Bank of Lithuania
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Due to gross and systemic breaches of legislative requirements, the Bank of Lithuania revoked the licence of the payment institution Contabilita, UAB. According to the Law, the institution is obliged to cease the provision of payment services and refund its customers.

“The payment institution was engaged in unlicensed activities. The legislation establishes a clear distinction between payment and electronic money institutions as well as full and limited licences. The Bank of Lithuania has published its own position on the matter. However, the institution ignored all legislative requirements and recommendations, thus negatively affecting the entire sector. We view such infringements as a malicious act, which consequently explains our strict decision. We have repeatedly stressed that the Bank of Lithuania is a fintech-conducive regulator, yet we have zero tolerance to non-compliance with legal acts or abuse of our trust,” said Jekaterina Govina, Director of the Supervision Service of the Bank of Lithuania.

In mid-December 2015, the Bank of Lithuania granted Contabilita, UAB a payment institution licence for restricted activity, allowing it to provide money remittance services in Lithuania. In autumn 2019, due to certain concerns that the institution has potentially been offering unlicensed services, the Supervision Service of the Bank of Lithuania asked it to provide detailed information on the services provided. After a thorough examination, the Bank of Lithuania found that since September 2018, Contabilita, UAB has been opening payment accounts that were used to accept funds with no specific payment instructions to send it to a payee or another payment service provider; such funds were held for an indefinite period of time. However, the institution was not entitled to carry out the aforementioned activities. Both European and Lithuanian legislations explicitly define the term ‘money remittance’ as a payment service provided without opening a payment account.

The institution has also been misleading its customers by publicly* stating that it is an electronic money institution, even though it only held a payment institution licence for restricted activity. Being authorised to provide services exclusively in Lithuania, the institution also offered them in other EU Member States.

Such actions violate the Republic of Lithuania Law on Electronic Money and Electronic Money Institutions as well as the Republic of Lithuania Law on Payment Institutions. In order to clarify the situation for market participants, at the end of February 2016, the Bank of Lithuania published its official position, explaining the differences between accounts opened with electronic money and payment institutions, as well as provided information on funds held in payment accounts. An electronic money institution licence entitles its holders to provide a wider range of services compared to a payment institution licence; Contabilita, UAB was authorised to provide only one service referred to in the Republic of Lithuania Law on Payments, namely – money remittances.

Having assessed all circumstances, the Bank of Lithuania decided to revoke the payment institution licence for restricted activity granted to Contabilita, UAB, which means that the institution is no longer entitled to provide payment services, except for cases where it has to settle with existing customers. It must also remove the misleading information about being an electronic money institution, publicly and widely inform its customers on the revocation of its licence and announce how it intends to refund its customers. Until full settlement, Contabilita, UAB will be obliged to regularly inform the Bank of Lithuania on the progress made.

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Information on enforcement measures applied by the Bank of Lithuania, complaints regarding the applied enforcement measures, and settlement results is available here.