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Sunday 25.09.2016 | Name days: Rauls, Rodrigo

FCMC bans Estonian Versobank from providing financial services in Latvia

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUFinance and Capital Market Commission has decided not to allow Estonian Versobank to provide financial services in Latvia. In addition, the bank is now obligated to terminate contracts with existing clients, as confirmed by FCMC’s Public Relations specialist Agnese Licite.

She reports that the decision was made because Versobank has been in breach of the Credit Institutions Law in Latvia for a long time. The law states that credit institutions registered in another foreign country are only allowed to begin cross-border service provision through branch offices in the target country.

Licite notes that FCMC Council has decided to ban Versobank from providing financial activities in Latvia to ensure development and stability of the country’s finance and capital market, as well as protect the interests of depositors and lenders who use financial services. «FCMC believes Versobank’s activities put at risk the security and reputation of Latvia’s credit sector,» – Licite added.

In accordance with the Credit Institutions Law, if FCMC finds that a credit institution registered in another country performs activities that breach Latvia’s laws, the institution immediately requests the credit institution to halt all activities. If the credit institution in question does not comply, FCMC informs supervisory institutions of the country where the credit institution is registered of the illegal activities to put an end to violations.

Estonian Finansinspektsioon announced on Wednesday that Versobank had previously told it that the bank does not provide any unauthorized services in Latvia.

Estonian financial supervisory institution also notes that it cooperates with Latvian colleagues in the investigation regarding Versobank’s activities in Latvia.

At the end of June, TV3 News reported that State Police had performed a search in Versobank’s office in Latvia (Mukusalas Street 101). Authorities had taken action as part of a criminal case that was launched based on suspicions of the bank’s involvement in money laundering and illegal business activities.

Versobank’s representation in Latvia has now been liquidated – the bank remained open in the country from October 2013 until March 2016.

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