On withdrawal of the JSC “VEF banka’s” operating licence

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Riga, 26.05.2010

Press Release

On withdrawal of the JSC “VEF banka’s” operating licence

On 26.05.2010 the Board of the Financial and Capital Market Commission (hereinafter – the Commission) made a decision to revoke the credit institution operating licence dated 21.02.1992 of the JSC “VEF banka”.

“Withdrawal of the licence is not related to the bank’s insolvency. This decision was made based on the fact the shareholders of JSC “VEF banka” have not received authorisation from the Commission for the acquisition of qualifying holding and the bank failed to ensure compliance with provisions of the Credit Institution Law, as a result the shareholders had no decision-making rights and were unable to ensure prudent bank operations,” Anna Dravniece, Head of the Commission’s Office, points out.

In accordance with the Commission’s decision the JSC “VEF banka” is prohibited from executing any transactions and cash payments, as well as disposing of its property, archives, files and particular documents. The Commission decided to appoint its authorized representative for the JSC “VEF banka” until the appointment of an administrator for liquidation.

The Commission will file a petition for liquidation of the credit institution to the Riga Regional Court and the appointment of the liquidator as prescribed by law. 

“The Board of the Commission established that on 26.05.2010, a date of decision-making, there were sufficient financial assets in the JSC “VEF banka” for repayment of guaranteed compensations to its clients on its own. Therefore there is no necessity to use the Deposit Guarantee Fund assets for payments of guaranteed compensations to the JSC “VEF banka’s” depositors. JSC “VEF banka” is the smallest Latvia-registered credit institution with its market share just 0.02% of the total banking market. On 25.05.2010, the bank’s assets made up 4.9 million lats. As of 5 May 2010, there were 170 depositors, and only 20 clients’ deposit balance exceeded 1,000 lats,” Dravniece informs.

The Board of the Commission assigned the JSC “VEF banka”, acting in concert with the Commission’s authorized representative, to pay out the guaranteed  compensation as from 31.05.2010 in the amount of a guaranteed deposit placed with the bank, but not exceeding EUR 50,000  per depositor calculated into the currency of the guaranteed deposit according to the exchange rate set by the Bank of Latvia for the respective foreign currency, as follow: to natural persons upon their request either paying the guaranteed compensation in cash on the premises of bank on Monday, Wednesday and Friday from 9 a.m. to 12 p.m.; on Tuesday and Thursday from 14.00 to 17.00 or transferring into account of another credit institution indicated by the natural person; to legal persons by transfer into the account of other credit institutions indicated by the legal person. The Board of the Commission has determined that the JSC “VEF banka” has no right to require any commission or any other fee for payment of the guaranteed compensation or transfer of the guaranteed compensation into depositors’ accounts in other credit institutions. A person shall apply for the guaranteed compensation to the bank (legal address: Brīvības gatve 197, Riga) producing identifying document.

Pursuant to the provisions of the Deposit Guarantee Law, the Financial and Capital Market Commission shall consider complaints regarding the right of a depositor to the guaranteed compensation, the amount of guaranteed compensation and pay-out schedules (Kungu iela 1, Riga, LV-1050; e-pasts: fktk@fktk.lv; fax 67225755; phone 67774800; business hours: 8.30–17.15).

Anna Dravniece
Head of Office
Financial and Capital Market Commission
Phone: +371 6777 4800, email: anna.dravniece@fktk.lv

Prepared by:
Agnese Joela
Public Relations Specialist
Financial and Capital Market Commission’s Office
Phone: +371 67774808; email: agnese.joela@fktk.lv


Kungu iela 1, Riga, LV-1050
6 7774800
To report on unauthorised firms
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