Bank of Lithuania joins Single Euro Payments Area

VILNIUS - From now on, government institutions holding their accounts with the Bank of Lithuania will be able to initiate and receive payments in euros according to the SEPA credit payments scheme, the Bank of Lithuania reports.

"We are happy to offer a modern payment instrument which will expand opportunities for cross-border payments in euros, and facilitate administration and processing of standard payments. Moreover, payment transfers according SEPA rules are less expensive compared to other formats of payment transfers," Vaidievutis Geralavicius, member of the board of the Bank of Lithuania said.

About 4,500 banks operating all around Europe have been engaged in processing of SEPA credit transfers. At the present time, every forth credit transfer in euro initiated in Europe has been made according to SEPA requirements. EU regulations provide for all euro payments to comply with SEPA rules in the Euro Area starting Feb.1, 2014, and in non euro countries starting Oct. 31, 2016, writes LETA.

The purpose of the SEPA project is to expand the market where the same payment instruments are used. This is used to ensure a higher level of services, stronger competition, more effective products and cheaper methods for making payments and to create conditions for innovations and new services.

SEPA covers 27 EU member states, as well as Iceland, Lichtenstein, Norway, Switzerland, and Monaco. After payment instruments and related processes are standardized at the European level, there will be actually no barriers left between domestic and cross-border euro payments.

On the initiative of the Bank of Lithuania, a SEPA Coordination Committee from representatives of commercial banks, foreign bank branches, Association of Lithuanian Banks and the Bank of Lithuania was established in 2007. The Committee has prepared and approved the Plan of Replacement of Payment Instruments with SEPA Payment Instruments in Lithuania. In early 2011, the second version of the plan was published. Seven working groups were set up to deal with specific tasks.