Deposit Guarantees Law
Deposit Guarantees Law
According to the Deposit Guarantees Law of the Republic of Latvia every deposit with a Latvian commercial bank, including term deposits with Swedbank, in a savings account or a current account is guaranteed to receive a reimbursement equivalent to the amount of the deposit of up to EUR 100 000 per one depositor.
Basic information about the state-guaranteed deposit reimbursement.
A depositor becomes entitled to the guaranteed reimbursement if the credit institution with which their funds are held is found to face unavailability of deposits, i.e. the inability of the attractor of deposits to pay out deposits, if at least one of the following circumstances, or a combination thereof, has occurred:
- the court has declared the attractor of deposits to be insolvent;
- the Finance and Capital Market Commission (“FCMC”) has revoked the permission (licence) to operate as a credit institution/credit union;
- The FCMC has established that the attractor of deposits is unable to pay out the deposit to the depositor and has decided to declare occurrence of deposit unavailability.
Every individual is entitled to the guaranteed reimbursement for funds placed with a commercial bank (current account balance, term deposit, savings account, Majority savings account, Dynamic deposit) to the amount of the deposit.
The amount of the maximum guaranteed reimbursement is EUR 100,000 per one depositor.
The depositor is entitled to a guaranteed reimbursement of EUR 200,000 is the funds have been placed with the bank within the last three months and the deposit consists in:
- amount of money from transactions with residential real estate owned by a person;
- social benefits, compensations;
- compensation for a damage of criminal nature or for wrongful conviction of a person.
The guaranteed reimbursement will not be paid to an individual for:
- deposits that are related to money laundering or that constitute proceeds derived from criminal activity, provided a verdict of guilty has entered into force;
- deposits placed by a person who has not been identified as a customer in compliance with the requirements of the Law on Prevention of Laundering of Proceeds Derived from Criminal Activities and Terrorist Financing;
- private pension fund deposits;
- deposits below EUR 10 if there have been no transactions with such a deposit during the last two years.
In the event of deposit unavailability, the guaranteed reimbursement will be paid out to the depositor starting with the 21st business day as from the day of occurrence of deposit unavailability.In the event of deposit unavailability, the guaranteed reimbursement will be paid out to the depositor starting with the 21st business day as from the day of occurrence of deposit unavailability.
The guaranteed reimbursement is only payable in euro currency, balance in foreign currencies will be translated to euros.
For further information see the Deposit Guarantees Law.