Updated on 15.03.2011.

Pursuant to the Law "On the Bank of Latvia", it is the duty of the Bank of Latvia to organise and ensure the operation of the interbank payment systems in Latvia.

One of the key tasks of the central bank is to establish and maintain a secure and effective payment system in Latvia. The system plays an important role in the development of the country's financial sector, ensuring non-cash settlement between banks. Only through an effective payment system can the central bank perform its main task - implementation of monetary policy.

The key elements of the national payment system are financial institutions and the system's infrastructure (its technical and administrative management). The Bank of Latvia organises and maintains this infrastructure, regulates its operations, analyses and forecasts possible developments to ensure that it functions as efficiently as possible.

Currently there are three fully automated systems in operation at the Bank of Latvia used for inter-bank settlement in lats and euro, and which are harmonised with EU requirements.

A real time gross settlement system (SAMS) was launched on 8 September, 2000. SAMS is designed for large volume, urgent payments related to inter-bank market transactions, open market and other Bank of Latvia monetary policy operations. The system enhances risk control and is an effective tool for the implementation of monetary policy. It has a positive impact on economic activities both in domestic and foreign markets.

On 19 November 2007, the interbank euro payment system TARGET2-Latvija, one of the 21 components in Trans-European Automated Real-time Gross settlement Express Transfer System TARGET2, started its operation. The operation of TARGET2-Latvija is ensured by the Bank of Latvia in conjunction with other authorized banks of the European System of Central Banks.

The Electronic Clearing System (EKS) is the net settlement system of the Bank of Latvia that was launched on 17 November 1998, replacing the previous paper-based clearing system, and is used for handling retail payments. The EKS can be regarded as an ACH (automated clearing house) system where payment handling is fully automated and only electronic documents are accepted and processed.

The EKS is the largest retail payment handling system in Latvia that ensures fast, efficient and low-cost settlements in lats and euro. The EKS commenced the handling of retail payments in euro in January 2008, giving an opportunity to settle domestic customer payments in euro within one business day - similar to payments settled in lats.  As of 9 November 2010 EKS euro is SEPA compliant system, which ensures its participants' capability to send and receive euro payments within the SEPA area – EU countries, Iceland, Liechtenstein, Norway, Switzerland and Monaco.

In October 2007, the Eurosystem launched the SEPA (Single Euro Payments Area) project also for the non-euro area countries, including Latvia. The single currency and a single set of payment instruments comprise the single euro payments area. The Bank of Latvia, similar to the other NCBs of the respective EU countries, is one of the driving forces behind the project in Latvia. To ensure efficient SEPA introduction in Latvia, on 28 October 2008 the National SEPA Working Group, representing all project's stakeholders, was established within the Euro project.

The Eurosystem launched TARGET2-Securities Project in 2006 to harmonise securities settlement in euro in all EU Member States with the single shared platform and legal framework, thus contributing to the implementation of the Lisbon Strategy. To participate in the Project, the TARGET2-Securities National User Group of Latvia comprising the representatives of the Latvian Central Depository, Bank of Latvia, Financial and Capital Market Commission, Treasury of the Republic of Latvia and Association of Latvian Commercial Banks, was established in 2007. The TARGET2-Securities User Group of Latvia is headed by the representatives of the Bank of Latvia and Latvian Central Depository. Similar to the national central banks of other European countries, the Bank of Latvia will ensure the settlement of the cash leg of securities transactions in euro through participation in TARGET2-Securities.