From 1 May 2021, businesses will also have an access to a Basic Banking Service. This comprises a guaranteed access to a bank account so that they can, in principle, use basic payment services.
For consumers, a Basic Banking Service was already introduced in 2003. This is now also happening for businesses.
This is important for businesses that are confronted with problems to obtain and maintain a bank account, in particular companies or businesses that have gone bankrupt or that operate in certain sectors (e.g. the hotel and catering industry, diamond sector, etc.).
1. What does this Basic Banking Service comprise?
Every business that is registered with the cross-road bank for enterprises, hence has a CBE number in Belgium, and of which an application for payment services at least has been refused by three credit institutions is entitled to a Basic Banking Service as from 1 May 2021, subject to certain conditions.
The Basic Banking Service mainly concerns payment transactions by means of payment instruments and wire transfers, but only within the EU. This Basic Banking Service must be possible at the banking counter or at cash dispensers during or outside the credit institution's opening hours and must allow the business to carry out an unlimited number of electronic transactions via the Internet platform of the Basic Banking Service provider.
The Basic Banking Service shall be offered in euro and, at the request of the business, in US dollars.
2. Which business can apply for a Basic Banking Service?
Any business that has been refused payment services by three credit institutions can apply to obtain the Basic Banking Service.
The refusal of the payment services must be explicitly motivated in writing, without delay and at the latest within 10 working days following the receipt of the application, unless this would be contrary to the objectives of national security, public order or to anti-money laundering legislation.
Credit institutions that refuse a payment service must also explicitly mention
- the complaint and out-of-court redress procedures available to the business challenging the decision, and
- the full name, address, telephone number and electronic address of the Mediation Office for Financial Services and of the competent supervisory authority at the FPS Economy. If a business has a dispute with its credit institution, this can be submitted to the Mediation Office, whose decision is binding.
3. How will the Basic Banking Service provider be appointed?
Businesses that have been refused payment services by three credit institutions can submit an application for Basic Banking Services to the Basic Banking Services chamber.
The application must be in writing, using a form that is provided for by the credit institution either on paper or electronically.
The application form shall contain
- a declaration on honour that the business does not already have a Basic Banking Service or a payment account that allows it to make use of the relevant banking services;
- a confirmation, supported by documentary evidence, that an application for payment services by the business was refused at least three times or, if applicable, that it has been informed that its accounts will be closed.
The Basic Banking Service chamber then requests a confidential advice from the Financial Information Unit (CTIF-CFI). If the latter gives a positive advice, or does not respond within 60 calendar days, the Basic Banking Services chamber will appoint a credit institution as the Basic Banking Service provider. This institution must, of course, be established in Belgium.
The requesting business must then provide the chamber with the information and documents required to comply with the identification and identity verification obligation under anti-money laundering legislation.
At the latest within one month following the month in which the application file can be considered complete, the Basic Banking Service chamber will appoint the eligible Basic Banking Service provider in a staggered manner.
For businesses in certain sectors (e.g. diamond sector, art dealers, real estate agents, etc.), specific additional risk mitigation measures or a sectoral code of conduct to be concluded between the sector concerned and the representative professional association for the financial sector must also be established before a Basic Banking Service provider can be appointed.
4. Legal restrictions to comply with by the Basic Banking Service provider
The Basic Banking Service provider must take into account the following legal restrictions:
- It may neither explicitly nor implicitly offer or allow the opening of a credit line linked to the Basic Banking Service;
- It may not make the access to the Basic Banking Service conditional on the conclusion of an agreement relating to ancillary services;
- A payment transaction carried out within the framework of the Basic Banking Service cannot be executed if it results in an overdraft.
5. The credit institution may refuse or withdraw a Basic Banking Service
The appointed Basic Banking Service provider may refuse the Basic Banking Service in the following cases:
1° a member of the management body of the business or a person entrusted with the effective management or, as the case may be, a member of the executive committee, has been convicted of fraud, abuse of trust, fraudulent misrepresentation of assets or forgery;
2° the company has opened another payment account after its application in Belgium or in another Member State with which it can make use of the payment services. The business must immediately inform the credit institution with which it has contracted a Basic Banking Service of any of such events.
The decision to refuse must be communicated in writing, free of charge, and must explicitly include the specific grounds and justification for it.
The Basic Banking Service provider may withdraw the Base Banking Service if:
1° someone from the management or the entrepreneur has been convicted of swindling, abuse of trust, fraudulent bankruptcy, forgery, or the business has abused the payment account within the framework of the Basic Banking Service for illegal purposes;
2° no payment transaction has taken place for more than 12 consecutive months;
3° incorrect information has been provided in order to obtain the Basic Banking Service;
4° another payment account is opened in Belgium or in another Member State;
5° the Anti-money Laundering law of 18 September 2017 requires this.
Except in case of points 1, 3 and 5 hereabove, where termination takes immediate effect, a notice period of at least two months must be observed. This decision has to be communicated in writing and free of charge and explicitly includes the specific grounds and justification for the decision.
Practice shows that many businesses encounter difficulties in obtaining or maintaining a bank account.
It is therefore a good evolution that a Basic Banking Service for businesses is also given a legal framework. This will enter into force on 1 May 2021.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.