Cabinet of Ministers Regulations No. 212 in Riga on 18 July 1995 (No. 38, 5. §) commercial banking rules issued in article 81 of the Constitution in accordance with the procedure laid down in chapter I. General matters article 1. These rules determine the legal status of commercial banks, as well as regulate their operation and monitoring.
 
2. article. In matters not regulated by these rules, commercial banks must follow those laws binding.
 
3. article. The terms used in the rules of commercial banks — a company founded to publicly accept deposits and perform other banking operations.
 
Chapter or branch of commercial banks — Bank unit that carried out banking operations on behalf of commercial banks and are hosted outside of commercial banks registered office, but which is not a legal person.
 
Mission: the Department of commercial banks located in another country and represents the interests of commercial banks, but does not perform banking operations.
 
Banking operations: 1) natural and legal persons deposits and other repayable funds solicitation;
2) lending;
3) clear and non-cash payments for other physical and legal persons;
4) non-cash means of payment and release of service;
5 on the same bank) marketing or client funds: a) money market instruments;
(b)) with currency;
(c)) with currency contracts;
(d)) with the quoted securities;
6) trust operations, leasing, factoring;
7) storage and management of securities;
8 guarantee and service guarantee);
9) other transactions that in essence similar to the above, and consistent with the Bank of Latvia.
 
Credit-money loan or other service provided by a commercial bank and which enables natural and legal persons in the use of funds or to deal with material values, and binding to give away received the money or material goods, with or without interest.
 
Deposit: cash deposit commercial banks account for a specified or unspecified period of time, with or without interest.
 
Equity-capital commercial bank comprising share capital, share premium, reserves, retained earnings (provided that the auditor's conclusion about its existence) and reduced by commercial banks owned the existing own shares, intangible assets, bank balance sheet for the previous year and current year losses and participation in other commercial banks under the Bank of Latvia.
 
Client: the natural or legal person with commercial banking associate bank operations.
 
Parent company: a company that other company owns more than 50 percent of the voting shares in the capital or which it can directly or indirectly be controlled.
 
A subsidiary of a company in which the other company — the parent company, owns more than 50 percent of the voting shares or whose parent company is able, directly or indirectly, to control.
 
Trust: a relationship between two parties of the transaction, based on mutual trust and which result in one party assume responsibility for the administration of the property of the other party.
 
Significant interest, directly or indirectly for the participation of 10 and more percent of share capital or voting rights of commercial banks.
 
Auditor — the meaning of these provisions is a licensed Chartered auditor or other person to whom the Bank has granted the right to carry out annual reports of commercial banks.
 
4. article. The terms "bank", "commercial bank" or a legend, which includes these words may be used as official registered name, or as a complement to the officially registered name only the commercial banks, which have been issued by the Bank of Latvia.
 
5. article. The size of the interest rate and interest payment order is determined by the contract, the commercial bank with the borrower or lender agreement.
 
6. article. If not otherwise agreed in the contract: 1) for the calculation of the period of credit issued is assumed or deposit calendar days. This calculation is based on: the year in which it is 365 days; If the interest rate calculation is based on 29 February, the year in which is – 366 days;
2) interest shall be payable each year on December 31, as well as completely pays off the loan or deposit.
 
7. article. To produce commercial banks only documents signed by Bank officials who approved in accordance with the law and the Statute is entitled to carry out the relevant transactions and to represent the legal person status of commercial banks. Documents not signed under the laws and statutes have no legal force.
The Bank of Latvia approved commercial bank officials and inform the business register.
 
8. article. Commercial Bank responsible for its obligations with all its assets.
 
9. article. In addition to the banking operations of commercial banks may carry out other transactions which are directly connected with the activities of the company as maintenance.
 
Chapter II. Commercial and licensing article 10. Founders and shareholders of commercial banks that want to get the qualifying holding, may be: 1) natural persons and legal capacity of minors;
2) legal persons registered in the Republic of Latvia or any other State and whose running time is not less than three financial years;
3) one foreign bank whose running time is not less than three financial years, or the public.
The persons referred to in this article must be of good reputation and stable financial position.
 
11. article. Founder and shareholder of the commercial banks may not be a company (the company) registered so that there is no available news about its founders and shareholders or details of the company (the company) the legality of origin of the capital.
 
12. article. The minimum share capital for the formation of the commercial banks is 2 (two) million lats. The minimum registered capital of commercial banks has 3 (three) million lats, which must be achieved within five years of registration in the register of companies.
 
13. article. Natural or legal person who directly or indirectly a qualifying holding is sought and that so far there was no participation of such, must be received prior to acceptance of the Bank of Latvia.
If a person owns a significant interest in the commercial, it increased, reaching or exceeding 20, 33, 50% or more of the voting capital of commercial banks, it must receive the approval of the Bank of Latvia.
The Bank of Latvia has the right to request additional information on the persons referred to in this article is to discuss the financial position and reputation.
 
14. article. If the person does not comply with the requirements of this regulation, the Bank of Latvia during the month following the notification of major holdings receive has the right to refuse the planned investment.
 
15. article. Commercial banks must immediately inform the Bank of Latvia on the core and distribution of voting rights, which involves significant involvement. At least once a year should be submitted by the Latvian Commercial Bank in the list of all persons, that have qualifying holdings, indicating the amounts of those holdings.
 
16. article. Commercial banks, as well as their representation in the Department and its activities can be launched only in Latvia by the Latvian Banking licence and registration laws.
 
Article 17. Commercial banks of the Republic of Latvia is the Latvian Bank to receive permission to open representative offices or in other countries.
 
18. article. The Bank of Latvia determines the license (authorization) procedure, as well as with the activities of commercial constraints.
 
19. article. The Bank of Latvia on the licence application must be considered within three months after receipt of all the documents. The Bank of Latvia has the right to refuse authorisation of foreign banks or encountered a bank Department, if they have not been observed in establishing the laws and instructions of the Bank of Latvia and the foreign banks or bank branches planned activity does not comply with Latvia's national interests.
 
20. article. Commercial Bank Chairman of the Board and Deputy Chairman of the Management Board must be persons: 1) which permanently residing in Latvia;
2) competent in financial case management matters;
3) which have the necessary education and professional experience in banking;
4) which have not been convicted, accused or defendants, suspected criminal for an intentional crime; to which have not been prosecuted for deliberate crimes and it is not terminated due to statute of limitations, reconciliation, pardon or amnesty or convictions for these crimes is not deleted or removed and which have not been released from his position with the judgment of the Court of Justice in criminal matters;
5) which is also otherwise impeccable reputation;
6) which have not been active in the company (the company) in the management and audit bodies so that their company (the company) has been reduced to a malicious bankruptcy;
7) which is not deprived of the right of establishment.
 
21. article. A foreign bank branch must be the person who complies with the provisions of article 20 2., 3., 4., 5., 6, and 7.
 
22. article. Bank Council, the Governing Board and of the Audit Commission members must be persons who comply with the provisions of article 20, paragraphs 4 and 7.
 
23. article. Commercial banks and foreign banks ' branches must receive authorization by the Bank of Latvia in the following cases: 1) if the increase or decrease of share capital;

2) if the Chairman of the Board is changed or foreign commercial banks, the head of Department or the Deputy Chief Accountant;
3) change of legal address;
4) If you change the name of the commercial banks;
5) if commercial bank are reorganized.
 
Chapter III. Commercial operation of the regulatory requirements of article 24. To ensure smooth operation, commercial banks should be subject to the following guidelines of the Bank of Latvia: 1) the equity minimum size;
2) capital adequacy;
3) liquidity;
4) concentration of exposures;
5) investment restrictions;
6) restrictions on foreign currency open position.
 
25. article. Commercial banks own capital must not be less than the statutory minimum founding capital. If the equity falls below minimum capital formation by 50 percent, to apply to the Cabinet of Ministers of 18 July 1995 the Regulation No 211 "for recovery and bankruptcy of commercial banks".
 
26. article. Commercial banks equity capital to assets and off-balance-sheet items total (capital adequacy) must not be less than ten percent.
 
27. article. Commercial banks of their assets should be sited so as to ensure at any time the vendor legally substantiated the claims. Liquidity the regulatory requirements established by the Bank of Latvia.
 
28. article. Commercial banks reserves in its account at the Bank of Latvia and in cash commercial banks which may not be less than the Bank of Latvia Council approved margin percentage of total commercial banks about leverage.
Reserve requirements, the Bank of Latvia used to control money supply.
 
29. article. The people's banks: commercial banks, 1) shareholders whose equity capital is ten percent or more;
2) commercial banks or subsidiaries of the mother, as well as the parent company's other subsidiaries;
3) commercial banks, the Council of the Board and members of the internal audit service;
4) that article referred to in paragraph 1, the shareholders of commercial bank — — natural persons, the Bank Executive Board, Council and members of the internal audit service of spouses, relatives, and brother-in-law, counting up to the third degree of kinship and affinity to the second degree;
5) company that Bank shareholders, Council or Board members own more than ten percent of the share capital.
 
30. article. On the interrelated group of people considered two or more persons to form one common commercial risks, one of them, directly or indirectly (through subsidiaries) controlled by the other or more people.
In assessing the existence of such obligations, account must be taken of factors such as common ownership, management, and direct guarantees mutual dependence on business dealings.
 
31. article. Commercial banks risk transaction qualifies as a great, if the transaction amount exceeds ten percent of the capital of commercial banks.
 
32. article. Large exposures should not exceed the total amount of own funds of commercial banks more than eight times.
 
33. article. For credit in excess of 100 000 (one hundred thousand) dollars to commercial banks, a week after the assignment must inform the Bank of Latvia.
 
34. article. The extent of the exposure to one person (interrelated group of people) can not exceed 25 percent of the equity of commercial banks.
 
35. article. The extent of exposure to people that banks must not exceed a total of 15 percent of the equity of commercial banks.
 
36. article. Commercial Bank's participation in the share capital of another company that is not a commercial bank may not exceed 15 percent of the equity of commercial banks.
 
37. article. Commercial Bank's total participation in share capital of companies that are not commercial banks must not exceed 60 percent of the equity of commercial banks.
 
38. article. Commercial banks investments in immovable and movable property, as well as participation in other companies (excluding banks) share capital the total may not exceed the equity commercial banks.
 
39. article. Commercial Bank may not directly or indirectly be issued credit or the same mother or the daughter companies released for the purchase of the shares, as well as to take on the credit security of own shares.
 
40. article. Commercial Bank of open position must not exceed: 1) no individual foreign currency — 10 percent of equity;
2) total in all foreign currencies — 20 percent of the equity.
 
41. article. Economic calculation and reporting regulations for submission of Bank of Latvia shall be determined.
 
42. article. Conditions referred to in article 38 of these rules, do not apply: 1) to the property and participation by commercial bank taken over as collateral for outstanding loans for a period of two years from the moment of the transfer;
2) to real and immovable property necessary for the commercial license for banking operations.
 
43. article. Credits issued for persons who are associated with the commercial bank, to be granted only with the unanimous adoption of a decision of the Board of Directors of commercial banks, which copy must be submitted within a week of the Bank of Latvia.
Commercial bank employees and people that banks may get credit on the same terms as the other bank customers.
 
44. article. Commercial bank lending must be carried out in accordance with the design and the Council approved a lending policy that defines the credit granting and repayment arrangements, loan portfolio monitoring and quality assessment criteria.
 
Article 45. Before and after commercial banks issuing credit check credit solvency of workers, regularly requiring the documents certifying the borrower's economic financial stability, ability to repay the loan and interest.
 
Article 46. Credit credit does a worker with one of the following types of collateral: 1) with movable property;
2) immovable property (mortgage);
3), CMR insurance policy on behalf of the commercial banks, policy banks storing;
4) with guarantees;
5) with securities;
6) with other kinds of securities, to the extent permitted under applicable law.
 
47. article. Commercial bank credit, the awarding of credit workers operating target, the amount of the credit and repayment arrangements, rate of interest and the procedure for the calculation of credit guarantees and other conditions.
The total amount of credit that is issued without this provision, the security referred to in article 46 shall not exceed 15 per cent of the equity of commercial banks.
 
48. article. Commercial banks should regularly take their assets and off-balance sheet liabilities assessment, as defined in the instructions of the Bank of Latvia.
 
49. article. For all its commercial banks issued bonds must be registered in the Bank of Latvia. Guarantees that are not registered in the Bank of Latvia shall be considered void.
 
50. article. If the commercial breaks into two or more commercial banks, commercial banks and the capital of the newly created capital may not be less than the statutory minimum formation capital.
 
51. article. After the merger of commercial banks developed commercial banks equity capital shall not be less than a certain amount of own funds of commercial banks before the merger and for the statutory minimum formation capital.
 
Chapter IV. Commercial banking and customer relations article 52. Commercial banks and customer relations governed by the laws and agreements.
 
53. article. Commercial banks should guarantee their customer and correspondent accounts, deposits and operations secret. To prevent fraud from the client side, commercial banks have the right to directly or through specially established for that purpose through the departments exchange information about customer loan accounts, but do not have the right to provide such information to other parties.
 
54. article. Details of the accounts of legal persons and such operations provided the entities themselves and their supreme bodies of the Bank of Latvia, the Court, the Prosecutor's Office, the national police authorities, State revenue service, State control, national insurance supervisory authorities, the banking agency and the State social insurance fund, in the cases provided for by law, as well as the provisions laid down in article 74.
 
55. article. News of the individual accounts and the operations performed by the same clients to be provided and their legal representatives, as well as: 1) of the Bank of Latvia authorized persons for the purposes of supervision of commercial banks;
the Court of Justice, the public prosecutor's Office 2) and the national police authorities, if these messages are required in criminal cases or in cases where the law may be applied in cases of confiscation of property;
3 the Court of Justice, the public prosecutor's Office and) national police authorities, if these messages are required in criminal cases; in civil matters, which satisfied a civil suit resulting from criminal proceedings; a civil case on child support enforcement (if no earnings or other things that may be directed recovery); the Civil Division of the deposits, which are the spouses; a civil case of the debtor's insolvency and bankruptcy;
4) Court and foreign consular offices if the necessary succession of accounts and deposits of depositors in the event of death;
5) national revenue does not pay taxes and duties;
6) State control in the cases provided for by law;
7) National Social Security Fund do not pay social tax;

8) this provision in article 74.
 
Article 56. The people who got their news for 54 and 55 of these rules in the cases referred to in the article, it is prohibited to disclose.
 
57. article. Funds of legal persons and other values in commercial banks, may seize only by decision of the Court or the Prosecutor's sanction, but the settlement of part or all of the operations to be carried out after the suspension, the State revenue service authorities as well as by the State social insurance fund's authority.
Drive to the funds of legal persons and other values can work only in accordance with the injunction of the Court or by the State revenue service authorities as well as by the State social insurance fund's authority in the cases provided for by law.
 
58. article. Deposits of natural persons and other values in commercial banks, may seize only with the sanction of the Prosecutor or the Court's decision.
 
Article 59. Drive on the physical person deposits and other values may be directed in accordance with the Court's injunction.
 
60. article. Depositor lose claim against banks, if sixty years there has not been any banking operations with this deposit.
The limitation period shall begin: 1) to fixed-term deposits with the time deposit costs in recent days.
2 deposits and term deposits) at the time — with the day when the last banking with this deposit.
 
61. article. Deposits, which barred commercial banks included in income,.
 
62. article. Requesting credit or on other contractual relationships with the commercial banks, as well as giving an overview of the performance of the obligation, the customer at the request of the commercial banks must provide full and truthful information about your financial situation and all property, and any property of the burdens, as well as to inform the Bank in writing, or customer in accordance with article 29 of these rules is not affiliated with commercial banks or in accordance with the provisions of article 30 is not related to a group of people.
 
Chapter v. Accounts and the annual report article 63. Commercial banks must take accounting records in accordance with the law "on accounting" (the Republic of Latvia Supreme Council and Government Informant, 1992, no. 44; Latvian journal, 1994, 149. No.) and the Bank of Latvia.
 
64. article. The Bank of Latvia is entitled to require from commercial banks and related companies in the consolidated accounts, the preparation and submission of which procedures and deadlines determined by the Bank of Latvia.
 
Article 65. Commercial banks for each reporting year must prepare a report, which must include a balance sheet, income statement, and attachments, as well as the message.
 
66. article. Accounting year must coincide with the calendar year. The first reference period can be shorter than a calendar year, but not longer than 12 months.
 
Article 67. The annual report should be prepared in accordance with these terms and the instructions of the Bank of Latvia. The annual accounts must give a true and fair view of the assets and liabilities of commercial banks, its financial position and profit or loss.
 
68. article. If it is not possible to make a true and clear picture of the commercial banks in accordance with the provisions of article 67, the annual report must contain certain additional information.
 
69. article. Annual report items must be assessed by the following general principles: 1) it must be assumed that the commercial bank will operate in the future;
2) should keep the same methods of valuation used in the previous reporting year;
3) evaluation shall in all cases be carried out with due care, subject to the following conditions: (a) only to be included in the report) of the balance sheet date for profit;
(b)) to take into account all possible losses, regardless of their provenance, even those that became known during the period between the balance sheet and the annual report;
c) account must be taken of all depreciation and depreciation amount, whether or not the year is a loss or a profit;
4) report should reflect all revenue and expenses relating to the financial year, irrespective of the date of payment;
5) assets and liabilities must be valued separately;
6) each year to the opening balance of the period should be consistent with the previous year's closing balance.
 
70. article. Exceptional cases may derogate from the provisions referred to in article 69 of the General principles of evaluation, giving the resignation with the attachment points, what is the impact on commercial banks, the resignation of the assets and liabilities, financial position and profit or loss.
 
71. article. Report should contain a statement of the financial condition of the Bank and its activities. If the annual report has had a significant impact in some special circumstances or the annual report could not be considered to be sufficient information for these conditions to be provided in a separate report.
The report should also provide details of important events, if any, after the end of the reporting year, the commercial bank anticipated developments and important development measures.
 
72. article. The report or statement in connection with the profit and loss account or balance sheet to provide proposals for the commercial distribution of profits, dividends or damages incurred.
 
73. article. Commercial Bank annual report is checked by the Bank of Latvia approved Auditors. If this check is performed, the general meeting of shareholders of commercial bank annual report to confirm the ban.
 
74. article. Making the examination, auditors have the right to get acquainted with the commercial bank's assets, accounting records, supporting documents and other information. Commercial banks, Managing Director of the Board and Auditors must be provided all the necessary information.
 
75. article. Commercial banks must inform the Bank about any circumstances which may have a significant effect on the future performance of commercial banks.
 
76. article. Balance sheet, off-balance sheet, profit and loss account items, and report the specific content, as well as separate items in the evaluation methodology determined by the Bank of Latvia.
 
77. article. The annual report must be submitted to the Bank of Latvia, ten days after its approval by the general meeting of shareholders of the Bank, but not later than three months after the end of the reporting year.
 
78. article. The annual report will be published by the Bank of Latvia.
 
Article 79. Must be running on each commercial bank internal audit service, which is a commercial unit and commercial bank's internal monitoring system.
 
80. article. Commercial Bank's internal audit service is to discover flaws and errors in commercial bank workers, as well as the default task, work rules and authority limits.
 
81. article. The internal audit service shall have the right to consult all documents and monitor commercial banks commercial banks working in any of its activities, as well as to demand written explanations from the employees of commercial banks for deficiencies and errors that result from their activities.
 
Article 82. Commercial banks in the Bank of Latvia submitted its reports in accordance with the requirements of the Bank of Latvia forms, deadlines and instructions.
Chapter VI. Commercial bank supervision and control article 83. To promote the Latvian banking system security, stability and development, the Bank of Latvia adjusts the supervision and control of commercial banks.
 
84. article. The supervision and control of commercial banks, the Bank of Latvia shall be carried out in accordance with the law and these rules.
 
85. article. The Latvian Bank supervisory process determines the order of supervision in accordance with the law and these rules.
 
86. article. The usual supervisory arrangements apply in the following cases: 1) commercial banks equity is greater than or equal to the paid-up capital;
2) capital of not less than ten percent;
3) Latvijas Banka's binding instructions provided conditions are met.
 
87. article. Enhanced monitoring arrangements apply in the following cases: 1) commercial banks equity is less than the share capital, but the reduction does not exceed one third of the paid amounts;
2) capital adequacy is 9-5 percent;
3) Latvijas Banka's binding instructions conditions are not complied with or the governing bodies of commercial banks failing to ensure effective operation of the commercial banks.
 
88. article. If the enhanced monitoring is applied, the Bank of Latvia is entitled after the banking agencies for information, do the following: 1) warn commercial banks;
2) to stop the service of the Latvian Bank credit to commercial banks;
3) stop of currency operations for commercial banks to provide services;
4) prohibit banks invest mazlikvīdo assets;
5) restrict or prohibit commercial banks to attract deposits;
6) restrict or prohibit the banks issue loans;
7) to propose to the shareholders to change the commercial management of the commercial banks;
8) to stop commercial banks accounts, which run correspondent accounts;
9) partly to stop other banking operations.
 
Article 89. To control the order the extended monitoring requirements, the Bank of Latvia has the right to appoint their own trustees.
 
Article 90. The Bank of Latvia to issue binding instructions to the commercial banks.
 
91. article. Commercial banks by the Bank of Latvia within the supply it with all the information needed to carry out the functions of the Bank of Latvia.
 

92. article. The Bank of Latvia authorized person at least once a year check the operation of the commercial banks.
 
93. article. The results of the inspection to be submitted to the management of commercial banks in the written report, which mentioned the threats and provide guidance on the necessary adaptations to future work and commercial bank lending policy.
If a commercial bank does not agree with the opinion of the inspection, it may submit a complaint to the Council of the Bank of Latvia, which is entitled to impose new testing or also decide on amendment of the instructions given above.
If not satisfied with the Commercial Bank of Latvia Council decision of test cases, it is entitled to require judicial review of the decision of the Council.
 
94. article. The Bank of Latvia may request a commercial bank or the Council general meeting be convened and set the escalated issues. The Bank of Latvia authorized employees have the right to participate in such meetings.
 
Article 95. For commercial distribution prohibited advertising, providing false information about its activities.
 
1. The transitional issues With the entry into force of the law "on the banks" (the Republic of Latvia Supreme Council and Government Informant, 1992, 22/23, 44/45.nr.; Latvian journal, 1994, 60 no). is valid to the extent not in conflict with these rules.
2. This rule 34, 35 and article 40 shall enter into force by 1 September 1996.
Prime Minister m. cock Finance Minister i.-Sāmīt