A spokesman for the Latvian central bank told BNS that the Bank of Latvia adopted the resolution because Banka Paritate's liabilities exceeded its assets.
The banking license issued to Paritate has not yet been revoked, but any provision of financial services by the bank has been suspended.
Banka Paritate's management has so far refused to give any comments on the Central Bank's decision, saying only that its resolution should be examined in detail first.
Earlier, Vladimirs Ostrovskis, who holds 95 percent of shares in Banka Paritate, submitted to the bank's board an application about the sale of his holdings. This was because the bank needed a new investor to increase its capital, which had shrunk to below the 5 million euro minimum under Central Bank regulations.
A spokeswoman for Banka Paritate said then that the bank was making every effort to stabilize the situation.
At the end of 2000, Banka Paritate was 2.804 million lats ($4.381 million) in the red, and its own capital was 2.949 million lats at the end of the year.
The Bank of Latvia granted a banking license to Banka Paritate in 1992. Late May this year Paritate ranked 17th among Latvian banks in terms of assets. There are a total of 23 registered commercial banks operating in Latvia, including Baltikums, which was issued a license on June 22 (see briefs).
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