2005-01-13
1. On Thursday, the Board of the Bank of Lithuania issued permission to the citizen of the Republic of Lithuania Vladimir Romanov for the acquisition of the qualified holding of the authorised capital and/or voting rights of AB Ukio bankas so that his holding of the authorised capital and/or voting rights comprises 1/5 of the authorised capital and/or voting rights.
On 8 November last year, the Bank of Lithuania received the application of Vladimir Romanov requesting for the permission for the acquisition and holding of 1/5 to 1/3 of ordinary shares of AB Ukio bankas.
According to the Law on Banks, a person wishing to acquire the qualified holding (10 per cent and more) of the authorised capital and/or voting rights of a bank or to increase it so that it holds 1/5, 1/3 or ½ of the authorised capital or the bank becomes controlled by the said person must obtain an advance permission of the supervisory authority.Permission for the acquisition of 1/5 of the authorised capital and/or voting rights grants the person the right to increase the block of shares up to 33 per cent, i.e. up to the next step (1/3) established by the law.In order to exceed this limit a new permission by the supervisory authority would be required.
Currently, the authorised capital of Ukio bankas is LTL 106.7 million; it is divided into 8 892 333 ordinary shares with the nominal value of LTL 12.According to the report of Ukio bankas to the Bank of Lithuania, last year Vladimir Romanov acquired 9.9 per cent (889 220 units) of ordinary shares of Ukio bankas.
2. Due to the growth of foreign reserves of the Bank of Lithuania, the Board of the Bank of Lithuania amended the initial size of the investment portfolio: it was set at EUR 1700 million on Thursday.This resolution shall enter into force on 14 January 2005.
Up to now, the initial size of the investment portfolio amounted to EUR 1300 million.
The foreign reserves held by the Bank of Lithuania are divided into two portfolios: the investment portfolio and the liquidity portfolio.The funds of the former are used for long-term investment, while the funds of the latter are used for liquidity needs.
3. The Board of the Bank of Lithuania decided to destroy in accordance with the established procedure 500 litas and 1000 litas banknotes of 1991 issue and 100 litas banknotes of 1994 issue, which were not declared legal tender and issued into circulation. It was resolved to retain 20 thousand units of each banknote denomination for numismatic needs.
500 litas and 1000 litas banknotes of 1991 issue did not comply with security requirements applied to the banknotes of this denomination and were not in use, however, they were kept in the vaults of the Bank of Lithuania up to now.
100 litas banknotes of 1994 issue were not issued into circulation, since the amount of these banknotes produced was too small to replace all defective banknotes of the same denomination of 1991 issue.
In 1997, the Bank of Lithuania brought an action to the Paris Arbitration Chamber against the US company that produced the banknotes regarding the low quality of 100 litas, 500 litas and 1000 litas banknotes of 1991 issue requesting the recovery of damages caused and the payment of indemnity.The hearing of the case in the Paris Arbitration Chamber and the US bankruptcy and district courts ended at the end of November 2004 and the decisions favourable to the Bank of Lithuania were taken. The damages related to the poorly printed banknotes with the denomination of 100 litas, 500 litas and 1000 litas were indemnified to the Bank of Lithuania.
As from 1 July 2001, poor quality banknotes of 1991 issue with the denomination of 100 litas are not recognised legal tender. They are exchanged at the cash offices of the Bank of Lithuania in Vilnius, Kaunas and Klaipėda.
The Board of the Bank of Lithuania approved the Code of Ethics for the staff of the Bank of Lithuania.It establishes the principles of activity and conduct and the standards of professional ethics to be followed by the persons employed at the Bank of Lithuania in performance of their professional duties and out of working hours.
The employees of the Bank of Lithuania must be loyal, behave independently, honestly, objectively, reasonably, unselfishly, follow high standards of professional ethics and avoid situations that might result in a conflict of interests.The staff of the Bank of Lithuania must also treat other persons equally and avoid any form of discrimination (racial, national, sexual or based on age, physical disability, political views, philosophical outlook or religious beliefs).
The Code of Ethics for the staff of the Bank of Lithuania requires the persons employed at the central bank to utilise their abilities in performance of the duties assigned to them diligently, effectively and fully and to support and increase public confidence in the Bank of Lithuania.
The Code was drawn up on the basis of the Constitution of the Republic of Lithuania, the Law on Public Administration, the Labour Code, the Law on Adjustment of Public and Private Interests in the Public Service, the Law on the Bank of Lithuania, the Code of Conduct of the European Central Bank (ECB), other legal acts and the practice of central banks of foreign countries.
4. The Board of the Bank of Lithuania heard out the information on the results of eleven inspections of credit unions that took place in the fourth quarter of the last year.
Full inspections were conducted in eight credit unions:Ukmerge farmers’, “Zemdirbio parama” (Vilkaviskis), Kauno Technologijos Universiteto, Taurages, Vilniaus regional, “Kupiskenu taupa”, Utenos and “Sveikatos kreditas” (Vilnius).Compliance of these credit unions with the Law on Credit Unions and other legal acts and their statutes and the elimination of shortcomings pointed out in the reports of earlier inspections were examined.The operation and financial situation of management bodies of credit unions were analysed.
It was established that, at the time of inspection, all credit unions complied with the prudential requirements of the Bank of Lithuania.During inspections shortcomings of the operation of credit unions were ascertained, which will have to be eliminated over the set terms.
In the fourth quarter last year target inspections were conducted in three credit unions: “Germanto lobis“, Pakruojis farmers’ and Kretingos.The elimination of shortcomings ascertained during earlier inspections by these credit unions was examined.
Heads of four credit unions were invited to the Credit Institutions Supervision Department of the Bank of Lithuania for conversation about the causes of shortcomings and violations ascertained during inspections and the ways of their elimination.The conversations were held with the heads of Prienų credit union (inspection was conducted in the third quarter of 2004), Kauno Technologijos Universiteto credit union, credit union “Zemdirbio parama“ and credit union “Germanto lobis“.
Currently, 61 credit unions and the Central Credit Union of Lithuania are operating in Lithuania.