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01 December 2020 / article

Basic Banking Service for everyone, undertakings now included!

In recent years, an increasing number of undertakings has been refused access to banking services or has seen its relationship with its longstanding bank terminated without receiving a statement of reasons. Although businesses have an obligation under Belgian law to open a current account with a bank or other financial institution, practice has shown that banks may be reluctant to open accounts. Many sectors have encountered difficulties, particularly the diamond sector, the hotel and catering industry, the gaming sector and “second-chance” entrepreneurship. This has left these undertakings unable to carry on their business, since they lack any effective legal means to force banks to accept them as clients.

Basic Banking Service for everyone

A significant number of undertakings have had to live with the “sword of Damocles” of closure of their bank accounts hanging over them. The main reason for a bank to refuse a new client or to terminate an existing relationship is the anti-money laundering and “know-your-customer” obligations contained in the Act of 18 September 2017 (the AML Act).

To overcome such effects the Belgian legislature recently introduced a right to a basic banking service for undertakings. This was achieved through an Act of 8 November 2020 amending the Code of Economic Law (the CEL). A similar right to a basic banking service has been in place for consumers since 2003.

What undertakings are eligible?

Any undertaking, registered office or branch registered in the Crossroads Bank for Enterprises which has been refused access to a basic banking service by at least three Belgian or foreign credit institutions, is entitled to avail itself of the new legislation.

Undertakings which have a current account (in Belgium or in any other EU Member State) already receive a basic banking service and cannot therefore force another bank to accept them as a client. 

How does it work?

After three refusals, an undertaking can file an application to benefit from the basic banking service with the new Basic Banking Service Chamber (which has not yet been installed). The form to be filled in by the applicant is available from credit institutions. The bank which delivers the application form to an undertaking will not necessarily become its basic banking service provider. Within one month of the application, the Basic Banking Service Chamber must designate, at its discretion, a credit institution established in Belgium among the systemically important banks as defined by the Belgian Banking Act (including BNP Paribas Fortis, KBC, Belfius, ING and Argenta) to act as a ‘basic banking service provider’. The undertaking cannot choose its basic banking service provider, which is a significant difference from the basic banking service regime for consumers where such choice is allowed.

What services are included in the ‘basic banking service’?

The basic banking service comprises :

  • carrying out payment transactions, including the transfer of money to another payment account held with the same or another payment service provider;
  • carrying out direct debit payments
  • payment transactions with a payment instrument; and
  • depositing or withdrawing cash in one of the EU Member States.

It must be stressed that the basic banking service does not confer any right to obtain a credit facility.

What are the consequences for credit institutions?

Credit institutions must make information on this new regime available to undertakings, in the first place on their website.

Although it is still possible to refuse to provide an undertaking the basic banking service, a statement of reasons must be given in writing within ten working days.

The provider of a basic banking service has the right to (and must in some cases) refuse or terminate the provision of the basic banking service, in accordance with the AML Act.

Entry into force

The new basic banking service regime for undertakings will enter into force on 1 May 2021.

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