OREANDA-NEWS. September 13, 2010. Taking into account the monetary policy decisions taken at the previous meeting of the Bank of Latvia Council, the further stabilization of the economic situation, the recent reduction in money market interest rates, and the high liquidity or free financial resources available to banks resulting from the uncertainty regarding the state budget 2011, Bank of Latvia Council today decided to leave unchanged the interest rates set by the Bank of Latvia and the mandatory reserve requirement in place for banks, reported the press-centre of Bank of Latvia.

The Report of the Governor of the Bank of Latvia, Ilmars Rimsevics, at today’s press conference will be available in the news section of the Bank of Latvia’s home page www.bank.lv .

The Bank approved a new edition of the "System Rules for Participation in EKS". The new edition will take effect on 09.11.2010 and on this day the Bank of Latvia electronic clearing system (EKS) will become compatible with SEPA, the Single Euro Payments Area, which implies several potential benefits for bank customers in making transfers to the Singe Euro Payments Area.

The transformation of EKS into SEPA compatible one will provide the Latvian banks, State Treasury, and Bank of Latvia with fast, effective, and secure customer payments in euro not only domestically but within the entire SEPA. SEPA enables customers to make cashless euro payments to anyone located anywhere in Europe, using a single payment account and under the same conditions. SEPA includes the European Union member states, Norway, Liechtenstein, Iceland, Switzerland, and Monaco.

EKS is the Bank of Latvia payment system whereby the banks make payments on behalf of their customers: it is the infrastructure or route for making payments between banks. Already since 1 January 2008 Latvian commercial banks can make quick and effective settlements for customer domestic payments in euro using the Bank of Latvia EKS. Now the banks will be able to use this system for payments in SEPA.

Thus, if the banks use the Bank of Latvia EKS for their cross-border payments, they will be able to execute their customers' payments promptly, so that money is transferred to the payee's account no later than by the end of the next business day, as a result of a third clearing cycle for processing of euro payments being introduced to EKS.

Regulation No. 924/2009 "On Cross-Border Payments in the Community" of the European Parliament and the European Council  requires that the commission for electronic cross-border payments in euro in the European Economic Area should be the same as for domestic payments in euro with the proviso that the beneficiary's account number IBAN and bank's BIC code are indicated. Thus, if the banks use the Bank of Latvia EKS, commission charges should diminish, for the tariffs applied by the Bank of Latvia to commercial banks for a payment depending on the number of payments submitted in one day will be 0.3 to 2.7 santims (0.003 to 0.027 lats). The Bank of Latvia tariffs for express payments, transferred via Bank of Latvia real time gross settlement systems SAMS and TARGET2-Latvija, remain unchanged - 20 to 80 santims (0.2 to 0.8 lats) for lats payments and 12.5 to 80 euro cents for euro payments per one payment depending on the number of submitted payments.

The Bank of Latvia will provide additional information to the public on the changes introduced in the payment system as the SEPA compliant EKS starts functioning on 9 November of this year. It should be noted that all businesses, state and local government institutions and 84% of the population have settlement accounts with commercial banks (or the State Treasury).