UAB PanPay Europe fined for improper safeguarding of client funds
The Supervision Service of the Bank of Lithuania imposed a fine on the electronic money institution UAB PanPay Europe for failing to hold client funds with a credit institution.
According to the Republic of Lithuania Law on Electronic Money and Electronic Money Institutions, an institution, having decided to safeguard client funds by way of segregation, must hold the funds in credit institutions (banks, credit unions) or the central bank of the Republic of Lithuania or another EU Member State, or invest them in secure and liquid low-risk assets. UAB PanPay Europe, however, held a bulk of its customer funds in electronic money and payment institutions registered in other EU Member States, thus breaching legislative requirements. Therefore the Bank of Lithuania imposed on the institution a €16,800 fine. UAB PanPay Europe already complies with legal requirements, transferring client funds to institutions specified by law.
The Supervision Service has also found that the institution provided the Bank of Lithuania with incorrect information on the balance of its customer funds held with credit, payment and electronic money institutions as at the end of the third and fourth quarters of 2018 and the first quarter of 2019. Inconsistencies were remedied in its supervisory report submitted at the end of June.