2005-04-01
1. On March 31 the Board of the Bank of Lithuania discussed the Draft Law of the Republic of Lithuania on the Adoption of the Euro in the Republic of Lithuania prepared by the experts of the Bank. The Board agreed that the draft should be forwarded to the Ministries of Justice, Finance, Economy and other interested institutions and organisations for coordination.
The purpose of the law, as stated in the draft, is to establish the procedures on the preparation to adopt the euro, arrangements for the cash changeover and withdrawal of the litas from circulation. The act also has to ensure implementation of European Union legal acts that will be listed in the annex to the law.
The draft establishes the procedure for the litas exchange into the euro from the date of the adoption of the euro, the application of the exchange rate, the rounding of intermediate and final recalculation results; it also specifies how balances in bank accounts should be converted and nominal values of debt securities redenominated in the euro. It establishes how the references to the litas and the interest rate index VILIBOR in legal acts and agreements should be interpreted upon the adoption of the euro.
The draft also lays down the requirements concerning dual display of prices in the euro and in the litas for a certain period of time.
It is proposed that the Bank of Lithuania should exchange the litas into the euro for an unlimited period in unlimited amounts. Commercial banks would exchange the currency free of charge for six months following the introduction of the euro. After the expiry of this period, the exchange of the currency will continue for a fee.
It is provided that for the changeover and conversion of the litas to the euro and vice versa the irrevocable fixed conversion rate of the litas and the euro will be used. This exchange rate should be unanimously set by the Council of the European Union when adopting a decision on the introduction of the euro in Lithuania.
Under the draft law, fees, commissions and other amounts expressed in litas (euro) that are not final payable amounts should be converted to the euro (litas) at the rate with four digits following the decimal point, unless more precise principles of expression are used in established practices. The converted amounts would be considered intermediate amounts and would be rounded up to two decimal positions while calculating the final payable amount. The rounding will be based on the mathematical rounding rules: if the number following the last digit is 5 or more, 1 is added to the last digit, and if it is less, the last digit remains unchanged.
Deposits and other balances on client accounts as well as loans will be converted free of charge on the date of the adoption of the euro.
It is proposed that upon the adoption of the euro all references to the litas in legal acts, agreements and other documents should be regarded as references to the euro. The amounts in litas will be considered as expressed in euro and will be converted free of charge under the same arrangements as mentioned above.
The nominal value of all Government securities denominated in litas will be converted by each particular investor on the basis of each security issue identification code by dividing the total nominal value of held securities by the conversion rate, multiplying it by 100 and rounding to the last whole number. The resulting amount would represent the nominal value of held securities in euro cents.
The draft proposes that persons engaged in the sale of goods (services) will have to introduce the dual display of prices of goods (services) at least within 30 calendar days after the irrevocable conversion rate of the litas and the euro is set and should continue until the date of the adoption of the euro and for two months after this date.
The draft provides that the litas should continue to be accepted as legal tender for 15 calendar days after the date of the adoption of the euro.
The draft law does not specify the precise date of the adoption of the euro in Lithuania as this date will be set and announced by the Council of the European Union, having assessed the compliance of the Republic of Lithuania with the conditions necessary for the adoption of the euro and abolishing the country’s derogation introduced while joining the EU allowing temporary use of the litas until the adoption of the single currency of the EU.
The Draft Law of the Republic of Lithuania on the Adoption of the Euro will be presented to public institutions, business and consumer protection as well as other interested institutions and organisations for consideration, comments and suggestions. The draft will also be published on the Bank of Lithuania website.
2. The Board gave permission to the bank NORD/LB Lietuva to include the EUR 2.5 million (equivalent to LTL 8.6 million) subordinated ten-year loan received from the fund Stiftung der NORD/LB und der Öffentlichen Versicherung für Braunschweig established by the German parent bank Norddeursche Landesbank Girozentrale into tier two capital.e parentpublished on on nd dsuhe litas until the adopotan Union, haveindays after the date of the adoption of the eu
According to Nord/LB Lietuva, the addition interest expenses arising from the subordinated loan will not have any negative consequences to the financial standing of the bank, while the higher capital base will provide opportunities to increase its assets, expand banking activities and ensure compliance with prudential requirements.
3. The Board authorised Vilniaus bankas to register amendments to its Statutes approved at the extraordinary shareholders meeting held on 15 March 2005 in relation to the change of the Bank’s name, rights granted by shares, competence of the bodies of the Bank and changed procedures for the election and revocation of members of such bodies.
The licence issued under Resolution No. 24 of 29 November 1990 of the Board of the Bank of Lithuania was replaced with a new licence indicating the new name of the Bank: AB SEB Vilniaus bankas.
The part of the resolution relating to the licence with a new name will come into effect as from the date of registering the amended statutes in the register of legal entities.
4. The Board authorised VB Mortgage Bank to register amendments to its Statutes approved its sole shareholder AB Vilniaus bankas on 15 March 2005 in relation to the change of the Bank’s name, rights granted by shares, competence of the bodies of the Bank and changed procedures for the election and revocation of members of such bodies.
The licence issued under Resolution No. 55 of 25 April 2002 of the Board of the Bank of Lithuania was replaced with a new licence indicating the new name of the Bank: AB SEB VB būsto bankas (mortgage bank).
The part of the resolution relating to the licence with a new name will come into effect as from the date of registering the amended statutes in the register of legal entities.