2020-12-21
Bank of Lithuania imposed a €150,000 fine for legal infringements
The Bank of Lithuania imposed a fine of €150,000 on the Estonian bank Luminor Bank AS, which operates in Lithuania through its branch, for violations of the Republic of Lithuania Law on Real Estate Related Credit.
The fine was imposed under the decision of the Board of the Bank of Lithuania after the target inspection conducted by its Financial Market Supervision Service, during which it examined selected credit agreements.
It was established that, due to a technical error, the Lithuanian branch of Luminor Bank AS applied a higher penalty (0.2%) than that established in the Republic of Lithuania Law on Real Estate Related Credit (0.05%) to 89 customers from 1 July 2017 to 30 January 2020, thus violating the requirements of this law.
The bank acknowledged this infringement, immediately ceased all activities breaching the legislative requirements, eliminated the established violation and compensated losses to its 89 customers.
Therefore, no enforcement measures were imposed for this violation.
Moreover, from 1 July to 31 December 2019, the bank had not always acted according to the aforementioned law where credit agreements were terminated due to consumers improperly meeting or failing to meet their obligations.
In such cases, the bank did not provide evidence that it had cooperated with borrowers and used all reasonable possibilities by offering potential means to ensure compliance with obligations established in credit agreements.
Until now, no enforcement measures were imposed on Luminor Bank AS for violations of the provisions of the Republic of Lithuania Law on Real Estate Related Credit.
Information on enforcement measures applied by the Bank of Lithuania, complaints regarding the applied enforcement measures, and settlement results is available here.
Bank of Lithuania issues new electronic money institution licence
The Board of the Bank of Lithuania issued an electronic money institution licence authorising to issue electronic money and provide payment services set forth in the Republic of Lithuania Law on Payments to UAB STANHOPE FINANCIAL. The institution will provide services to legal entities (mainly small and medium businesses), offer e-wallets as an alternative to a bank account, enable customers to accept and make domestic and cross-border payments as well as issue payment cards. In its first year of operation, the institution will provide services in Lithuania and then gradually expand its activities to other European Economic Area states. All 100% of this institution’s shares are held by the holding company Stanhope Financial Limited established in Ireland.
UAB STANHOPE FINANCIAL is obliged to provide the Bank of Lithuania with a copy of the agreement concluded with a credit institution, confirming proper implementation of measures for safeguarding customer funds before it starts providing the licensed financial services.