The Bank of Lithuania is taking significant steps to make the country’s financial market more competitive by reducing administrative burdens and aligning national supervision with practices in other EU countries. The goal is to maintain robust oversight while ensuring that regulation remains proportionate, flexible, and innovation-friendly.
A Risk-Based Approach to Supervision
In line with its supervisory policy, the Bank of Lithuania applies a risk-based supervision principle, focusing resources where risks are highest and easing requirements in lower-risk areas. This approach supports the development of a more attractive and dynamic financial environment, particularly for fintech and other innovative sectors. Below we briefly review and present the most important regulatory changes.
Key Legal and Regulatory Updates
- Simplified AML/CTF Requirements
Amendments to the Law on the Prevention of Money Laundering and Terrorist Financing, which came into force in July, mark one of the most notable changes. The new rules allow financial institutions to apply simplified customer due diligence (CDD) measures for lower-risk clients and transactions.
This flexibility is especially relevant for fintechs, life insurance, and pension companies, which often work with clients posing minimal AML/CTF risk. The amendments also streamline the use of document validation certificates and enable institutions to rely on trusted public data registers, making compliance more efficient and cost-effective.
- Updated Supervisory Exemptions
The Board of the Bank of Lithuania has updated its resolution on how supervisory authorities apply EU banking sector exemptions. This enables the regulator to impose stricter oversight on higher-risk credit institutions while relaxing requirements for lower-risk ones-ensuring proportionality across the system.
- Simplified Licensing and Documentation
The Bank has also modernised the General Regulations on Authorisation Procedures, cutting red tape for applicants. Financial institutions no longer need to submit legalised or apostille-certified foreign documents in every case-only when authenticity must be verified.
Moreover, licensing and related processes are now fully digital, with all documents submitted via the administrative and public e-services portal, and document copy certification has been simplified.
Ongoing Dialogue and Market Involvement
Earlier this year, the Bank of Lithuania invited market participants to provide feedback on national regulation and suggest improvements compared with other EU jurisdictions. Based on this input, several changes have already been introduced, including:
- Extended reporting deadlines for credit unions;
- Proposals to simplify powers of attorney in financial transactions;
- A review of inspection procedures and collective investment regulation;
- Further simplification of licensing-related processes.
This collaborative approach signals the regulator’s openness to constructive dialogue and its commitment to continuous improvement.
Ecovis ProventusLaw is ready to assist companies in interpreting and implementing these changes, ensuring compliance with the latest supervisory standards while optimising operations in a competitive, evolving market. Do not hesitate to contact us.
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