Official translation

(6)(1-5) of this Law. When a group of persons has the rights of claim to funds under contracts, each person of the group is regarded a depositor and the funds are divided in equal parts to each depositor unless the contracts under which the rights of claim arise or court decisions do provide otherwise.

1. Deposit means the sum of depositor’s funds held in a commercial bank, a branch or a credit union under a bank deposit and/or bank account contract and other funds to which a depositor has the right of claim arising from financial operations with deposits by a credit institution (with the exception of the rights of claim under deposit safe-keeping contracts).
2. Insurance premium means a premium paid by the insured in the manner prescribed by this Law.
3. Insurance compensation means a sum of money set forth in this Law to which the depositor is entitled when an insurance event happens.
4. Insurance event means institution of bankruptcy proceedings to a credit union or a bank or taking a decision to suspend the activities of a banking or any other credit institution when a credit union or a bank is unable to settle with creditors.
5. Insurance sum means the amount of the insured deposit. CHAPTER TWO TERMS AND CONDITIONS OF DEPOSIT INSURANCE Article
6. Coverage and Insurance Sums
7. Insurance coverage shall apply to Litas - denominated deposits and foreign currency - USD and national currency of the EU Member State (hereinafter - foreign currency) - denominated deposits of depositors.
8. The deposits indicated in paragraph 1 of this Article must be insured with the Fund by commercial banks, credit unions and foreign banks with offices established in the Republic of Lithuania in which deposits kept are not insured (compensated) or their security is not ensured in any other way under the legislation of a foreign state to the jurisdiction whereof belongs the bank which has an established branch.
9. If the deposits held with a branch are insured (compensated) or are protected in any other way in accordance with the legal acts of the relevant foreign state but where the Fund Council determines that that these conditions of insurance (compensation) or other .protection are less favourable than those prescribed by this Law, the bank which has established the branch must provide additional insurance for the deposits held by depositors at the branch following the procedure prescribed by the Fund Council and announced in “Valstybės žinios” (“Official Gazette”). Only those deposits which, under the laws of a foreign state, have conditions of insurance (compensation) or other protection measures lower than those provided for in this Law shall be subject to complementary insurance. Deposits which, under the laws of a foreign state, are not covered by insurance (compensation) or protected otherwise must be insured in accordance with this Law.
10. Conditions of insurance (compensation) coverage or other protection measures of deposits held at a branch may not be higher than those set forth in this Law.
11. Conditions of deposit insurance may not be an instrument of competition used in advertising.
12. Insurance coverage shall not apply to the following: 1) deposits of the Bank of Lithuania; 2) deposits of the Fund; 3) deposits of the institutions and agencies of public administration; 4) deposits of credit institutions; 5) deposits of pension funds, enterprises administering pension funds, investment companies, enterprises administering investment companies, brokerage firms, investment management and consultancy firms, also enterprises engaged in leasing, and deposits of insurance companies; 6) debt securities issued by the same insured and liabilities arising out of own acceptances and promissory notes.
13. The insured sum shall be equal to the depositor’s deposit kept at a commercial bank, a branch or a credit union on the day of insurance occurrence but it may not be in excess of: 1) LTL 45, 000 - from the day of entry of this Law into force; 2) LTL 50, 000 - from 1 January 2004; 3) LTL 60,000 - from 1 January 2007; 4) EU 20, 000 - from 1 January
15. The insured sum of the deposit covered by a complementary insurance shall be equal to the difference between the deposit and the amount payable to a depositor under the legal acts of a foreign state. Article
16. Insurance Premium
17. The insurance premium shall be calculated from the sum of the Litas-denominated and/or foreign currency - denominated balance of money on depositors’ accounts opened under bank deposit and/or bank account agreements at credit unions, commercial banks and branches where the deposits are not compensated or protected otherwise under legal acts of the state to the jurisdiction whereof belongs the commercial bank which has established the branch. When providing complementary insurance pursuant to the case provided for in Article

(3), the insurance premium shall be calculated from the sum which amounts to the difference between the funds on accounts of deposits subject to complementary insurance opened under bank deposit and/or bank account agreements, and benefits payable to depositors under the legal acts of a foreign state.

1. The annual rate of an insurance premium, with the exception of the case indicated in paragraph 3 of this Article shall be as follows: 1) 0.45 per cent for commercial banks and branches; 2) 0.2 per cent for credit unions.
2. The Fund Council shall have the right to change the rate of the insurance premium in the following cases: 1) when the ratio of the Fund’s capital and total deposits covered by insurance becomes higher than 3 per cent but does not exceed 4 per cent. In this case the annual rate of the insurance premium for the insured specified in paragraph 2

(1)of this Article must not be lower than 0.045 per cent, and for the insured specified in paragraph 2

(2),of this Article - not lower than 0.025; 2) when the ratio between the Fund’s capital and total deposits covered by to insurance becomes higher than 4 per cent. In this case the rate of the insurance premium for the insured indicated in paragraph 2

(1)of this Article must not be lower than 0.001 per cent, and for the insured indicated in paragraph 2,

(2)of this Article - not lower than 0.0005 per cent. 4. Commercial banks authorised to accept deposits, and foreign banks which have established branches authorised to receive deposits in cases specified in Article 3

(2)shall pay to the account of the Fund the first (advance) premium in the amount of LTL 5,000. Credit unions authorised to receive deposits, and newly established credit unions authorised to receive deposits shall pay to the account of the Fund the first (advance) insurance premium in the amount of LTL 500 in the manner prescribed by the Fund Council. Other insurance premiums shall be calculated by the insured in accordance with the provisions of paragraphs 1 and 2 of this Article, and shall pay them to the account of the Fund each month. 5. The procedure of calculation of an insurance premium, its payment and time limits as well as the procedure of changing the rate of an insurance premium and revision of the procedure shall be determined by the Fund Council and announced in the “Valstybės žinios” (Official Gazette). 6. If the insured fails to pay an insurance premium or a part thereof to the account of the Fund within the time limit prescribed by the Fund Council, a default interest shall be charged for each overdue day. The rate of the default interest shall be determined by the Fund Council with account of the average interest rate of the preceding calendar quarter payable on the bonds of the Government in LTL with maturities up to one year. Default interest shall be calculated and paid according to the procedure of calculation of default interest for failure to pay an insurance premium when due and its payment approved by the Fund Council. If the insured fails to pay insurance premiums, the sum due and the default interest shall be recovered from him in the manner prescribed by the laws of the Republic of Lithuania. 7. From the day when an insurance event takes place for the insured or when the Fund Council terminates insurance of the deposits of the insured, premiums shall cease to be paid. In this case the part of an insurance premium not paid to the Fund prior to the day of an insurance event or termination of insurance shall be regarded as a debt of the insured to the Fund, and default interest established in paragraph 6 of this Article shall not be calculated. Article 5. Insurance Compensation 1. A depositor shall become entitled to an insurance compensation from the day of occurrence of the insurance event. Amounts of insurance benefits to depositors shall be as follows: 1) 100 per cent of the deposit up to LTL 10, 000 - from the day of entry of this Law into force up to 31 December 2009; 2) 90 per cent of the deposit from LTL 10,000 up to LTL 45, 000 - from entry of this Law into force to 31 December 2003; 3) 90 per cent of the deposit from LTL 10, 000 up to LTL 50,000 - from 1 January 2004 to 31 December 2006; 4) 90 per cent of the deposit from LTL 10, 000 up to LTL 60, 000 - from 1 January 2007 to 31 December 2009; 5) from 1 January 2010:

1. a)100 per cent of the deposit up to the amount in Litas corresponding to EUR 2, 500;
2. b)90 per cent of the deposit from the amount in Litas corresponding to EUR 2, 500 up to the amount in Litas corresponding to EUR 20, 000. 3. Insurance benefits for deposits in foreign currency shall be calculated in accordance with the exchange rate of Litas and foreign currency determined by the Bank of Lithuania on the day of the insurance event. 4. Insurance benefits shall be paid out in Litas within three months from the occurrence of the insurance event. The Fund Council may extend the time limit for not more than twice and each time - for a period not longer than three months. The depositor’s right to receive an insurance benefit shall be valid for not longer than 5 years from the day of the insurance event. Insurance benefits shall be paid to depositors without any restrictions except in the cases specified in Article 6 of this Law. 5. The insurance benefit for the depositors of the insured shall be calculated and paid by the Fund on the basis of the information held by the insured on the day of the insurance event about the depositors, their deposits and about the amounts of deposits covered by complementary insurance. The procedure of calculating insurance benefits and their payment shall be determined by the Fund Council and announced in “Valstybės žinios” (“Official Gazette”). 6. Following the payment by the Fund of insurance benefits to the depositors of the insured, the insured, by the direction of the Fund, must reduce liabilities to the depositors by the amounts specified by the Fund and increase liabilities to the Fund accordingly. 7. From the day on which an insurance benefit was paid to the depositor, he shall forfeit any right of claim to a sum of money in the amount of the insurance benefit from a bank or a credit union. Article 6. Restrictions on Insurance Compensations 1. Insurance benefits shall not be paid in the following cases: 1) for deposits which have been declared by a court decision as acquired illegally; 2) deposits to which the rights of claim have been transferred under contracts following the day of the insurance event; 3) deposits of heads of the administration of a bank and a credit union, heads of the subsidiaries (branches) of a bank and a credit union, and of the members of the council (supervisory board) and of the board; deposits of individuals holding at least 5 per cent of the bank’s share capital; deposits of members of the auditing council (auditors), auditors of credit unions and individuals carrying out external audit of a bank or a credit union; deposits of individuals having over 50 per cent of the capital at enterprises holding at least 5 per cent of the bank’s share capital; deposits of children, spouses and parents of the individuals indicated herein; 4) deposits of a borrower of a bank or a credit union if they are not in excess of his liabilities (the outstanding loans and interest). If the deposit of a borrower of a bank or a credit union is in excess of his liabilities (the outstanding loans and interest), the insured sum shall be calculated from the deposit less the liabilities, however, it may not be higher than established in Article 3,

(7)of this Law; 5) deposits kept in anonymous and coded accounts; 6) deposits for which the insured has fixed the interest rate twice as high as the interest rate set for comparable deposits held with the same credit institution.

1. To the individuals with regard to the legality of acquisition of whose deposit funds an application has been filed with law enforcement or judicial institutions payment of insurance benefits shall be suspended by the Fund Council pending coming into effect of the appropriate decision. Article
2. Termination of Insurance
3. The Fund Council shall terminate deposit insurance without a prior notice if the supervisory institution of the insured cancels the authorisation of the insured to accept deposits. The supervisory institution must notify the Fund Council about the cancellation of the authorisation to accept deposits on the day when the decision is taken.
4. If the insured violates the procedure of deposit insurance and/or if its activities threaten liquidity of the Fund, the Fund Council, at least twelve months in advance, shall give a notice to the insured about the imminent termination of deposit insurance. The Fund Council shall notify the supervisory institution of the insured about the warning to the insured. If the insured fails to eliminate the violations of the procedure of deposit insurance and/or if its activities do not improve, insurance of the deposits taken by the insured may be terminated by the decision of the Fund Council after consultation with the supervisory institution of the insured.
5. Termination of deposit insurance shall be announced by the Fund in the supplement “Informaciniai pranešimai” of ”Valstybės žinios” (“Official Gazette”).
6. If an insurance event occurs for the insured for which deposit insurance has been terminated, the Fund shall pay insurance compensations for the deposits accepted before the announcement about the decision on the termination of insurance in the supplement “Informaciniai pranešimai” of “Valstybės žinios” (“Official Gazette”) and not repaid before the day of the insurance event. CHAPTER THREE DEPOSIT INSURANCE FUND Article
7. Status of the Fund
8. The Fund shall be a state-owned enterprise established under the Law on Insurance of the Deposits of Individuals by the Government of the Republic of Lithuania, registered in the manner prescribed by the laws of the Republic of Lithuania, having legal personality, an independent balance sheet and accounts with the banks, its seal with the state emblem of Lithuania and its name - Valstybės įmonė Indėlių draudimo fondas (State Enterprise the Deposit Insurance Fund). Under the direction of the Government of the Republic of Lithuania, the functions of its founder shall be performed by the Ministry of Finance.
9. In its activities the Fund shall be governed by this Law, the Law on State and Municipal Enterprises and other legal acts unless this Law provides otherwise, as well as by its own Statutes. Article
10. Statutes of the Fund The Statutes of the Fund must specify the functions of the Fund, the rights and duties of its council and administration as well as other requirements set forth in Article 6 of the Law on State and Municipal Enterprises of the Republic of Lithuania. The Statutes of the Fund shall be approved by the Government of the Republic of Lithuania. Article
11. Functions of the Fund In implementing this law, the Fund shall : 1) accumulate, manage and dispose of the funds collected in the manner prescribed by this Law; 2) calculate and pay insurance benefits to the depositors of the insured; 3) assess the terms and conditions of deposit insurance(compensation) or other deposit guarantees provided by foreign states the banks whereof establish their branches in the Republic of Lithuania; 4) supervise whether banks and credit unions comply with the procedure of deposit insurance set forth in this Law; 5) assess its own risk; 6) perform other functions specified in this Law and the Statutes of the Fund. Article
12. Activities of the Fund The Fund shall provide insurance of deposits of its depositors, invest the resources of the Fund and carry out other activities provided for in the Statutes of the Fund. Article
13. Rights of the Fund The Fund shall have the following rights: 1) to have accounts with commercial banks and branches; 2) to conclude agreements and assume obligations; 3) to dispose of the Fund’s property in the manner prescribed by law and the Statutes of the Fund; 4) to terminate deposit insurance in the cases specified in Article 7 of this Law; 5) to verify calculation and payment of insurance premiums by the insured; 6) to obtain from the insured the information necessary for the performance of its functions; 7) to obtain from the supervisory authorities of the insured the following information: about the measures applied to the insured; about issue and cancellation of authorisations for commercial banks, credit unions, and branches to receive deposits; about licences granted to credit unions and authorisations granted to branches; 8) to take loans necessary for fulfilment of the Fund’s obligations; 9) to receive part of the assets of the bank or the credit union in liquidation which provided insurance coverage for the deposits of its depositors; 10) to engage in other activities provided for in the Statutes of the Fund. Article
14. Management of the Fund
15. The Council and the Administration shall be the management bodies of the Fund.
16. The Fund Council shall be made up of 5 members. They shall be appointed by the Government of the Republic of Lithuania. The Ministry of Finance shall nominate 3 candidates and the Bank of Lithuania - 2 candidates. With the approval of the Fund Council, one representative from an association of banks and one candidate from an association of credit unions may take part in the meetings of the Fund Council with a deliberative vote. Members of the Fund Council shall not receive any remuneration.
17. The term of office of members of the Fund Council shall be 4 years; the number of terms shall not be limited. An institution which has nominated its candidate to the members of the Fund Council may recall him/her and nominate another candidate.
18. Only nationals of the Republic of Lithuania, permanently residing in the Republic of Lithuania, shall be eligible for membership of the Fund Council.
19. The activities of the Fund Council shall be directed by Chairman of the Council and during his absence - by Deputy Chairman. Chairman and Deputy Chairman shall be elected by the Fund Council from among its members.
20. The Fund Council shall: 1) appoint and dismiss from office the head of the Fund Administration and the Chief Financier; 2) submit proposals to the founder concerning amendments of the Statutes of the Fund; 3) establish the procedure for calculation, payment of insurance premiums and its time limits, the amount of default interest for late payment of insurance premiums and the procedure of calculation and payment of default interest; 4) establish the procedure of calculation and payment of insurance benefits; 5) establish the procedure for investment of the resources of the Fund and the countries in which the resources of the Fund may be invested in the government and central bank securities; 6) adopt decisions on the termination of deposit insurance; 7) approve the annual financial statement; 8) approve the estimate of income and expenditure of the Fund; 9) establish the procedure for changing the rate of the insurance premium, adopt decisions on changing the rate of the insurance premium, determine the amount of a loan taken by the Fund for fulfilment of its obligations; 10) determine what is a commercial secret of the Fund; 11) examine applications of the insured and the depositors entitled to insurance benefits about the conduct of the administration; 12) establish the procedure for complementary insurance of deposits held with the branches; 13) approve the procedure for remuneration of and incentives for the Administration of the Fund and its employees, and the salary of the head of the Administration of the Fund and its Chief Financier; 14) approve appropriation of the profit of the Fund; 15) submit to the founder the annual report about its activities and the activities of the Fund; 16) perform other functions provided for in this Law and the Statutes of the Fund. 7) The Administration of the Fund shall manage the Fund in the manner laid down in the Statutes of the Fund. 8) The activities of the Administration shall be directed by the head of the Administration who shall be answerable to the Council and the founder. The head of the Administration, in the manner prescribed by laws, shall conclude and terminate employment contracts with the employees of the Fund. He shall have the right to enter into contracts on behalf of the Fund, represent the Fund at state government and administration institutions, courts, and may have other rights provided for in its Statutes. 9) The head of the Administration and the employees, in the manner prescribed by laws of the Republic of Lithuania, must compensate to the Fund for the losses caused through their fault. Article
21. Confidentiality of the Commercial Secrets of the Fund
22. The information which is a commercial secret of the Fund may be disclosed only to the institutions specified in laws and in the in the manner prescribed by laws.
23. For disclosure of information which is a commercial secret of the Fund members of the Fund Council and the employees of the Fund shall be held liable in the manner prescribed by law. Article
24. Capital of the Fund
25. The capital of the Fund shall consist of the authorised capital and the reserve capital.
26. The authorised capital of the Fund shall be LTL 30, 276,
28. If the assets of the Fund fall below its liabilities, the Fund shall not be held insolvent, and its authorised capital shall be restored up to the level established in paragraph 2 of this Article from the profit of the Fund.
29. The reserve capital shall be formed out of the profit of the Fund after covering the losses of the Fund and restoring the authorised capital of the Fund up to the level established in paragraph 2 of this Article.
30. The Fund must insure the fixed assets given in trust to him, in the manner stipulated by laws, for management, use and disposal, at an insurance company registered in the Republic of Lithuania. Article
31. Revenue of the Fund The revenue of the Fund shall be made up of: 1) insurance premiums; 2) default interest; 3) revenue from administration of the Fund: funds recovered, in the manner prescribed by laws, from a bank or a credit union in liquidation; income from investment of the Fund’s resources; income from other activities stipulated in the Statutes of the Fund. Article
32. Expenses of the Fund
33. Expenses of the Fund shall consist of: 1) insurance benefits; 2) interest on loans taken by the Fund; 3) expenses of administration of the Fund: expenses of payment of insurance benefits; investment expenses; expenses of employment of the administration and employees of the Fund; other expenses arising from performance of the other functions provided for in the Statutes of the Fund. Article 18.The Result of the Fund’s Financial Year
34. The result of the financial year shall be profit (loss) of the Fund. Appropriation of the Fund’s profit must be approved within 4 months from the end of the financial year.
35. The Fund’s profit may be used for the following: 1) to cover the losses of the Fund; 2) to restore the authorised capital of the Fund; 3) to accumulate the reserve capital;
36. The financial year of the Fund shall start on 1 January and end on 31 December. Article
37. Investment of the Fund’s Resources The resources of the Fund may be invested, in the manner determined by the Fund Council, into securities of the government and central banks of the countries established by the Fund Council. Article
38. Publication of Financial Statements The annual financial statement of the Fund must be made public, in the manner prescribed by the Statutes of the Fund, within 4 months from the end of the financial year. Before making it public, the financial statement must be subject to external audit. Article
39. Exemption of the Fund from Insurance of State Capital and Interest for the Use of Capital The Fund shall be exempt from insurance of state capital, with the exception of the case provided for in paragraph 5 of Article 15, and from payment of interest into the state budget for the use of state capital. Article
40. Winding up and Restructuring of the Fund The Fund shall be wound up or restructured by a special law of the Republic of Lithuania and in the manner prescribed by it. CHAPTER FOUR FINAL PROVISION Article
41. Entry into Force of the Law and Validity of Individual Provisions
42. Article 3

(4)of this Law shall enter into force after the Republic of Lithuania becomes a member of the European Union. 2. Part of the definition “an enterprise without legal personality” in paragraph Article 2

(2)of this Law shall be valid until the day of entry into force of the Civil Code of the Republic of Lithuania (Žin., 2000, No.74-2262).

1. All the assets of the Fund accumulated in accordance with the Law on the Insurance of Deposits of Individuals shall be managed in accordance with this Law from its entry into force. 4 Before entry into force of this Law, insurance benefits calculated in accordance with the Law on the Insurance of Deposits of Individuals but not yet paid to the individuals shall not be recalculated under this Law and shall continue to be paid from the resources of the Fund.
2. Deposits kept in a commercial bank and/or a branch which became the insured pursuant to the Law on the Insurance of Deposits of Individuals shall be regarded as covered by insurance pursuant to this Law from the day of its entry into force. Article
3. Implementation of the Law
4. Within 6 months after entry into force of this Law, the Government of the Republic of Lithuania shall amend the Statutes of the Fund and appoint members of the Fund Council. The members of the Fund Council who had been appointed in accordance with the Law on the Insurance of Deposits of Individuals shall continue to serve in their office until the Government of the Republic of Lithuania forms the Fund Council pursuant to this Law. Article
5. Invalidation of Laws
6. From the day of entry into force of this Law the following laws shall become invalid: 1) Law on the Insurance of Deposits of Individuals (Žin. 1996, No.1-1); 2) Law on the Amendment of Articles 3, 5, and 6 of the Law on the Insurance of Deposits of Individuals (Žin., 1996, No. 14-354); 3) Law on the Amendment of Articles 3, 4, and 6 of the Law on the Insurance of Deposits of Individuals (Žin., 1997, No. 66-1596); 4) Law on the Amendment of Article 17 of the Law on the Insurance of Deposits of Individuals (Žin., No. 115-3247); 5) Law on the Amendment of the Law on the Insurance of Deposits of Individuals (Žin., 1999, No. 65-2087); 6) Law on the Amendment of Articles 2, 6, and 14 of the Law on the Insurance of Deposits of Individuals (Žin., 2000, No. 29-802); 7) Law on the Amendment of the Law on the Insurance of Deposits of Individuals (Žin., 2000, No. 45-1290). I promulgate this Law passed by the Seimas of the Republic of Lithuania. PRESIDENT OF THE REPUBLIC VALDAS ADAMKUS