The regulation on minimum requirements signed by the Governor of Eesti Pank requires the four largest banks operating in Estonia to draw up plans for restoring cash circulation and payment services. The minimum requirements foresee that in the event of an interruption, at least 70 percent of the ordinary volume of services should be restored within 12 hours, reported Eesti Pank.
Under the Emergency Act, Eesti Pank names the providers of vital cash circulation and payment services in Estonia and sets the minimum requirements that their plans for the restoration of services must meet. The Financial Supervision Authority will supervise the fulfilment of the requirements
Eesti Pank's aim in setting the minimum requirements is to reduce the possible impact on society of an emergency. The commercial banks should draw up restoration plans to achieve this, explaining how they will reinstate important banking services in a breakdown so that it would help society function as normal.
In this context the central bank identified as providers of vital services the four largest banks operating in Estonia: SEB, Swedbank, and the Estonian subsidiaries of Danske and Nordea.
The Eesti Pank regulation demands that these four large commercial banks should draw up plans for restoring cash circulation and payment services on the principle that following an interruption, at least 70% of the ordinary volume of services should be restored within 12 hours. The commercial banks have been given the freedom to decide how they will restore the services.
They should also double up the data communication connections of the information systems they use for vital services with communications services providers, and the electricity supply connection. They should also have an autonomous electricity supply system in reserve.
If the information systems used to ensure the functioning of vital services are located in a foreign country, then the commercial banks must explain how they would ensure the functioning of the vital services using alternative ways and means.
Eesti Pank does not believe that requiring the commercial banks to ensure the functioning of key banking services will lead to major changes, as the ability of the commercial banks to do so generally meets or surpasses the minimum requirements already.
Commercial banks are able to restore vital banking services as long as critical basic services like electricity and communications are available. In the past three years there have been a total of 42 interruptions to banking services that have lasted over one hour. Interruptions to the electricity supply or communications caused 15 of these, 15 of them were caused by the commercial banks, and the remainder happened for other reasons.
The regulation did not only set the minimum requirements for the restoration plan, it also gave Eesti Pank's recommendations to the commercial banks on how to draw up risk analysis and plans for the functioning of vital services.
The regulation of the Governor of Eesti Pank will come into force three days after it is published in the Riigi Teataja.