A payment account – its establishment and provision – is nowadays an essential part of the services provided by banks and other payment service providers to their customers for the execution of their payment transactions. Given the sensitivity of services related to the handling of financial resources, it may be unpleasant for a client to find out that the bank is taking steps to close his account. This article aims to focus on legal options under which a bank or other financial payment service provider can cancel its client's account.
Legal regulation of payment account
The legal regulation of the payment account can be found in Act No. 370/2017 Coll., on payment systems (hereinafter "ZPS"). A payment account is an account that used to carry out payment transactions (Section 2(1)(b) of the Payment Services Act), which consist of depositing funds into a payment account, withdrawing funds from a payment account or transferring funds and are carried out within the framework of a specific payment service (Section 2(1)(a) of the Payment Services Act) and which are also provided by payment service providers as entrepreneurs who provide these services (Section 1(c) of the Payment Services Act). These providers are to a large extent banks pursuant Act No. 21/1992 Coll., on banks, which we will also focus on in more detail in this article.
The most common way to open a payment account is based on a payment services agreement according to
Section 127 letter a) of the ZPS, for which the ZPS uses the term framework agreement. The use of this term is viewed very negatively in the commentary literature, because the term framework agreement does not correspond to the nature of this agreement. This agreement is not a classic framework agreement, i.e. an agreement on the basis of which other agreements following this framework agreement would be concluded, but on the basis of which specific payment orders for the execution of payment transactions are issued.[1]The general specifics of this contract (and also the practice of banks in general) are: link to another document (most often on business terms and conditions), which is an integral part of this contract and also sets out other rights and obligations of the parties[2].
A special case of a payment account, which was included in the ZPS in connection with European Union legislation, is basic payment account, which was included in Czech legislation in connection with European legislation concerning payment accounts and anchoring of demands citizens of the Member States to open a payment account with banks, provided that the conditions in Section 210 of the ZPS for its establishment are met and a contract for a basic payment account is subsequently concluded[3].
On the possibilities of cancelling a payment account by the bank
After the payment account has been established, a situation may arise where the bank takes action leading to the cancellation of the payment service user's payment account by unilateral action of the bank. Cancellation of a payment account by the bank in relation to the framework agreement can occur mainly in two ways:
- by notice or
- by withdrawing from the contract.
Termination
Termination of the framework agreement occurs according to the legal provisions contained in Section 154, paragraph 1 of the ZPS in the event that the framework agreement was concluded for an indefinite period and if it was termination option agreedIn the event that the termination is enshrined in the framework contract, it must not be notice period of less than 2 months[4]In accordance with Section 154(2) of the Payment Services Act, this notice must be provided to the user in a clear and understandable manner in the official language of the state in which the payment service is offered or in a language agreed upon by the parties.
Cession
The second way of cancelling an account by the bank, or of terminating an obligation in relation to a framework agreement, is to withdraw from the agreement. Withdrawal from the agreement may occur either on the basis of the fulfilment of legal grounds for withdrawal from the agreement (e.g. a material breach of the agreement pursuant to
§ 2002 of the Civil Code) or contractually agreed reasons for withdrawal from the contract[5].
On the possibilities of cancelling a basic payment account by the bank
Certain specifics can also be found in the case of cancellation of a basic payment account, or in the event of termination of an obligation arising under the basic payment account agreement. Even in the case of a basic payment account, the bank (provider) can also terminate or withdraw from the agreement, but only under the conditions set out below.
Termination
The bank may conclude a basic payment account agreement terminate in accordance with Section 215, paragraphs 1 and 2 of the ZPS, if:
- the user does not make any payment transaction through this payment account for a period longer than 24 months,
- the user is not a person legally residing in a Member State,
- the user is the owner of another payment account maintained in the Czech Republic by a bank or a foreign bank operating in the Czech Republic through a branch, through which it is possible to use the services specified in Section 212(1) of the ZPS,
- the user rejects the proposal to change the obligation from the basic payment account agreement without having a justifiable reason for doing so,
- the user materially breaches the basic payment account agreement, or
- if the bank (provider) ceases to be a bank or a foreign bank operating in the Czech Republic through a branch and maintaining payment accounts for consumers.
The obligation under the basic payment account agreement may be terminated (except that the bank ceases to be a bank or a foreign bank operating in the Czech Republic through a branch and maintaining payment accounts for consumers) or the basic payment account agreement may be withdrawn on the grounds that the owner of the basic payment account achieves the establishment of the basic payment account by intentionally providing false or grossly distorted data no later than 3 months from the date on which the provider became aware of it (Section 215(5) of the ZPS).
Cession
Withdraw In this case, the bank (provider) may withdraw from the contract in accordance with Section 215, paragraphs 3 and 4 of the ZPS only if:
- the holder of the basic payment account uses the basic payment account in violation of the law regulating measures against the legalization of proceeds from crime and the financing of terrorism or in violation of another legal regulation,
- achieves the opening of a basic payment account by intentionally providing false or grossly distorted data, or
- if the duration of the obligation under the basic payment account agreement would be in conflict with another legal regulation.
In both cases, the bank (provider) shall, together with the termination of the obligation under the basic payment account contract or with the notice of withdrawal from the basic payment account contract, notify the basic payment account holder in writing: reason for termination or withdrawal from the contract together with information on the method of out-of-court settlement of disputes between the holder of the basic payment account and its provider, information on the possibility for the holder to file a complaint with the supervisory authority and information on the possible possibility of filing a complaint directly with the provider, with the proviso that the bank (provider) will not inform the holder of the basic payment account of the reason for termination or withdrawal if, by communicating the reason, it would violate another legal regulation (Section 215(6) of the ZPS).
záver
Payment accounts are a fundamental tool for the functioning of non-cash payment systems, including common everyday transactions. Given that a large part of the funds of individuals and legal entities are concentrated in these accounts, it is advisable to keep in mind the aspects outlined above that may lead to the cancellation of a payment account.
Insufficient familiarity with both the legal and contractual options for terminating the contract on the basis of which the payment account or basic payment account was established may lead to difficulties with the subsequent management and settlement of funds in this account or other negative legal consequences, including the creation of a new debt to the bank.
Source: Epravo.cz
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Mgr. David Šnajdr, paralegal
[1] BERAN, J., NÝDRLE, T., STRNADEL, D. § 123. Payment System Act: Commentary. [ASPI System]. Wolters Kluwer [cit. 2025-6-20]. ASPI_ID KO370_2017CZ. Available from: www.aspi.cz. ISSN 2336517X.
[2] Ibid.
[3] Ibid., § 210.
[4] Commentary literature describes this provision as unilaterally mandatory, where the contractual arrangement of notice by the bank (provider) may be adjusted in favor of the user if he is a consumer. In the event that the user is not a consumer, it is possible to adjust the contractual arrangement of the user to his detriment in accordance with Section 128, paragraph 6 of the ZPS, including adjusting the length of the notice period - Ibid., Section 154.
[5] Ibid.
