Banks, Estonia, Financial Services, Latvia, Legal Counsel

International Internet Magazine. Baltic States news & analytics Wednesday, 21.11.2018, 20:57

FCMC forbids Estonia's Versobank to provide financial services in Latvia

BC, Tallinn, 07.09.2016.Print version
The board of the Financial and Capital Market Commission (FCMC) has decided to prohibit Estonia's Versobank from providing financial services in Latvia: attracting new customers in the territory of Latvia as well as the bank is requested to terminate contractual relationship with current customers, LETA was informed by FCMC spokeswoman Agnese Licite.

The decision on imposing a ban on provision of any financial services in Latvia is adopted because Versobank has been substantially violating procedures laid down in the Credit Institution Law under which a credit institution registered in another member state may launch cross-border activities through opening a branch in Latvia.


Versobank has continuously provided financial services through a permanent physical presence in Latvia that can be verified by numerous facts.


In accordance with the Credit Institution Law if the FCMC determines that a credit institution registered in another member state, which provides financial services without opening a branch, performs activities that are in contradiction to the laws of Latvia, it shall without delay request that the credit institution terminate such activities.


If a credit institution does not terminate the activities that are in contradiction to the laws of Latvia, the FCMC shall inform the relevant member state's supervisor, the duty of which is to act so that the violations are rectified.


The FCMC's has decided to prohibit Versobank from providing any financial services in Latvia, to ensure the development and stability of the financial and capital markets as well as to enhance the protection of the interests of investors and depositors that use financial services.


The FCMC is of the opinion that the activities of Versobank pose a threat to the credit institution sector, reputation and interests of customers.


Up to now, Versobank was eligible to provide financial services in Latvia only without a physical presence under the freedom to provide services.


Versobank is a credit institution authorized in Estonia, whose activities are subject to supervision of the Estonian Financial Supervision Authority.


Meanwhile, the Finansinspektsioon announced today that Versobank had previously confirmed to it that it is not offering unauthorized services in Latvia.

The Estonian Financial Supervision Authority also points out that it is cooperating with its Latvian colleagues in the investigation against Versobank's activities in Latvia, as well as continues to monitor the bank's activities in Estonia.






Search site