Decision to suspend activities of PNB Banka shows to effective and responsible supervision of banking sector - Karins

RIGA - The decision by the European Central Bank and the Financial and Capital Market Commission (FKTK) to suspend the activities of PNB Banks shows to the effective and responsible supervision of the banking sector, Prime Minister Krisjanis Karins (New Unity) told LETA.

''The situation within the banking sector is stable, and these decisions show to an effective and responsible supervision of the banking sector. The Latvian financial sector is being cleansed and becoming safer,'' the prime minister said.

Karins said that in the near future the FKTK and the responsible institutions will inform the bank's clients on the necessary information regarding payouts from the Deposit Guarantee Fund.

As reported, the FKTK last night decided to halt the operations of PNB Banka (formerly Norvik Banka), LETA found out from the FKTK.

In accordance with the FKTK’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 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 FKTK 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. In the coming days, 99.2 percent 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,” FKTK Chairperson Kristine Cernaja-Mezmale emphasizes.

The decision to suspend the bank's activities was made after the European Central Bank decided to recognize the bank as a failing or likely to fail financial institution.