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Lithuanian govt to lend 1 bln euros for payments to SNORAS clients

December 06, 2011, 12:38 UTC+3
The Lithuanian government will lend 0.957 billion euros to the Bank Deposits Insurance Fund for payments to clients of the commercial bank of SNORAS
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Photo EPA/ITAR-TASS

Photo EPA/ITAR-TASS

VILNIUS, December 6 (Itar-Tass) —— The Lithuanian government will lend 0.957 billion euros to the Bank Deposits Insurance Fund for payments to clients of the commercial bank of SNORAS, which went bankrupt in Lithuania, Lithuanian Minister of Finance Ingrida Simonyte told journalists. “The decision has been made. Details will be specified at a government meeting on Wednesday,” she said.

The assets of the Bank Deposits Insurance Fund amount to 1.7 billion litai (0.493 billion euros), mostly in securities. Ms. Simonyte believes it would not be reasonable to put the whole of the money in circulation all at once. This is why the government made up its mind to lend the needed part of the sum from its own assets, which are at present free.

The SEB Bank has been chosen by the Bank of Lithuania (the national bank of the country) for paying back deposits to SNORAS clients. According to Simonyte, they may take their time, because the bank deposits, insured by the Lithuanian government, are to be paid back within five years. All the deposits under 100,000 euros are insured in Lithuania. The Bank of Lithuania reports that 90 percent of the clients will get their money back.

The government adopted on November 16 a resolution on the nationalization of the SNORAS Bank, which is the fifth largest commercial bank of the country. Some 440,000 clients, both legal entities and natural persons, kept their money there. Its total assets amounted to 5.6 billion litai (1.623 billion euros).

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