Published: 29.09.2022

Zita Zariņa, Member of the Council, Latvijas Banka

In September 2021, the general public learned about the agreement reached in the financial sector on ensuring cash availability for residents of Latvia. The Memorandum of Cooperation in this area was signed by Latvijas Banka, Finance Latvia Association and the commercial banks having the widest network of ATMs and branches: Swedbank AS, AS SEB banka, the Latvian branch of Luminor Bank AS and AS Citadele banka.

The aim of the Memorandum was to ensure cash availability for residents across the entire territory of Latvia, setting the minimum requirements for availability and reachability of cash. The signatories of the Memorandum agreed on the following course of action to ensure cash availability throughout Latvia:

  • preserve the existing network of ATMs and refrain from reducing the number of ATMs by more than 5% until 1 January 2023;
  • when creating the network of ATMs, the straight-line distance from any location to the closest ATM should overall not exceed 20 kilometres for 99% of Latvia's population;
  • ensure adequate actual accessibility of ATMs to consumers (at least 12 hours a day).

A year has passed and it is now time to look back at the progress made in achieving the aims of the Memorandum.

There were 902 ATMs in Latvia during the drafting of the Memorandum. A year later, in autumn 2022, their number has seen an insignificant decrease (by 1%) – to 894. It can therefore be concluded that the financial sector has honoured its commitment to refrain from reducing the number of ATMs by more than 5%.

The population survey conducted in August 2022 by SIA Latvijas Fakti helps to assess the population's satisfaction with the possibilities of accessing cash. Within a year, the share of people satisfied with their possibilities of withdrawing cash from their accounts has risen from 82% to 84%. In comparison with the data from the survey conducted in February, changes in this figure have not been observed this year. At the same time, there is a continuous decline in the share of respondents dissatisfied with the possibilities of withdrawing cash from their accounts. In August 2021, 11% of respondents expressed their discontent compared with 10% in February 2022 and 8% in August.

Why does Latvijas Banka pay particular attention to the issue of cash availability? Because it not only affects the public's freedom of choice but also strengthens Latvia's economic security which is especially relevant at present when Russia has launched war on Ukraine. Cash is part of the critical financial sector infrastructure; therefore, we continue our cooperation with the sector to implement measures ensuring access to cash in "times of peace" and be ready to ensure population's access to their money in times of crisis.

At present, while continuing our successful cooperation with partners from Finance Latvia Association and Latvia's leading commercial banks under the Memorandum of Understanding concluded in 2021, we are planning specific further steps towards ensuring cash availability also in the future.

Cash is and will remain a significant payment and savings instrument. The development of non-cash means of payment will not change this situation; the public will only benefit from extended and complemented freedom of choice and convenience.