European Central Bank Issues Specialized Banking License to Lithuania-based Firm UAB SME Digital Financing

After a proposal from the Bank of Lithuania, the European Central Bank (ECB) has reportedly issued a specialized banking license to the Lithuanian capital company UAB SME Digital Financing.

It’s now expected that after acquiring such a permit, UAB SME Digital Financing will begin accepting deposits, offer account financing services and loans to companies or businesses.

At present, there are five “specialized” banks offering services in Lithuania: AB Mano bankas, Revolut Bank UAB, UAB GF bankas, AB Fjord Bank and European Merchant Bank UAB. Their primary activity is to accept deposits and issue loans. Another specialized banking platform – Crius LT, UAB – is getting ready to launch operations.

The Bank of Lithuania, along with the ECB, are currently reviewing six other applications for a specialized banking license. These types of banks are typically associated or involved with the further development of Fintech services, which aim to increase consumer-focused competition, attractiveness of modern financial solutions, and an overall better user experience (UX).

These specialized banks have been authorized to take deposits, lend money, offer funds transfers and various other regular banking services. However, these types of banks cannot offer investment and other similar financial services. The opportunity to launch such banking platforms emerged in 2017. The licensing process for these specialized banks takes about a year to complete.

As reported last month, the Bank of Lithuania, the nation’s central bank, had revealed that the number and value of payments completed via its platform, CENTROlink, had doubled last year, while instant payments surged by around four times (when compared to previous years).

Keeping these developments in mind, Bank of Lithuania has decided to make changes to the fees charged for CENTROlink services. The institution plans to adopt a more rigorous approach when it comes to assessing or evaluating local payment service providers and their management (beginning this year).

As covered, Open Banking Fintech Yapily, a London-based startup, will open an office in Vilnius, Lithuania, the company’s third European office. Yapily notes that it joins a number of UK Fintechs including Revolut, Curve, and Square that have operations in Lithuania. The company says it will hire up to 30 people in Vilnius in the coming months. Yapily confirmed in January 2021 that it was recruiting for compliance, engineering, product, and operations roles.

kevin., a Lithuania-based Fintech startup, has raised €1.5 million in seed funding to further develop its “first of its kind” P2D2 product for mobile payments. kevin.’s solution is a PSD2-based open banking API that has been used to directly compete with card networks for mobile payments from pre-linked bank accounts.

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