Bank of Lithuania
2016-03-14
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The Bank of Lithuania conducted an inspection and identified that three banks operating in the country violated the legal requirements of the European Union (EU) in relation to cross-border payments. These three banks applied higher fees for cross-border transfers...

The Bank of Lithuania conducted an inspection and identified that three banks operating in the country violated the legal requirements of the European Union (EU) in relation to cross-border payments. These three banks applied higher fees for cross-border transfers in Swedish Krona than permitted. Two banks were also found to have violated the requirements for cross-border transfers in Romanian Leu.

During the inspection it was identified that banks charged higher fees for cross-border transfers in the above-named currencies (by EUR 1.45 to EUR 4.34) than for domestic transfers in the respective currencies, despite this being prohibited.  

According to EU legal requirements, banks must charge the same fee for transfers in euro the countries of the European Economic Area (EEA) as for domestic payments. Sweden and Romania have been exercising their right as EU Member States to apply respective terms and conditions to payments in their national currencies; therefore, the aforementioned requirements apply to payments in Swedish Krona and Romanian Leu as well. This means that transfers in these currencies among EEA countries cannot be more expensive than respective domestic transfers in Swedish Krona or Romanian Leu.

The Board of the Bank of Lithuania imposed fines of EUR 4,488 each on two banks for the violations mentioned above and one bank received a warning. Under the Law on Payments, currently the maximum fine for such a violation can amount to EUR 8,688, minimum — EUR 289. When imposing a specific fine, the extenuating or aggravating circumstances laid down in said Law, as well as the nature, duration and scope of the violation are taken into account. In the case of two banks, the whole of the circumstances determined that an average fine, as provided for in this Law, be imposed. In the case of the third bank, a less strict enforcement measure — a warning — was imposed, since the bank itself admitted committing the violation and removed it as early as in mid-2015. Seeking greater correlation between fines for violations in the sphere of payments and the scope of violation and damage for customers, as early as last year the Bank of Lithuania submitted amendments to the Law on Payments, which provide for tighter enforcement measures for potential offenders. Should the provisions submitted by the Bank of Lithuania be approved, fines in the amount of up to 2 per cent of annual income could be imposed on commercial banks and other payment service providers. The Bank of Lithuania’s amendments have been submitted together with the provisions transposing the requirements of the Payment Accounts Directive, favourable to consumers, to Lithuanian law. The amendments to the Law on Payments are expected to be approved by the Seimas during its spring session.

The Law on Payments limits the possibility for the Bank of Lithuania to disclose the names of banks after imposing fines. Following the requirements of existing legal acts, the Bank of Lithuania will publish more detailed information on violations and the names of the banks after 30 days following its resolutions on the application of enforcement measures, if such resolutions are not appealed to the court.

The Bank of Lithuania also constantly monitors the rates of other commercial banks and will take appropriate action should any violations be identified.