Banks, Financial Services, Latvia, Legislation

Swedbank was imposed a fine of LVL 2.83 million, Citadele banka – LVL 1.22 million, SEB banka – LVL 558,744, Latvijas Krajbanka – LVL 259,006, DnB NORD Banka – LVL 167,466, Nordea Bank Finland Plc's branch in Latvia – LVL 158,401, Rietumu Banka – LVL 103,927, GE Money Bank – LVL 79,408, Latvijas Hipoteku un zemes banka (Latvian Mortgage and Land Bank) – LVL 55,594, Norvik banka – LVL 25,227.5, Aizkraukles banka – LVL 15,491, PrivatBank – LVL 5,486, UniCredit Bank – LVL 5,435, Danske Bank's branch in Latvia – LVL 2,688, Baltic International Bank – LVL 2,680, Trasta komercbanka – LVL 2,596, SMP Bank – LVL 2,022, Akciju komercbanka "Baltikums" – LVL 1,364, Regionala investiciju banka – LVL 1,274.5, Latvijas Biznesa banka – LVL 728, LTB Bank – LVL 500 and VEF banka – LVL 500.

The illegal agreement was in force from December 1, 2002, until January 7, 2011. Not all banks, however, were parties to the cartel during this entire period, informs LETA.

The Competition Council has determined that the amount of interbank transactions and the commission on bankcard services paid by stores were not economically justified. The commission should have decreased as the amount of bankcard payments and banks' income from these payments increased, but this never happened. Due to the cartel agreement, banks' commission on cash withdrawals or account checks via a different bank's ATMs was also higher than it should have been.

Latvian Commercial Banks' Association believes that the Competition Council's accusation of a cartel agreement among Latvia's banks, which introduced interbank payments for the maintenance of the bankcard system, is absurd and unjustified.

In the association's opinion, the Competition Council wishes to punish the banks for the establishment and development of the bankcard system in Latvia.

Furthermore, the Competition Council has not been able to define clearly which party has inflicted losses, because the commission payment mentioned Competition Council's decision does not infringe on consumer or retail companies' interests.

The association believes that the Competition Council's accusation is based on unfounded suppositions, and the Competition Council has overlooked the actual contribution of the interbank payments system to the Latvian economy – the possibility for consumers of one bank to pay for goods and services in a retail outlet, where bankcard operations are provided by another bank, without an extra commission.

The current system of settlements is transparent and provides all banks with equal competition opportunities, it also allows consumers to use their bankcards in any store, emphasizes the Association of Commercial Banks.

The interbank settlements have no effect on cardholders, the association informs.

The association's president Teodors Tverijons believes that accusing the banks' united interbank commission fee on servicing bankcards of being damaging to the Latvian economy is absurd, because it helped create convenient bankcard system in the entire country that was in consumers' interest. Furthermore, there was no cartel agreement, as all information on the system of interbank system of bankcard services is public.

Furthermore, such a system exists everywhere in the world, and the use of bankcards without such a system would have been more complicated and expensive, said Tverijons.

Members of the Association of Commercial Banks are now analyzing the Competition Council's announcement and will seek justice, said Tverijons.