SNORAS bank licence revoked, government compensates deposits up to 100 000 EUR
On 23 November, 2011 on the basis of the report of the temporary administrator of AB bankas SNORAS (the Bank) the Board of the Bank of Lithuania recognised AB bankas SNORAS as insolvent and decided to apply to the Vilnius District Court regarding the initiation of bankruptcy proceedings. Due to this, the licence issued to the Bank shall be permanently revoked.
The statutory Lithuanian deposit insurance mechanism shall now be applied to all creditors. The insured amount for each natural person and legal entity is up to EUR 100 000 (LTL 345 280). The compensation is calculated by summing up deposits in all accounts if the deposits are placed in several accounts of the bank. The Law stipulates that deposits should be compensated in 20 business days; however this term may be extended by 10 business days.
On 21 November, 2011 the Latvian Financial and Capital Market Commission has also decided to suspend provision of all financial services by AB bankas SNORAS subsidiary JSC “Latvijas Krājbanka“. This decision was made based on the established deficiency of funds in the bank. In accordance with the Deposit Guarantee Law of Republic of Latvia, the Deposit Guarantee Fund shall ensure payments of compensations for all types of deposits in any currency up to EUR 100 000 (LAT 70 000). The guaranteed compensation is calculated by summing up deposits in all accounts if the deposits are placed in several accounts of the bank. For more detailed info please also read the article of our Latvian colleagues.
In Estonia Snoras was operating only through a branch office and the compensation of deposits of over 300 Estonian clients will take place according to Lithuanian legislation.
Despite deposit insurance mechanism there are legal entities and natural persons who have deposits exceeding the insured amount. Insurance mechanism will only compensate the insured part of deposit and the amount exceeding the insured part of deposit may only be recovered during bankruptcy procedure. Therefore many clients contact us regarding the process of bankruptcy of AB bank SNORAS, its possible outcome and consequences to their businesses. Considering this we have prepared a set of various legal measures in order to protect our clients’ interest, and we would represent you in the AB bank SNORAS bankruptcy process and all other related issues.
Should you have any additional questions regarding this matter, please do not hesitate to contact TRINITI partners: Mr. Linas Sabaliauskas or Ms. Vilija Viesunaite in Vilnius; Sandis Petrovičs, in Riga; Mr. Tõnis Tamme in Tallinn.