Amendments to Latvian Bank Regulation No. 265 'Credit Risk Management Regulations' dated 18 December 2023

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Latvian Bank Regulation No. 423
Riga, 3 August 2026

Amendments to Latvian Bank Regulation No. 265 'Credit Risk Management Regulations' dated 18 December 2023

Issued in accordance with the fourth paragraph of Article 34.2 and Article 55 of the Credit Institutions Law

Make the following amendments to Latvian Bank Regulation No. 265 'Credit Risk Management Regulations' dated 18 December 2023 (Latvijas Vēstnesis, 2023, No. 248):

Express point 2.1 as follows:

"2.1. accounting standards - international accounting standards introduced by Commission Regulation (EU) No 2023/1803 of 13 August 2023 adopting several international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council;".

Supplement the regulations with point 2.9 as follows:

"2.9. moratorium - a temporary measure provided for by law or a regulatory act issued on its basis, which the institution applies and, for a specified period, modifies the payment schedule stipulated in the credit agreement by suspending, deferring, or reducing payments."

Supplement the regulations with point 2.1 as follows:

"2.1 The terms 'credit for housing acquisition' and 'consumer credit' used in these regulations correspond to the usage of these terms in Latvian Bank regulations that establish and regulate the operation of the Credit Registry."

Express point 3 as follows:

"3. A credit institution registered in another Member State, which is entitled to provide financial services in the Republic of Latvia, in accordance with the third paragraph of Article 6 of the Credit Institutions Law, applies the requirements for borrower-oriented instruments set out in point 43 of these regulations and subsections 5.2.2 and 5.2.3 of Chapter 5 to credits granted in the Republic of Latvia."

Express point 6 as follows:

"6. The institution does not apply the requirements for borrower-oriented instruments set out in point 43 of these regulations and subsections 5.2.2 and 5.2.3 of Chapter 5 to credits it grants in another Member State."

Strike out the words and parentheses 'allowable credit risk level (risk tolerance) and' in the first sentence of point 11, and replace the word 'allowable' in the third sentence with 'desired'.
Replace the word 'allowable' in point 13.2 with 'desired'.
Replace the word 'credit risk' in point 13.7 with 'credit risk and its'.
Replace the words 'internal control' in point 16 with 'management'.
Express point 22 as follows:

"22. The institution combines two or more clients into a group of interconnected clients, as well as develops the procedure referred to in point 60 of these regulations for identifying groups of interconnected clients in accordance with Commission Delegated Regulation (EU) 2024/1728 of 6 December 2023 supplementing Regulation (EU) No 575/2013 of the European Parliament and of the Council with regard to regulatory technical standards specifying the conditions for identifying groups of interconnected clients, and the requirements set out in Section 5, Section 8, and the Annex of the European Banking Authority's Guidelines of 29 April 2026 No. EBA/GL/2017/15-rev1 'Guidelines on interconnected clients in accordance with Article 4(1)(39) of Regulation (EU) No 575/2013'."

Replace the word 'allowable' in point 28.1 with 'desired'.
Strike out point 28.7.
Strike out the word 'scenarios' in point 29.4.
Supplement point 34 after the word 'sources' with parentheses and the words '(including those related to environmental, social, and governance factors)'.
Replace the words 'internal control' in the second sentence of point 38 with 'management'.
Express point 43 as follows:

"43. The maximum repayment term for a credit granted to a natural person for housing acquisition is 30 years from the date the agreement enters into force, and the maximum repayment term for consumer credit (including financial leasing transactions) is seven years from the date the agreement enters into force. If the institution conducts a repeated creditworthiness assessment of the borrower within an existing credit for housing acquisition agreement or consumer credit agreement (including financial leasing), or grants a new credit within the framework of mortgage refinancing, the terms mentioned in this point may be determined from the date the amended or new credit agreement enters into force."

Replace the words 'internal control' in the first sentence of the introductory part of point 45 with 'management'.
Replace the word 'allowable' in point 51 with 'desired'.
Replace the words 'risk control' in the second sentence of point 59 with 'risk management'.
Express point 70 as follows:

"70. Deviations from the limitations mentioned in points 69 and 71 of these regulations, the maximum term limitations mentioned in point 43 of these regulations, and the limitations mentioned in point 83 of these regulations in a calendar quarter in total must not exceed 10 percent of the amount of credits newly granted to natural persons (based on the last available information for the previous calendar quarter). These deviations are permissible if the borrower's creditworthiness assessment indicates that he will be able to repay the credit, even exceeding the limitations mentioned in this point. The institution documents the type of deviation and is able to explain the risk-mitigating elements in each specific case where the exemption is applied. The institution applies deviations at an individual level if it is not subject to consolidated supervision, or at the level of the prudential consolidation group or sub-consolidated if it is subject to consolidated supervision."

Supplement the parentheses in the first sentence of point 81 with the words 'as well as rent or lease payments for agreements where the obligation or option to purchase the subject matter of the agreement is not specified in the agreement itself or in any other separate agreement'.
Replace the words 'risk and transition' in point 102 with 'and transition environmental'.
Replace the words 'risk control' in point 128 with 'risk management'.
Supplement the regulations with point 142.1 as follows:

"142.1 For environmental risks that the institution has identified as significant, taking into account the provisions of points 11, 12, 13, 14, and 15 of the European Banking Authority's Guidelines of 8 January 2025 No. EBA/GL/2025/01 'Guidelines on Environmental, Social, and Governance (ESG) Risk Management', it develops quantitative credit risk assessment indicators in accordance with the provisions of points 17, 18, 19, 20, and 69 of the aforementioned guidelines."

Replace the word 'control' in point 164.3 with 'management'.
Supplement the regulations with Chapter 7.1 as follows:

"7.1 Application of Moratorium

172.1 The institution applies a moratorium when modifying credit agreement terms if it meets all of these conditions:

172.1 1. it is introduced in connection with a specific event or other circumstances defined by law;

172.1 2. it applies to a group of borrowers previously defined by law;

172.1 3. it provides solely for the measures stipulated in point 165 of these regulations;

172.1 4. it is not applied to new credits granted after the commencement of the respective event or granted during the occurrence of other circumstances defined by law.

172.2 The institution evaluates each case individually and may not recognize the borrower as being in financial difficulties if the modification of credit agreement terms is related only to the application of a moratorium."

Replace the abbreviation 'EBIDTA' in point 189 with the abbreviation 'EBITDA'.
Supplement the first sentence of point 222 after the word 'institution' with the words 'with an increased share of NPL assets in accordance with Chapter 9 of these regulations'.
Supplement point 225.1 after the words 'individually or' with the word 'prudential'.
Replace the words 'risk control' in point 233 with 'risk management'.
Replace the words 'risk control' in point 250 with 'risk management'.
Replace the words 'risk control' in point 251 with 'risk management'.
Replace the word 'half-yearly' in point 255 with 'yearly'.
Supplement point 256 after the words 'institution's board' with the words 'or its appointed committee'.
Supplement point 265 with a second sentence as follows:

"When conducting environmental scenario analysis (including stress testing and resilience analysis), the institution applies the requirements set out in the European Banking Authority's Guidelines of 4 November 2025 No. EBA/GL/2025/04 'Environmental Scenario Analysis Guidelines'."

Replace the words 'internal control' in point 266 with 'management'.
In the informative reference to European Union directives and other international documents:

express point 3 as follows:

"3) European Banking Authority's Guidelines of 29 April 2026 No. EBA/GL/2017/15-rev1 'Guidelines on interconnected clients in accordance with Article 4(1)(39) of Regulation (EU) No 575/2013';

supplement the informative reference with points 7 and 8 as follows:

"7) European Banking Authority's Guidelines of 8 January 2025 No. EBA/GL/2025/01 'Guidelines on Environmental, Social, and Governance (ESG) Risk Management';

European Banking Authority's Guidelines of 4 November 2025 No. EBA/GL/2025/04 'Environmental Scenario Analysis Guidelines'."

Deputy President of the Latvian Bank M. Kālis

Legal Act Information

Title: Amendments to Latvian Bank Regulation No. 265 'Credit Risk Management ..

Status:

In force

in force

Issuer: Latvian Bank

Type: regulations

Number: 423 Adopted: 03.08.2026. Enters into force: 07.08.2026. Published: Latvijas Vēstnesis, 149, 06.08.2026.

OP number:

2026/149.4

Amendments to Latvian Bank Regulation No. 265 'Credit Risk Management Regulations' dated 18 December 2023

Lineage: In force