Number of localities with cash withdrawal facilities set to double under Memorandum signed by the Bank of Lithuania and market participants
After the Bank of Lithuania’s initiated dialogue between financial market participants, seven financial and credit institutions have undertaken to double the number of localities with cash withdrawal facilities within one year. With ATMs currently up and running in 91 localities, access to cash withdrawal points within a year should be ensured in at least 191 residential areas under the Memorandum of Understanding for Ensuring Access to Cash in Lithuania signed by Swedbank, AB, AB SEB bankas, Luminor Bank AS Lithuanian branch, AB Šiaulių bankas, the Lithuanian branch of AS Citadele banka, Revolut Payments, UAB and the Lithuanian Central Credit Union, as well as the Bank of Lithuania and the Association of Lithuanian Banks.
“Despite the gradual decline in its use, cash still remains an important means of payment at the country’s points of sale and between natural persons. Therefore, we have taken leadership to mobilise financial market participants and agreed on this Memorandum in order to ensure sufficient access to cash for all residents,” said Gediminas Šimkus, Chairman of the Board of the Bank of Lithuania.
“This Memorandum is a perfect sign of unity and solidarity of the financial community and an example of close cooperation with the Bank of Lithuania. In our view, a voluntary agreement is an alternative that conforms to international practice and is healthier for competitive environment, compared to previous proposals to legally bind certain financial market participants to take up this function,” said Dr Eivilė Čipkutė, President of the Association of Lithuanian Banks.
Having signed the Memorandum, financial market participants committed themselves to ensure, within one year (by 1 July 2022), availability of at least one cash withdrawal point (ATM or equivalent access point) within 10 kilometres from the declared place of residence for at least 90% of Lithuania’s population, or within 20 kilometres for 99% of population.
The expansion of the network of cash access points will be concentrated in localities with population of up to 4,000. Access to cash will be ensured by means of ATMs or alternative cash service points (e.g. cash withdrawal services provided by bank partners at points of sale), given that the conditions put in place for such cash withdrawal services are equivalent to those applied to ATMs. Localities with population of more than 2,000 and no cash withdrawal points available within 10 kilometres will have an ATM installed. ATMs should be set up in at least 50 new localities, with other solutions possible in other residential areas.
Moreover, the conditions of residents’ access to cash will be improved:
- sufficient supply of cash will have to be ensured at cash withdrawal points, including both large and small denomination (€10, €20 or €50) banknotes;
- access to cash withdrawal services will be provided for at least 12 hours a day between 6 a.m. and midnight or, if an access point is located indoors, during the opening hours.
The Association of Lithuanian Banks has already taken steps to implement the Memorandum and launched a selection procedure to build a team of independent experts to develop a model for the implementation of the Memorandum, which would be unbiased, comprehensible and compliant with competition laws. The experts will help establish fair and balanced ways for the Memorandum participants to fulfil its criteria.
The Bank of Lithuania will be notified of any significant changes in the network of cash access points. Moreover, the central bank will monitor compliance with the commitments assumed under this Memorandum and will consult banks on practical implementation of its provisions. In addition, the Bank of Lithuania will publish a map of cash withdrawal points on its website. It will also issue an annual review on access to cash in Lithuania.
According to the Bank of Lithuania, on 9 June 2021, 1,044 ATMs of banks operating in Lithuania functioned in the country and were available within 5 kilometres for 73% of population and within 10 kilometres for 82% of residents.
One of the key functions of the Eurosystem – the European Central Bank and the euro area’s national central banks – is to ensure the smooth supply of cash and facilitate the use of cash in payments by people.