This article looks at the process and requirements of becoming a specialised bank in Lithuania. If you wish to become a specialised bank in Lithuania this article provides into the scope, requirements, and capital requirements to become a specialised bank in Lithuania.
How to become a specialised bank in Lithuania - Introduction
A bank is regarded as a credit institution. Only credit institutions have the exclusive right to accept deposits and other repayable funds from non-professional market participants, while the unauthorised provision of financial services is prohibited. Accordingly, firms seeking to receive deposits from non-professional market participants, must, prior to this, obtain a banking license from the Bank of Lithuania.
Capital requirement to obtain a specialised bank license in Lithuania
In addition to the traditional option of becoming a bank, across Europe, including Lithuania, a more favourable option exists for Lithuanian and foreign startups seeking to begin providing various financial services in the European Economic Area. The key feature of a specialised bank is the minimum capital requirement of EUR 1 million, while for a traditional bank it is EUR 5 million. A specialised bank is a credit institution, which has the right to receive deposits, lend funds, provide transfer of funds and other usual banking services.
Bank services a specialised bank in Lithuania can provide
A specialised bank can provide the following services:
1. Acceptance of deposits and other repayable funds;
2. Lending (including mortgage loans);
3. Financial leasing;
4. Payment services;
5. Issue and administration of travel vouchers, bills of exchange and other payment instruments.
6. Provision of financial guarantees and financial guarantees;
7. Financial intermediation (agent activities);
8. Money management;
9. Creditworthiness assessment services;
10. Rental of safes;
11. Currency exchange (in cash);
12. Issuance of electronic money.
The license application process to become a specialised bank in Lithuania
Both Lithuania and its regulator, the Bank of Lithuania, are a pragmatic, innovative and a forward-thinking option to establish a bank. The regulator has established a new-comer programme and supports newcomers as parts of its strategy. With an authorised bank in Lithuania, you are able to passport and operate across the rest of Europe.
The approach of the Bank of Lithuania to the authorisation process for banks, as well as for other institutions, is, as far as possible, an open one and normally begins well before an application for an authorisation is submitted.
There are 4 stages in the authorisation process:
1. The pre-application stage: we make a formal introduction to the regulator on your behalf.;
2. Submission of an application to the Supervision Service of the Bank of Lithuania: the Supervision Service, within 5 business days, accepts the application for consideration;
3. Assessment of an application and attached documents: the Supervision Service, after starting the assessment procedure for the application and submitted documents, transfers all data to the European Central Bank (ECB). Since that moment, the Supervision Service and the ECB together in parallel assess the submitted documents. Where the documents submitted have no deficiencies, the license is issued within 6 months. From experience, however, considering the scope and seriousness of this license, the Supervision Service usually requests additional information or documents.
4. Issuance of a license or refusal of authorisation: after assessment of submitted documents is completed, the Bank of Lithuania formulates its conclusions and submits them to the ECB, which takes the final decision regarding granting of an authorisation.
License requirements to become a specialised bank in Lithuania
As part of its assessment of the authorisation application, the regulator will pay particular to the following key areas:
Completeness of the submitted documents;
Compliance with the minimum capital requirement for banks: according to the provisions of Regulation (EU) No 575/2013, the equity capital of a bank must be not less than EUR 5 million, of a small specialist bank – EUR 1 million;
Fitness of the firm's shareholders: the shareholders must have a good reputation and be financially sound.
Fitness of the firm’s management: the management must have a sufficiently good reputation, with the qualifications and experience that would allow them to adequately perform their duties
Buckingham Capital Consulting is a leading international consulting firm, specialising in payment services, electronic money, banking and investment services. We are able to advise you on the best course of action and strategy based upon your business plan and financial product or service. We can help you with licencing, compliance, operational setup and related services, including, obtaining banking facilities. For more information, visit our website on www.buckinghamcapitalconsulting.com
Call us today on 020 7866 2512 or 0800 689 0501. Alternatively, please send an email to firstname.lastname@example.org to arrange a telephone call or to discuss your requirements and plan. We are also able to arrange calls or conference calls using Skype. Our Skype ID is BCC54321. If you wish, we can arrange a meeting at one of our offices.