Banks, Financial Services, Latvia, Legislation

International Internet Magazine. Baltic States news & analytics Friday, 29.03.2024, 11:53

FCMC suspends the provision of financial services by JSC PNB Banka and decides on the unavailability of deposits

BC, Riga, 15.08.2019.Print version
The European Central bank (ECB) as a direct supervisor of JSC PNB Banka, on 15th of August, 2019 decided to recognize the bank as failing or likely to fail financial institution. Whereas the European Single Resolution Board (SRB) has decided not to take resolution of JSC PNB Banka, which means not to take actions to stabilize the Bank’s activities, announced Financial and Capital Market Commission (FCMC).

Having regard of above and with a view of protecting the deposits of bank’s customers, the Board of the Financial and Capital Market Commission (FCMC) at an extraordinary meeting decided to suspend the provision of financial services and decided on the unavailability of deposits at JSC PNB Banka.


The ECB as a direct supervisor of JSC PNB Banka took above decision under the Regulation (EU) No 806/2014, having established that the bank had failed to comply with regulatory requirements and assessing the financial situation of the bank.


Suspension of financial services

In accordance with the FCMC’s decision, as from 15.08.2019. at 21.00 the bank must completely cease the provision of financial services, including the execution of customer payments. Such a decision is taken to avoid the outflow of bank’s funds. This means that as from now operations of JSC PNB Banka’s cards, online banking and ATMs have been suspended.


“We are aware that this news is unexpected for the bank’s customers, but we can confirm that the FCMC is working to find the most convenient and efficient solution to start the payout of guaranteed compensation to the customers as soon as possible, covering the customer funds deposited in the bank up to 100 000 euro per depositor. In the coming days, 99.2 % of depositors will be able to start receiving their money deposited in the bank, which will be fully covered by the funds of the Deposit Guarantee Fund,” FCMC Chairperson Kristīne Černaja-Mežmale emphasizes.


Detection of unavailability of deposits

By reacting to the decisions of ECB and SRB, FCTC has decided on the unavailability of deposits to enable the customers to receive guaranteed compensation as soon as possible. The FCMC will decide on the form and procedures for the disbursement of guaranteed compensation in the coming days.


The disbursement of guaranteed compensation shall be started not later than on the 8th working day following the occurrence of the unavailability of deposits. The Deposit Guarantee Scheme ensures the disbursement of deposits up to EUR 100 000 for each customer of JSC PNB Banka in the form of a guaranteed compensation.


The guaranteed compensation of up to 100 000 euro shall be paid to both natural and legal persons for all types of deposits in any currency. The guaranteed compensation covers the bank client funds, accrued deposit interest until the date of occurrence of the unavailability of deposits, current account and payroll account balances and savings accounts

The FCMC will inform on the future actions needed in relation to the JSC PNB Banka.

 






Search site