Finance minister: Banks have to better justify account closures
Minister of Finance Martin Helme (EKRE) said that, going forward, banks will have to provide more justification if they do not wish to open accounts or want to close them for people and businesses, adding that the Ministry of Finance is also considering setting up a financial ombudsman institution.
"Against the backdrop of the fight against money laundering, we have unfortunately reached the point where it has become excessively common to not open accounts, to close accounts, and to not make transfers — this has already begun to obstruct Estonia's business environment, and urgently needs to be addressed," Helme said in a press release on Thursday.
"The proposed changes should improve the situation and motivate banks to carefully consider whether and why it is not wise to open an account or whether an existing account should be closed after all," he added.
Upon the entry of force into new amendments, banks will be required to inform both individuals and companies of the reasons why the account was not opened or why an existing customer relationship was terminated, except in cases of suspected money laundering. In the latter case, the bank may not justify its decision.
Unless a bank justifies the refusal to open an account or the decision to close an existing account, both the individual and the company have the right to go to court. The court can only control the bank's right to close or not open an account, however, and cannot order the bank to open an account, but to award damages upon a reasoned request.
At the proposal of the finance minister, amendments to the Credit Institutions Act are being processed within the framework of the bill of amendments to the Money Laundering and Terrorist Financing Prevention Act and other legislation being handled by the Riigikogu.
The Ministry of Finance is also in the process of drafting a regulation to improve the efficiency of the out-of-court settlement of disputes related to financial services.
This could mean the establishment of a separate body — a financial ombudsman — or creating an entity within an existing state institution that individuals and companies could turn to in order to protect their rights in relation to financial services. This should reduce the need to take such matters to court.
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Editor: Aili Vahtla