The Latvian central bank (Latvijas Banka), Finance Latvia Association and the commercial banks with the widest network of ATMs and branches – Swedbank AS, AS SEB banka, the Latvian branch of Luminor Bank AS and AS Citadele banka – have agreed to a reduced minimum number of ATMs on Latvian territory, according to a central bank release on November 27.
A Memorandum of Cooperation signed in autumn 2021 has been updated for the second time. It is still the case that every municipality must have at least one ATM available and the current number of designated 'critical ATMs', which are supplied with cash first in the event of a crisis, will remain at 99.
In addition, the straight-line distance from any location in Latvia to the closest ATM should not exceed 20 kilometers and ATMs must be available at least 12 hours a day.
However, the revised agreement also gives the banks more leeway in reducing the number of ATMs. There were 902 ATMs in Latvia upon the signature of the Memorandum in 2021 (894 of those were maintained by the signatories of the Memorandum). Over two years, their number has decreased by 1.7%, and in mid-November 2023, there were 887 ATMs in Latvia (882 of those maintained by the signatories of the Memorandum).
The updated Memorandum projects that the number of ATMs maintained by its signatories will fall by 3.3% (to 853) in the first half of 2024.
"This is mainly related to the request of one market participant (taking into account the requirements of its external service provider and the pressure from rising costs) to make the ATM locations more efficient," the central bank said, without naming which 'market participant' it was referring to.
The Memorandum also stipulates an additional restriction for all its signatories, i.e. to dismantle no more than 5% or 17 ATMs in Riga as well as to relocate no more than the same number of ATMs from Riga to territories outside the capital.
The signatories of the Memorandum have agreed that the number of 'critical' ATMs in the country will not be reduced at least until 1 January 2025.
According to a population survey conducted by Latvijas Banka and SIA Latvijas Fakti in August 2023, 86% of Latvia's population are satisfied with their possibilities to withdraw cash from their bank accounts, 9% are not satisfied, and 3% do not use cash.
"Since the conclusion of the Memorandum in autumn 2021, the geopolitical situation has changed significantly, thus imposing additional requirements for access to financial services, including cash. Cash represents a cornerstone of economic security and is incorporated in various risk scenarios of the country, " said Jānis Blūms, Head of the Cash Department of Latvijas Banka.
"However, the number of ATMs in the country is continuously, albeit slowly, decreasing in the new circumstances as well. To ensure cash infrastructure sustainability and access to cash, we are working on consolidating the role of cash and the requirements for access to it in the country with a law that would take effect as of 1 January 2025."