“It is quite clear that there has been overreaction on the part of banks as well — that they are not interested in new long-term clients,” the minister said. “They don’t want to do certain bank transfers, in particular cross-border transfers, and by now this has become a real concern for Estonia’s business environment. What we expect from banks is that their risk recognition and risk analysis mechanisms become smarter. Banks should not be approaching this with the attitude that we’ll throw out clients just in case, or we’ll close accounts just in case.”
According to Estonian Banking Association board chairman Erki Kilu, regulations have tightened in the past couple of years, and banks are currently expected to know every inch of their clients, their partners, final beneficiaries as well as sanctioned individuals. Zero tolerance is in place, and punishments for errors have gotten harsher. As a result of conservatism on banks’ part, some clients have not passed background checks.
“Generally speaking, there have been specific reasons behind these closures,” Kilu said. “Naturally, if a client feels as though they have been treated unjustly, they can contact the bank and this can be reviewed.”
The head of the banking association said that next time it should be specialists involved in verifications at banks that should get together, who could then review denials, which would help better resolve such situations in the future.
Kilu found that if there are enough complaints, then it’s a good idea to summarize them and forward the message to the finance minister, adding that this is one means of providing feedback.
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