Specialised bank – new type of financial institution in lithuania

In order to attract more financial institutions and Fintech start-ups, Lithuania introduces a new type of payment service provider – so called “specialised bank”. This amendment will come into force on January the 1st 2017.

“Such type of financial service provider will be especially attractive to Fintech companies, because it covers both – e-money and payment institution licences”, – says Inga Karulaityte-Kvainauskiene, Attorney-at-law in ECOVIS ProventusLaw (Lithuania).

As other financial service providers, specialised banks will be able to offer following financial services:

– Lending;
– Payment services;
– Receipt of deposits;
– Currency exchange;
– Issuing of e-money;
– Issuing guarantees;
– Fund administration;
– Financial leasing;
– Financial intermediation;
– Creditworthiness assessment services;
– Safe-deposit box rental.

Specialised banks will not be able to provide investment services or manage investment, pension funds or be active by providing other services related to security emissions. Such services will be a prerogative of full service banks.

It is important to note that initial capital for the specialised bank must be not less than 1 million Euro, as for full service bank – 5 million Euro. Other requirements relating the management, level of prudential requirements and reporting, assessment period are the same as for full service banks.

The Bank of Lithuania is granting a license for a specialised bank within a period of 6 months (can be extended to 12 months) after submission of all required documents. For electronic money institutions and payment institutions, this period takes up to 3 months.

Bank of Lithuania is also flexible regarding questions related to the documentation required from specialized bank, payment and electronic money institutions. The Bank of Lithuania accepts all the documentation, that is required in order to acquire a licence, in English.

Starting from 1st December 2016 there is no need of face-to-face identification of the clients of FinTechs – currently only e-signature is needed and in the nearest future video or photo in real time identification is foreseen.

The Bank of Lithuania accepts all the documentation, that is required in order to acquire a licence, in English.

Once issued the specialised bank license will be valid across all EEA. The licenced specialised bank will be able to provide authorised financial services throughout the single market, either through establishment of branches or exercising the freedom to provide services. The passporting notification procedures executed via the Bank of Lithuania might take 1 (if the freedom to provide services is exercised) or 3 months (if branches in other EEA member state are established).

If you have questions, related to Fintech opportunities in Lithuania, please do not hesitate to contact us: Inga Karulaitytė-Kvainauskienė, Attorney at law, [email protected], phone 8 5 212 4084.

More about Fintech opportunities for Fintech companies in Lithuania you can also see in our video.

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