Starting from 1 January, Latvia increased the government-guaranteed compensation for depositors twofold – in line with the EU directive. In case of a bank’s insolvency, the Government guarantees to pay out EUR 100 000 instead of EUR 50 000 to a customer of any Latvian bank, or, if his deposit is less than this limit, the customer receives the full deposit amount. According to Rietumu, these legislative changes will attract new foreign customers to Latvian banks.
The Parliament of Latvia has passed these amendments to the Deposit Guarantee Law, which applies to all customers of Latvian banks – private and corporate entities, residents and non-residents of Latvia. The Latvian Deposit Guarantee Scheme reimburses EUR 100 000 to depositors of any Latvian bank.
The EU directives set the government-guaranteed compensation levels for
deposits in the union’s member countries. Latvia increased the deposit compensation amount from EUR 15 000 in 2006 to EUR 50 000 in 2008, and to the current EUR 100 000.
“Irrespective of the current budget deficit, our Government decided to increase the deposit guarantee amount twofold. This indicates stability of the Latvian banking system, which is now ready for new growth phase. Since interest rates in the local banks are very attractive within the EU and the Government guarantees increased, we forecast the new inflow of deposits – both from the Old Europe, e.g. Switzerland, France, Germany, where the rates do not exceed 2.5% and customers value every percentage point, and East”, said Mr. Alexander Pankov, president of Rietumu Bank – the county’s top-earning bank for the second year in a row.
Eleonora Gailisha Mass Media and Public Relations
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