Bank crisis hits Latvia again

  • 2011-11-24
  • From wire reports

 RIGA - Latvia’s State Police have detained a number of top Latvijas Krajbanka executives as part of the criminal case on deficiency of funds in the bank, reports LETA. The bank’s president Ivars Prieditis is among those held.
State Police Chief, General Ints Kuzis, said that he would visit the Cabinet of Ministers where the latest developments would be discussed in a closed Cabinet meeting. Kuzis also said that further information about the criminal procedure would be released Tuesday afternoon.

The State Police have started a criminal procedure over a deficiency of funds established at Krajbanka, the Prosecutor General’s Office press secretary Laura Pakalne announced. The criminal case was started pursuant to the Criminal Law’s Section 196 Part 2 - use of and exceeding authority in bad faith for purposes of acquiring property.
The applicable punishment is deprivation of liberty for a term not exceeding five years, or confiscation of property, or community service, or a fine not exceeding 120 times the minimum monthly wage.

Unofficial information shows that large amounts of money - 100 million lats - were transferred from Krajbanka to accounts in other banks last week. That is why the authorities and the Financial and Capital Market Commission’s actions have been so swift and the restrictions on the bank’s operations so stringent, they say.
The Financial and Capital Market Commission Monday evening decided to suspend all of the financial services provided by Krajbanka. The decision was taken as a large amount of money was found to be missing from the bank.
All Krajbanka ATMs and branches were closed as of Tuesday, but were working the next day. Krajbanka bankcards have been rejected by POS terminals at stores, and the Krajbanka Internet banking service is down. Individuals who have their salaries or pensions transferred to accounts in Krajbanka, as well as private and corporate customers, have not been able to access their money.

The Welfare Ministry, however, announced that it would contact the Union of Local Governments to help find a way to assist those residents who cannot access their pensions or benefit payments from the shuttered bank.
Approximately 60,000 persons in Latvia receive their pensions via Krajbanka, said State Social Insurance Agency (SSIA) spokesperson Edite Olupe. Overall, 80,000 persons in Latvia receive pensions or benefit payments from the SSIA via Krajbanka.