Stasys Kropas, president of the Lithuanian Banks’ Association, pointed out that the fund might be left without contributors if the rates of contributions were to be raised. As an example, he mentioned the Lithuanian branch of Danske Bank, which was reorganized from a unit and no longer paid any contributions to the Lithuanian deposit insurance fund. If necessary, depositors of the branch would be reimbursed from the Danish insurance fund, he said adding that the same was true for the Lithuanian branch of Nordea – the deposits would be covered from the Finnish deposit insurance fund.
“If those charges were increased, other Scandinavian banks would transform into branches easily,” he projected.
Central bank’s executives say that the discussions of this idea within the bank have not been completed yet. Banking experts believe that an increase in deposit insurance contribution rates will eventually be passed on to the banks’ customers through higher fees.
In line with existing legislation, the banks’ contributions to the fund comprise 0.45 percent of the amount of the deposits they attract. The rate applied to credit unions is 0.2 percent.
