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The Bank of Lithuania urges electronic money and payment institutions (EMIs/PIs) to adhere to the established laws and capital requirements or face the consequence of having their infringements made public as part of their enforcement measures.
Rūta Merkevičiūtė
“Capital requirements, along with the prevention of money laundering and safeguarding of customer funds, are the key areas that fall under our supervision. Unfortunately, some EMIs and PIs pay too little attention to this particular aspect, which is in fact an important indicator of their financial state. However, after having received a warning, they tend to quickly resolve all capital adequacy issues and accumulate the necessary buffers,”
said Rūta Merkevičiūtė, Head of the Electronic Money and Payment Institutions Supervision Division at Bank of Lithuania.
The Supervision Service of the Bank of Lithuania has established that, three EMIs – Guru Pay, PHOENIX PAYMENTS, Transactive Systems – and one PI – DSBC Financial Europe – failed to meet the applicable capital requirements (lacking from €4,000 to €77,000).
This violated the Republic of Lithuania Law on Electronic Money and Electronic Money Institutions as well as the Law on Payment Institutions.
These institutions have already eliminated the indicated shortcomings and took measures to prevent any reoccurrence in the future. It was also established that no customer interests were violated.
In view of the above, the Bank of Lithuania decided to impose a mild enforcement measure by making these infringements public. Moreover, Transactive systems violated the requirements set out in the Republic of Lithuania Law on Financial Institutions, i.e. failed to timely approve by the decision of the general meeting of shareholders the set of audited annual financial statements and make a decision on profit distribution.
Therefore, the Supervision Service of the bank imposed an additional enforcement measure where the institution was warned and obliged to approve the set of annual financial statements, make a decision on profit distribution and submit them by 31 August 2020.
Following the Republic of Lithuania Law on Electronic Money and Electronic Money Institutions, an EMI must hold a minimum equity capital of not less than €350,000, while in case of PIs, the law stipulates that the amount depends on the provided services and may vary from €20,000 to €125,000.
