A basic banking service for businesses - important update

This is important for businesses that face difficulties in obtaining and maintaining a bank account, and is especially applicable to companies or businesses that have gone bankrupt or that operate in certain well-defined sectors such as, for example, the diamond sector or the art trade sector.

1. What does this basic banking service comprise?

The basic banking service includes a current bankaccount combined with a payment instrument that allows the following transactions:

• Deposit and withdraw cash and all transactions required to manage the current account;
• Make transfers;
• Make standing payment orders;
• Perform direct debits;
• Make payments using a payment instrument (payment card or similar means of payment).

The prerequisite, however, is that, at all times, there are sufficient funds in the bankaccount. A payment transaction cannot be executed if it results in a negative balance. 

The basic banking service is offered in euro. If the businesses so wishes, it is also possible to obtain the bankaccount in US dollars under certain conditions.

2. Which businesses can apply for a basic banking service?

Any business, which has a CBE number in Belgium, that has been refused by at least three credit institutions to open at least the payment services provided for in the Economic Law Code (ELC), is entitled, under certain conditions, to a basic banking service. Diplomatic missions also have this right.

The "business" within the meaning of the Economic Law Code (CCC) refers to:

• any individual who independently exercises a professional activity (e.g. a self employed , a manager of a company, an artist);
• any legal person (any company, npo (vzw/asbl or foundation);
• any other unincorporated organisation (e.g. a partnership).

3. Who will provide the basic banking service?

Credit institutions established in Belgium that are considered by the National Bank of Belgium to be systemic important credit institutions must provide the basic banking service. 

The list of these credit institutions is updated annually and published on the website of the National Bank of Belgium.

According to the FPS Economy (FOD Economie – SPF Economie) website, the following six banks are eligible as providers of basic banking services in 2023:

• BNP Paribas Fortis
• KBC Group
• Belfius Bank
• ING Belgium
• Argenta
• Axa Bank Belgium

4. How is the basic banking service provider appointed?

An application to obtain the basic banking service is addressed to the Basic Banking Service Chamber of the FPS Economy, which verifies whether the application is admissible and complete, namely that all required documents are presented.

This application must be made in writing using a form made available on paper or electronically by the credit institution, which has refused an application to open a (basic) banking service. This application form is also available on the website of the FOD/SPF Economie. 

An application is admissible if it contains the following elements:

1. a declaration on honour that the business does not already have a basic banking service or a payment account that allows it to use the basic banking service, either with a credit institution under Belgian law or with a credit institution established in another EU Member State;
2. a confirmation, supported by necessary documentary evidence, that the business (or diplomatic mission) has been refused an application for payment services as stipulated in the ELC at least three times or, if applicable, that it has been informed that its accounts will be closed;
3. delivered a complete application form to the Basic Banking Service Chamber.

The Basic Banking Service Chamber checks whether the credit institution has refused basic payment services for good reason.

The Basic Banking Service Chamber then obtains a confidential opinion from the Financial Intelligence Processing Unit (CTIF-CFI) about the business concerned.

A file is not considered to be complete until the opinion of the Financial Intelligence  Processing Unit is obtained or should this opinion not be obtained after 60 calendar days.  

As soon as the application for a basic banking service is assessed as admissible and complete, the Basic Banking Service Chamber decides on the designation of a basic banking service provider. This decision is notified by registered mail to the applicant business and, if applicable, to the basic banking service provider.

As part of additional risk mitigation measures, the Basic Banking Service Chamber may request the applicant business to provide additional information and documents. However, the Basic Banking Service Chamber does perform a substantive check on this information but passes it on to the basic banking service provider, which verifies the applicant businesses compliance with the conditions.

From the notification, the basic banking service provider has a period of 10 working days to offer the basic banking service to the business. 

This period does not include the investigation to be conducted in the framework of money-laundering legislation or any additional risk-mitigating measures, but even in this case, the applicant for the basic banking service must be notified in writing. 

Moreover, specific additional risk-mitigating measures apply to businesses carrying out specific professional activities defined in money-laundering legislation and to diamond dealers.

5. The provider of the basic banking service may refuse or withdraw the basic banking service.

The basic banking service must be offered by the basic banking service provider to the business concerned only to the extent that:

• the business provides transparency on:
  (a) the magnitude of the use of cash;
  (b) justification of the use of cash and conformity with the company's profile and activity;

• the withdrawal of cash from a payment account is limited to an amount that, taking into account the profile of the business, is strictly necessary to cover current payments for daily needs in cash when electronic payment proves impossible;
  
  
• the business always offers its customers the possibility of making an electronic payment;
  
  
• the diamond dealer does not use cash to buy or sell diamonds.

In addition, the basic banking service provider may refuse the basic banking service if at least one of the following conditions is met:

1. The refusal complies with money laundering laws;
2. 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.
3. The business has provided false information in response to questions asked by the credit institution as part of its duty of vigilance under money laundering legislation;
4. The applicant business already has a basic banking service or has opened another payment account with a bank except if it proves that it does not obtain the services necessary for its professional activity with it or has been informed by the other bank that the payment account will be terminated;
5. If the business has itself cancelled its payment accounts with a view to using the basic banking service;

The decision to refuse payment services must be expressly made in writing and with sufficient justification, without delay and at the latest within 10 working days from the receipt of the decision, unless this would be contrary to the objectives of national security or public order, or money laundering legislation. 

In case of refusal, the credit institution must furthermore expressly mention

• the complaint and out-of-court appeal procedures available to the business to contest the decision, and
• the full name, address, telephone number and electronic address of the ombudsman service for financial services and of the competent supervisory board at the FPS Economy. If a business has a dispute with its credit institution, it may be submitted to the ombudsman service, whose decision is binding.

A basic banking service can be terminated in the following cases:

1. A member of the management body or a person entrusted with 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 or the business has misused the payment account under the basic banking service for illegal purposes;
2. No payment transaction has taken place on the relevant payment account for more than twelve consecutive months;
3. Incorrect information has been provided to obtain the basic banking service;
4. The business has already opened another payment account in Belgium or in another EU Member State that allows it to use a banking service;
5. The termination complies with money laundering legislation.

The basic banking service provider must communicate the decision to terminate in writing and free of charge, respecting a notice period of two months except in case the conditions in number 1,3 and 5 hereabove are fulfilled . 

Moreover, this decision must be motivated and justified except where it would be contrary to the objectives of national security or public order or money laundering legislation. 

6. What must the basic banking service provider comply with?

Basic banking service providers must make information about the basic banking service available to businesses free of charge in a clear manner and in a highly visible place, and at least post this information on their website.

This information should cover the following elements:

• the specific features of the basic banking service offered,
• the associated fees and the conditions attached to their use,
• the procedures to be followed to exercise the right to access the basic banking service, and
• the ways to access alternative dispute resolution procedures.

The information should also make it clear that access to a basic banking service is not conditional on the purchase of additional services.  

In addition, the basic banking service provider must take into account the following legal restrictions:

• It may neither explicitly nor implicitly offer or allow credit line opening linked to the basic banking service;
• It may not make access to the basic banking service conditional on the conclusion of an ancillary service agreement;
• A payment transaction carried out within the framework of a basic banking service cannot be executed if it results in an overdraft.

The Basic Banking Service Chamber and the basic banking service provider must also adhere to well-defined rules for storing and processing the personal data of basic banking service applicants.

7. What if disputes arise over the basic banking service?

The decision of the Basic Banking Service Chamber is an administrative decision that can be appealed before the Council of State.

However, an appeal lodged by the basic banking service provider itself before the Council of State against the decision of the Basic Banking Service Chamber has no suspensive effect. As a result, the basic banking service provider is still obliged to provide the basic banking service already despite the appeal except when it explicitly requests the Council of State to suspend the decision and such request is granted by it.  

When a basic banking service applicant encounters problems with a basic banking service provider, a complaint can first be filed with the mediation service of the credit institution in question. 

If no solution was reached within a reasonable time, an appeal can be made with the Financial Services Ombudsman Service. In the event of a dispute, the latter issues an opinion that is binding on the credit institution. This opinion can therefore also annul a decision by the credit institution. This decision is binding on the credit institution and is communicated to both the credit institution and the company concerned.

Contacting the ombudsman service is possible at the following address:

Ombudsman Service for Financial Services, North Gate II, Koning Albert II-laan 8 bus 2, 1000 Brussels, Tel: +32 2 545 77 70, Fax: +32 2 545 77 79, E-mail: ombudsman@ombudsfin.be.

8. Conclusion

The Minister responsible for Economy is in charge of implementing this legislation. 

A ministerial decree appointing the members of the Basic Banking Service Chamber has been published.

In addition, the website of the FPS Economy states that the six banks mentioned above are eligible as basic banking service providers for 2023, and that through a procedure with the Basic Banking Service Chamber of the FPS Economy, a credit institution will be designated as a basic banking service provider.

If you have any questions regarding this matter, please do not hesitate to contact our specialists: +32 (0)2 747 40 07 or info@seeds.law.