Today the Council of Latvijas Banka has adopted amendments to the "Regulation for the Participation Procedure in Latvijas Banka's Electronic Clearing System" of 9 September 2010 (in effect as of 5 May 2015).
The amendments provide for the introduction of one more, night-time clearing cycle, in Latvijas Banka's electronic clearing system (the EKS), thus continuing the development of Latvia's interbank payment system and making settlement faster and more convenient for customers.
On 8 December 2014, Latvijas Banka became a direct participant of the STEP2 interbank payment system maintained by EBA Clearing, reducing the payment exchange time between the EKS and STEP2 systems and thus enabling the EKS participants to improve customer payment servicing procedures. The STEP2 system maintained by EBA Clearing is the only retail payment system providing reachability of all European Union credit institutions in the Single Euro Payments Area (SEPA).
The amendments to the "Regulation for the Participation Procedure in Latvijas Banka's Electronic Clearing System" will accelerate the settlement of payments submitted by the customers of EKS participants at the end of a business day for the participants of other SEPA payment systems. The amendments intend to introduce one more clearing cycle at 9.00 p.m. (the night-time cycle) in the EKS. Settlement in TARGET2-Latvija will take place with the value date of the next TARGET2 business day, and the payments processed during the EKS night-time cycle will be submitted to the first cycle of the STEP2 system at 8.15 a.m.
The introduction of such a night-time cycle will enable the EKS participants to accelerate the transmission of the payments submitted by customers at the end of a business day to the STEP2 system and the beneficiary institutions participating in the STEP2 system as well as to credit funds to customers' accounts in the morning of the following business day after 8.30 (currently it is possible only after 11.00 a.m.).
The amendments also provide for improvement of the contingency and business continuity procedures associated with the introduction of the EKS night-time cycle. The improved procedures will reduce the number of payments rejected or returned in the EKS due to technical problems of the EKS or other SEPA payment systems.