute a customer application for the disbursement of the guaranteed compensation.

(6²) A payment institution or electronic money institution licensed in Latvia or a branch of a payment institution or electronic money institution licensed in a Member State that operates in Latvia shall be entitled to provide its customers with the possibility to apply for the disbursement of the guaranteed compensation and receive the guaranteed compensation if it can ensure the crediting of the guaranteed compensation to the customer's account through a credit transfer in conformity with Regulation (EU) No 260/2012 of the European Parliament and of the Council of 14 March 2012 establishing technical and business requirements for credit transfers and direct debits in euro and amending Regulation (EC) No 924/2009, and compliance with the regulations of Latvijas Banka issued in accordance with Paragraph 6.¹ of this Section.

(7) If the administrative act issued by Latvijas Banka on the manner and procedures for disbursing the guaranteed compensation is contested or appealed, it shall not suspend the operation of such act.

[24 March 2022; 23 September 2021; 19 September 2024]

Section 26. Commencement of the Disbursement of the Guaranteed Compensation and Partial Disbursement of the Guaranteed Compensation

(1) The guaranteed compensation shall be available not later than within seven working days after the day when the unavailability of deposits has set in.

(2) [1 January 2024 / See Paragraph 18 of Transitional Provisions]

[11 January 2018; 24 March 2022; 23 September 2021]

Section 27. Cases where the Right to Defer the Disbursement of the Guaranteed Compensation Exist

(1) The disbursement of the guaranteed compensation or partial disbursement thereof to a depositor may be deferred in the following cases:

1) there is a legal dispute regarding the rights of the person to the deposit or the rights to the guaranteed compensation, and also regarding the compliance with the requirements laid down in the Law on the Prevention of Money Laundering and Terrorism and Proliferation Financing;

2) restrictions have been imposed on the disbursement of deposits in accordance with laws and regulations;

3) criminal proceedings have been initiated against the person regarding money laundering and a convicting court judgement has not entered into effect.

(2) When deferring the disbursement or partial disbursement of the guaranteed compensation, Latvijas Banka shall order the deposit taker to make the relevant changes in the list of recipients of the guaranteed compensation.

(3) As the circumstances on the grounds of which the disbursement of the guaranteed compensation was deferred cease to exist, Latvijas Banka shall order the deposit taker to make the relevant changes in the list of recipients of the guaranteed compensation.

[24 March 2022; 23 September 2021]

Section 28. Obligation to Inform a Depositor

(1) Prior to commencing a business relationship with a depositor, a deposit taker has the obligation to provide the following information thereto:

1) information on the amount of the guaranteed compensation;

2) information on the procedures and the time limit for the disbursement of the guaranteed compensation;

3) information on the possibility to set off liabilities resulting from claims;

4) contact details of the deposit guarantee fund.

(2) Latvijas Banka shall approve a standard form for the provision of the information referred to in Paragraph one of this Section and for the provision of general information on deposits for which the guaranteed compensation is not disbursed in accordance with Section 23 of this Law. A deposit taker shall obtain a confirmation from a depositor that the relevant information has been received.

(2¹) The deposit taker shall, with reference to the information included in the form referred to in Paragraph two of this Section, provide the depositor with confirmation of their right to the guaranteed compensation in order to inform whether the deposit is or is not an eligible deposit. Such confirmation shall be provided through the online banking or other means of communication of the depositor that is appropriate for conveying the specific information, but if the depositor does not have access to online banking, the deposit taker shall provide such confirmation in writing upon request of the depositor.

(3) A deposit taker shall make the form referred to in Paragraph two of this Section available to a depositor through distance financial services (online banking) or issuing it to the depositor in paper form once a year upon request of the depositor.

[24 March 2022; 23 September 2021; 19 September 2024 / The new wording of the first sentence of Paragraph 2.¹ shall come into force on 1 July 2025. See Paragraph 21 of Transitional Provisions]

Section 29. Additional Obligation to Inform a Depositor

Where a deposit taker is reorganised or liquidated, or excluded from membership in a deposit guarantee fund, the deposit taker shall, in addition to the obligation to inform a depositor specified in Section 28 of this Law, make information on the reorganisation, liquidation of the deposit taker, or the exclusion thereof from membership in the deposit guarantee fund available to the depositor under the contract for the provision of distance financial service entered into between the deposit taker and the depositor.

Section 30. Rights of a Depositor in the Event of the Reorganisation of a Credit Institution

Where a credit institution is reorganised, the depositors of the credit institution whose deposits are transferred to another credit institution have the right to, within three months from the moment when the reorganisation takes effect, transfer their deposits and interest payments on them to another credit institution selected by the depositor or to withdraw their deposits and interest payments on them without a commission.

[24 March 2022]

Section 31. Examination of Applications and Correspondence with a Depositor

(1) Applications related to the recognition of a person as a depositor to which the guaranteed compensation is to be disbursed, and also the amount of the guaranteed compensation and the time periods for the disbursement thereof, or applications related to the right of the person to the guaranteed compensation shall be examined by Latvijas Banka. It shall include in its decision findings of facts, a list of the legal provisions applied, and information on the right of the submitter of the application to the guaranteed compensation.

(1¹) If Latvijas Banka establishes, when examining the applications referred to in Paragraph one of this Section, that a reply on substance needs to be prepared for the submitter and additional actions must be taken for the obtaining and processing of information in order to provide the reply, Latvijas Banka shall take those actions within four months from the day of receiving the application, informing the submitter within one month from the day of receiving the application of the receipt of the application and the actions taken.

(2) Correspondence with a depositor of another Member State who has made a deposit with a credit institution by using the freedom to provide services shall be conducted in the language recognised internationally in the financial field.

[23 September 2021; 19 September 2024]

Section 32. Appeal of Administrative Acts Issued by Latvijas Banka

An administrative act of Latvijas Banka which has been issued in accordance with this Law may be appealed to the Regional Administrative Court. The court shall examine the case as the court of first instance. The case shall be examined in the composition of three judges. A judgement of the Regional Administrative Court may be appealed by filing a cassation complaint.

[23 September 2021]

Chapter IV
Mutual Cooperation between Deposit Guarantee Funds

Section 33. Disbursement of the Guaranteed Compensation within the Scope of the Member States

(1) The financial resources necessary for the disbursement of the guaranteed compensation for deposits of a branch of a credit institution in another Member State registered in Latvia shall be provided by Latvijas Banka to the managing authority of a deposit guarantee fund of the relevant Member State from the deposit guarantee fund, and Latvijas Banka shall cover the administrative costs related to the disbursement of the guaranteed compensation, and also give instructions as to the procedures for disbursing the guaranteed compensation.

(2) The disbursement of the guaranteed compensation for a deposit of a branch of a credit institution in Latvia registered in a Member State shall be commenced after Latvijas Banka has received the necessary financial resources from the managing authority of a deposit guarantee fund of the relevant Member State and the instructions as to the procedures for disbursing the guaranteed compensation. The managing authority of the deposit guarantee fund of another Member State shall cover the administrative costs incurred by Latvijas Banka in relation to the disbursement of the guaranteed compensation.

(3) Prior to commencing the disbursement of the guaranteed compensation to depositors of a branch of a credit institution registered in a Member State, Latvijas Banka shall publish information in the official gazette Latvijas Vēstnesis and on the website created by Latvijas Banka on the time and place of the disbursement of the guaranteed compensation.

(4) If Latvijas Banka has complied with all the instructions given by the managing authority of the deposit guarantee fund of the relevant Member State, it shall be deemed that Latvijas Banka has acted in good faith and is not liable for any losses that might arise from ensuring disbursement of the guaranteed compensation to depositors of a branch of a credit institution in Latvia registered in the Member State.

[23 September 2021; 19 September 2024]

Section 34. Entry into a Cooperation Contract

(1) Latvijas Banka shall enter into cooperation contracts with the managing authorities of deposit guarantee funds of other Member States to ensure efficient operation of deposit guarantee funds. At least the following conditions shall be included in the cooperation contract:

1) the procedures by which mutual exchange of information of deposit guarantee funds shall take place;

2) the procedures by which the managing authority of the deposit guarantee fund of the relevant Member State shall represent Latvijas Banka and ensure exchange of information with the depositors of the deposit taker;

3) the procedures for disbursing the guaranteed compensation.

(2) Latvijas Banka shall inform the European Banking Authority of entering into the cooperation contract referred to in Paragraph one of this Section.

(3) If Latvijas Banka fails to agree with the managing authority of the deposit guarantee fund of another Member State on the terms and provisions of the cooperation contract or a dispute arises between the parties over the application of the cooperation contract, the contracting parties may refer the dispute to the European Banking Authority for examination in accordance with Article 19 of Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/78/EC.

(4) Failure to enter into a cooperation contract shall not affect the right of depositors to the disbursement of the guaranteed compensation.

[24 March 2022; 23 September 2021]

Section 34.¹ Protection of Deposits of a Foreign Deposit Taker

(1) Latvijas Banka shall ascertain that the activities of a branch of a credit institution registered in a foreign country which has its head office outside the European Union and which is not a member of a deposit guarantee fund of a European Union Member State conform to the requirements laid down in this Law for ensuring deposit guarantees. If the customers of the credit institution concerned are not provided with an equivalent deposit guarantee scheme in accordance with the criteria laid down in this Law, Latvijas Banka may impose an obligation on the branch of a credit institution registered in a foreign country to become a member of the deposit guarantee fund.

(2) The branch of a credit institution registered in a foreign country which is referred to in Paragraph one of this Section shall provide all the relevant information on the deposit guarantee scheme in respect of deposits of existing and potential depositors in the abovementioned branch in Latvian or in a language agreed between the depositor and the deposit taker when opening the relevant account, and the abovementioned information shall be clear and comprehensible.

[24 March 2022; 23 September 2021]

Section 35. Joining a Deposit Guarantee Fund of Another Member State

(1) If a credit institution or a branch thereof wishes to join a deposit guarantee fund of another Member State, it shall inform Latvijas Banka of its intention at least six months in advance. Until the day when the credit institution or a branch thereof has ceased its activities in the territory of Latvia and joined a deposit guarantee fund of another Member State, it shall continue making payments into the deposit guarantee fund.

(2) If a credit institution registered in Latvia is no longer a member of the deposit guarantee fund and joins a deposit guarantee fund of another Member State, Latvijas Banka has the obligation to transfer to the deposit guarantee fund of the relevant Member State all payments which the credit institution has made into the deposit guarantee fund within twelve months prior to joining the deposit guarantee fund of another Member State, except for the extraordinary payments made into the deposit guarantee fund by the credit institution in accordance with the procedures laid down in this Law and the paid fines.

(3) If a branch of a credit institution registered in Latvia performs activities in another Member State and joins a deposit guarantee fund of the relevant Member State, Latvijas Banka has the obligation to transfer to the deposit guarantee fund of the relevant Member State all payments which the credit institution has made into the deposit guarantee fund in proportion to the amount of the covered deposits transferred within twelve months prior to joining the deposit guarantee fund of another Member State, except for the extraordinary payments made into the deposit guarantee fund by the credit institution in accordance with the procedures laid down in this Law and the paid fines.

[24 March 2022; 23 September 2021 / Amendment to Paragraphs two and three shall come into force on 1 January 2023. See Paragraph 19 of Transitional Provisions]

Transitional Provisions

1. The Deposit Guarantee Law (Latvijas Republikas Saeimas un Ministru Kabineta Ziņotājs, 1998, No. 13; 2000, No. 13; 2001, No. 22; 2007, No. 9; 2008, No. 22; 2009, Nos. 6, 14; Latvijas Vēstnesis, 2010, No. 205; 2013, No. 192; 2014, No. 105) is repealed with the coming into force of this Law.

2. Such legal provisions governing deposit guarantee according to which the unavailability of deposits was established for a deposit taker shall be applied to the legal relationship established in relation to the disbursement of the guaranteed compensation until the day of coming into force of this Law.

3. The Commission shall, by 3 July 2015, inform the European Banking Authority of the institution which is responsible for the deposit guarantee fund.

4. The stress test referred to in Section 6, Paragraph two of this Law shall be carried out by the Commission for the first time by 3 July 2017.

5. Latvijas Banka shall reach the target level of the deposit guarantee fund referred to in Section 9, Paragraph one of this Law by 3 July 2024.

[23 September 2021]

6. Section 22, Paragraph two of this Law in respect of credit unions shall come into force concurrently with the relevant amendments to the Insolvency Law.

7. Section 9, Paragraph four of this Law shall come into force on 3 July 2015.

8. Section 28 of this Law shall come into force on 1 October 2015. Depositors with whom business relationships have been commenced prior to the coming into force of Section 28 of this Law and who have not been provided with the information referred to in this Section shall be provided with the relevant information by the deposit taker by 30 December 2015, posting this information on its website, or issued in paper form upon request of a depositor.

9. The Commission shall, by 3 July 2015, inform the European Banking Authority of risk-based methods approved by the Commission in order to determine and calculate risk-based payments of members of the deposit guarantee fund.

10. The time limit for the disbursement of the guaranteed compensation referred to in Section 26, Paragraph one of this Law shall be applied starting from 1 January 2024.

11. In accordance with Section 14 of this Law, the deposit taker shall make the payment referred to in Section 8, Paragraph three of this Law into the deposit guarantee fund of this Law for the first time by 20 October 2015.

12. If, after the day this Law comes into force, the unavailability of deposits has set in for the deposit taker before 31 December 2018, the disbursement of the guaranteed compensation shall commence within 20 working days.

13. If, after the day this Law comes into force, the unavailability of deposits has set in for the deposit taker between 1 January 2019 and 31 December 2020, the disbursement of the guaranteed compensation shall commence within 15 working days.

14. If, after the day this Law comes into force, the unavailability of deposits has set in for the deposit taker between 1 January 2021 and 31 December 2023, the disbursement of the guaranteed compensation shall commence within 10 working days.

15. The depositors who had the right to receive the guaranteed compensation on 14 June 2014 in relation to the setting in of the unavailability of deposits for the deposit taker but who have not received it because they were minors shall lose the right to claim against a deposit guarantee fund for the disbursement of the guaranteed compensation on 31 December 2029.

[27 May 2021]

16. Section 3, Paragraph five of this Law shall come into force concurrently with the Covered Bonds Law.

[27 May 2021]

17. The regulatory provisions issued by the Financial and Capital Market Commission on the basis of this Law until the day of coming into force of the Law on Latvijas Banka shall be applied until the day of coming into force of the relevant regulations of Latvijas Banka, but not longer than until 31 December 2024.

[23 September 2021]

18. Section 26, Paragraph two of this Law shall be repealed from 1 January 2024.

[24 March 2022]

19. The new wording of Section 15 of this Law, the new wording of Sections 15.¹ and 21 of this Law, and also amendments to Section 35, Paragraphs two and three of this Law shall come into force on 1 January 2023.

[24 March 2022]

20. Section 8, Paragraph 4.² of this Law shall come into force on 1 January 2025.

[19 September 2024]

21. Amendment to Section 28, Paragraph 2.¹ of this Law regarding the new wording of the first sentence shall come into force on 1 July 2025.

[19 September 2024]

Informative Reference to Directives of the European Union

[24 March 2022]

This Law contains norms arising from:

1) Directive 2014/49/EU of the European Parliament and of the Council of 16 April 2014 on deposit guarantee schemes (recast);

2) Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council.

The Law shall come into force on 1 July 2015.

The Law has been adopted by the Saeima on 4 June 2015.

President A. Bērziņš

Rīga, 18 June 2015

¹ The Parliament of the Republic of Latvia

Translation © 2025 Valsts valodas centrs (State Language Centre)