- Question ID
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2015_2461
- Legal act
- Regulation (EU) No 575/2013 (CRR)
- Topic
- Liquidity risk
- Article
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411
- COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
- Delegated Regulation (EU) 2015/61 - DR with regard to liquidity coverage requirement
- Article/Paragraph
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24(2)(a)
- Type of submitter
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Credit institution
- Subject matter
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Definition of Active Contractual Relationship
- Question
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What is the definition of an Active Contractual Relationship?
- Background on the question
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Article 24(2)(a) of the Commission Delegated Regulation (EU) 2015/61 states that “For the purpose of paragraph 1(a) a retail deposit shall be considered to be part of an established relationship where the depositor meets at least one of the following criteria: (a) has an active contractual relationship with the credit institution of at least 12 months duration”. In terms of the identification of an ‘established relationship’ it is not entirely clear what might be meant by an ‘active contractual relationship’ or what might constitute a ‘minimum duration’ or ‘active products’. Further analysis and guidance in these areas would be useful. In particular, it is not clear whether the EBA is referring to the tenure of an existing customer relationship (i.e. how long the bank has had a relationship with a particular customer) or the contractual duration of a product. Moreover, we do not believe that duration is an indicator of stability, particularly in relation to retail customers who change their banking service providers’ infrequently, and we would support the view that ‘active’ means ‘not dormant’. Example 1: We would not consider a current account to be active if it had been opened various months ago and has not produce movements during the last month. Example 2: We would not consider a customer with 3 term deposits and no other products to have an active relationship.
- Submission date
- Final publishing date
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- Final answer
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Only the ECJ can give a definitive interpretation of EU law. In the absence of a formal definition under EU law and a definitive interpretation by the ECJ, the meaning of active contractual relationship has to be determined by regard to the context as well as existing prudential regulation, supervisory practice and jurisprudence. DISCLAIMER This question goes beyond matters of consistent and effective application of the regulatory framework. A Directorate General of the Commission (Directorate General for Financial Stability, Financial services and Capital Markets Union) has prepared the answer, albeit that only the Court of Justice of the European Union can provide definitive interpretations of EU legislation. This is an unofficial opinion of that Directorate General, which the European Banking Authority publishes on its behalf. The answers are not binding on the European Commission as an institution. You should be aware that the European Commission could adopt a position different from the one expressed in such Q&As, for instance in infringement proceedings or after a detailed examination of a specific case or on the basis of any new legal or factual elements that may have been brought to its attention.
- Status
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Final Q&A
- Answer prepared by
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Answer prepared by the European Commission because it is a matter of interpretation of Union law.
- Note to Q&A
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Update 26.03.2021: This Q&A has not yet been reviewed by the European Commission in the light of the changes introduced to Regulation (EU) No 575/2013 (CRR).
Disclaimer
The Q&A refers to the provisions in force on the day of their publication. The EBA does not systematically review published Q&As following the amendment of legislative acts. Users of the Q&A tool should therefore check the date of publication of the Q&A and whether the provisions referred to in the answer remain the same.