Bank of Lithuania
2013-09-24
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AB SEB bank was ordered to eliminate deficiencies identified during the inspection; the results of the supervisory review and evaluation process were introducedThe Board of the Bank of Lithuania discussed the results of the inspection of AB SEB bank

During the inspection the Bank of Lithuania’s Supervision Service examined the management and internal control of SEB bank, credit and operational risk management. According to the practice in effect since last year, compliance with money laundering and terrorist financing prevention regulating legislation was verified together with the Financial Crime Investigation Service under the Ministry of the Interior.

For AB SEB bank it was offered to assess the efficiency of the bank’s structure’s changes; also, notes regarding organisation of the bank’s stress testing were provided, as well as notes on the lack of attention paid to credit risk assessment and capital requirement calculation using internal models, etc.

The Board of the Bank of Lithuania instructed AB SEB bank to remove all deficiencies found during the inspection by 1 March 2014. The head of administration at AB SEB bank was instructed to visit the Supervision Service of the Bank of Lithuania until the term indicated and explain how the bank eliminated the deficiencies established during the inspection.

The Board of the Bank of Lithuania was also introduced to the results of the 2013 Supervisory Review and Evaluation Process of the bank. During the Supervisory Review and Evaluation Process, the bank’s financial situation, bank risks and their management, the bank’s capital adequacy and resilience to potential losses were assessed. Since AB SEB bank belongs to Sweden’s SEB Group, during the inspection and assessment process the Bank of Lithuania worked closely with the supervisory authorities that control SEB Group. Based on the results of the supervisory inspection and assessment, in the near future, along with the supervisory authorities of other countries where the SEB Group operates, a joint decision will be made on the capital adequacy of SEB bank. According to data from 1 July 2013, AB SEB bank, with a large margin, complied with the capital adequacy ratio: SEB bank’s capital adequacy ratio was 13.9 per cent, while the bank financial group’s — 15.8 per cent (the minimum requirement is 8%).

The deficiencies found during the inspection of AB Citadele bank are critically assessed; the results of the bank’s supervisory review and evaluation process are introduced

The Board of the Bank of Lithuania discussed the results of the inspection of AB Citadele bank.

During the inspection the Bank of Lithuania’s Supervision Service examined the management of the Bank, liquidity and market risk management. Compliance with money laundering and terrorist financing prevention regulating legislation was traditionally verified together with the Financial Crime Investigation Service under the Ministry of the Interior.

The Board of the Bank of Lithuania critically assessed the activities of AB Citadele bankas due to the operational deficiencies in the field of money laundering and terrorist financing prevention. During the inspection of AB Citadele bank, the Bank of Lithuania’s Supervision Service found that the bank’s internal control procedures do not in all cases provide adequate customer identification and proper monitoring of cash transactions. It should be noted that AB Citadele bank took immediate steps to remedy the deficiencies identified during the inspection, and most of them have been removed.

The still uncorrected performance deficiencies found during inspection at AB Citadele bank must be removed by 1 March 2014. The Head of the Administration of AB Citadele, by the term indicated, must inform the Bank of Lithuania’s Supervision Service on the rectification process.

The Board of the Bank of Lithuania was also introduced to the results of the 2013 Supervisory Review and Evaluation Process of the bank. During the Supervisory Review and Evaluation Process, the bank’s financial situation, bank risks and their management, the bank’s capital adequacy and resilience to potential losses were assessed. During the inspection and assessment process the Bank of Lithuania worked closely with the Republic of Latvia’s Financial and Capital Market Commission, which supervises the Citadele Group. Based on the results of the Supervisory Review and Evaluation Process, along with the Republic of Latvia’s Financial and Capital Market Commission, a joint decision on Citadele Group’s capital adequacy was made — the bank group is sufficiently capitalized taking into account the assumed risk. On 1 July 2013 AB Citadele bank’s capital adequacy ratio was 23.3; the bank’s financial group’s — 21.7 per cent (the minimum requirement is 8%).

The Vladas Jurgutis scholarship was awarded

The Board of the Bank of Lithuania decided to award the Vladas Jurgutis scholarships to Vaida Kairytė, a fourth-year Bachelor degree student in Finance and Accounting at ISM University of Management and Economics and Gediminas Startas, a second-year graduate student in the Finance program of the Faculty of Economics at Kaunas University of Technology. The scholarships were awarded for the period from 1 September 2013 to 1 July 2014.

Contenders for the Vladas Jurgutis scholarship were made up of students from Vilnius ISM University of Management and Economics, Vytautas Magnus University and Kaunas University of Technology. The nominees for the Vladas Jurgutis scholarship were selected by a committee formed under orders from the Chairman of the Board of the Bank of Lithuania, and the committee assessed the recommendations received from the universities and submitted proposals regarding who should be awarded the scholarship.

The Vladas Jurgutis Scholarship was established in 1990. It is awarded for one academic year to two full-time students in banking and finance at universities of the Republic of Lithuania. Candidates for the scholarship are nominated by university faculties that have banking and finance departments. Decisions on awarding the scholarship are made by the Board of the Bank of Lithuania. The scholarship amounts to the minimum monthly wage.

Commission for Granting Vladas Jurgutis Award renewed

The Board of the Bank of Lithuania approved a new composition for the Commission for Granting the Vladas Jurgutis Award. It will comprise seven people, including Doctor Habilitatus Antanas Buračas, full member of the Lithuanian Academy of Sciences; Professor Doctor Habilitatus Jonas Čičinskas, professor at the Department of European Studies of the Vilnius University Institute of International Relations and Political Science; Dr Marius Jurgilas — a member of the Board of the Bank of Lithuania; Doctor Habilitatus Zigmas Lydeka, Rector of Vytautas Magnus University, professor at the Department of Economics; Associate Professor Doctor Stasys Kropas, President of the Association of Lithuanian Banks; Dr Raimondas Kuodis, Deputy Chairman of the Board of the Bank of Lithuania; Professor Doctor Habilitatus Aleksandras Vasiliauskas, full Member-Correspondent of the Lithuanian Academy of Sciences.

The Vladas Jurgutis Award was established by the Board of the Bank of Lithuania, emphasising the importance of central banking and wishing to perpetuate the merits of the first Governor of the Bank of Lithuania — Vladas Jurgutis — to banking in Lithuania. The award is granted once a year for significant scientific works in the last five years (books prepared for publishing or published, monographs, published scientific papers, research and its results; Doctor, Doctor Habilitatus dissertations completed) in the fields of banking in Lithuania, finance, money and macroeconomics. The amount of the award is 50,000 litas. The Bank of Lithuania and the Lithuanian Academy of Sciences, following the cooperation agreement between the Bank of Lithuania and the Lithuanian Academy of Sciences, cooperate in granting this award.

According to the provisions of the granting of the Vladas Jurgutis Award, the composition of the Commission, after consulting with the Lithuanian Academy of Science, is approved by the Board of the Bank of Lithuania. The term of office of members of the Commission is three years. The number of members’ terms of office is unlimited. The Commission must comprise at least five members. Members of the Commission can be employees of the Bank of Lithuania, representatives of the Lithuanian Academy of Sciences and of other institutions.

Procedure for the Sale of Numismatic Items of the Bank of Lithuania amended

The Bank of Lithuania provides more possibilities for residents and collectors abroad to acquire, via distribution channels available to them, collector (commemorative) litas coins and collector (commemorative) coins in a numismatic package issued by the Bank of Lithuania.

The amended Procedure for the Sale of Numismatic Items of the Bank of Lithuania stipulates that one buyer will be able to order in advance no more than two collector (commemorative) and/or collector (commemorative) circulation coins struck from precious metals and no more than five coins struck from non-precious metals in a numismatic package.

One will be able to order in advance no more than two sets of collector (commemorative) circulation coins, no more than two numismatic sets of circulation coins, no more than one set of collector (commemorative) coins, no more than forty pieces of collector (commemorative) circulation coins without a numismatic package, i.e. one roll.

At the cash offices of the Bank of Lithuania, in the first two days when a numismatic item is being issued into circulation or its sale begins, during one transaction, for one buyer, a similar amount of numismatic items to that established for a pre-order will be sold, except for collector (commemorative) circulation coins without a numismatic package: these will be available to one buyer in the amount of no more than 10 pieces at a time.

Part of the mintage of collector (commemorative) coins without a numismatic package will also appear in circulation via commercial banks operating in Lithuania.

For those willing, the Bank of Lithuania will go on sending numismatic items via providers of postal services.

Two amounts established in the Law on Insurance Indexed

The Board of the Bank of Lithuania approved new indexed amounts of mandatory professional indemnity insurance for an insurance intermediary and of the equity capital of an insurance brokerage firm. The minimum values of those amounts are specified in the Law on Insurance, and they shall be indexed by the supervisory authority, taking into account the European Consumer Price Index which is announced by Eurostat (Statistical Office of the European Union).

The indexed minimum amount of mandatory professional indemnity insurance for an insurance intermediary, in Article 162(3) and Article 184(1) denominated in euro, as of the beginning of next year is established as EUR 1,241.486 for one insured event and EUR 1,875.927 for all insured events per year. 

The indexed minimum equity capital of an insurance brokerage firm, in Article 162(2) of the Law on Insurance denominated in euro, as of the beginning of next year, shall be no less than EUR 18,760.