Latvia's Ministry of Finance has prepared draft amendments to the Credit Institutions Law to create a regulatory framework for specialised credit institutions, and the Cabinet of Ministers is scheduled to consider the bill on 17 June. The proposal is positioned as a way to strengthen competition, support innovation and broaden access to financial services across Latvia. The draft would allow specialised credit institutions to be established with a minimum initial capital of EUR 1 million, compared with the current EUR 5 million threshold. While benefiting from the lower entry capital, these institutions would remain subject to the full set of prudential requirements applicable to credit institutions, including risk assessment, capital adequacy and financial stability requirements, and would be required to operate with a limited number of clients using digital or other innovative technologies that materially improve the quality and availability of financial services. The amendments are also presented as aligning Latvia’s framework more closely with other Baltic states, using an option under EU Directive 2013/36/EU that Latvia has not previously implemented.
Ministry of Finance (Latvia) 2025-06-16
Latvia's Ministry of Finance drafts Credit Institutions Law amendments to introduce specialised credit institutions with EUR 1 million minimum capital
Latvia's Ministry of Finance has drafted amendments to the Credit Institutions Law to establish a regulatory framework for specialised credit institutions, reducing the minimum initial capital requirement from EUR 5 million to EUR 1 million. These institutions will adhere to full prudential requirements and focus on innovative technologies to enhance financial service quality and access. The amendments aim to boost competition, support innovation, and align Latvia's framework with other Baltic states under EU Directive 2013/36/EU.