Banks are concerned about Seimas’ ambitions: they themselves promise to expand the ATM network to the regions

Banks operating in Lithuania have reached an agreement and intend to sign a memorandum pledging to increase the locations of access to ATMs, the Bank of Lithuania reported at the meeting of the Seimas Budget and Finance Committee.

Previously in the Seimas, an amendment to the law had already been submitted by majority vote: the chairman of the Budget and Finance Committee, Mykolas Majauskas, and other parliamentarians proposed to force banks to guarantee a “reasonable distance” to ATMs .

The Chairman of the Board of the Bank of Lithuania, Gediminas Šimkus, proposes not to go the way of amending the law, but, alternatively, the way of a memorandum.

“We have reached an agreement with the industry, with the bank managers of the 4 largest banks with the largest ATM network – a memorandum, which is in principle a more constructive and flexible alternative, which opens the way for growth. future, an alternative to existing or proposed legislation. It works less mechanically and it is possible to include a wider range of criteria, “emphasized G. Šimkus.

He acknowledged that the network of bank branches had been reduced several times over the years, the number of ATMs had been reduced by 20% and the problem of cash availability was relevant; we must address this by ensuring an “optimal network of cash withdrawals in cities and regions.”

“An ATM is one of the tools. No less important are the alternative ways of accessing cash and how to improve them. Of course, the current conditions are unsatisfactory, but what needs to be done to improve the conditions?” Said G. Šimkus.

Here he also recognized that other means of accessing cash are not the same as an ATM.

G. Šimkus promised that the number of ATMs in Lithuania would double.

M. Majauskas emphasized that the amendment to the law has strong support in the Seimas.

“We took the first step, and after the presentation, the Seimas approved and we saw that the approval was by a large majority. It was even possible to scoff at the fact that, with such a majority, it would be possible to include ATMs in the Constitution. This shows that the problem is really serious enough and must be solved ”, added M. Majauskas.

He noted that banks, by closing branches and ATMs in the regions, have limited the quality and availability of services.

“Commercial banks wishing to operate in Lithuania must feel social responsibility and ensure the availability of banking services in the regions. Wild capitalism must be replaced by communality, and this is what we expect from the largest commercial banks operating in Lithuania, ”said M. Majauskas in favor of the banking agreement.

The committee suggested taking a break from considering the amendment to the law and evaluating how the banks would be successful in implementing the agreement. The committee members agreed to the break; the subject will be discussed again in the fall.

Move the same ATMs, install 100 new ones

The Bank of Lithuania (LB) states that sufficient cash availability is one of LAC’s strategic objectives. This can be ensured by an optimal ATM network in cities and regions, as well as the improvement and development of alternative ways of accessing cash.

At present, the ATM can reach 73 percent at a distance of 5 kilometers. population, and at a distance of 10 kilometers – 82 percent. population.

The memorandum provides for doubling access to network locations. There is an obligation to have an ATM in all settlements with more than 2,000 inhabitants. To do this, the existing ATM network would be redistributed and about 100 new locations would be installed.

It is agreed to develop a real alternative to ATMs through partner banks.

The needs of the population would be covered: the money supply, working hours and access to small-denomination bills would be guaranteed.

Banks should commit to improving the situation for consumers, and the Bank of Lithuania would carry out regular monitoring and annual consultations with market participants on various criteria.

Banks say the memorandum is a better way

The Lithuanian Banking Association confirmed that after reaching the memorandum, banks would double the existing number of ATM seats. New locations would appear in towns with up to 4,000 inhabitants.

“We have a shared vision of the need for people to have access to the network, just the question of how we could address that problem. We believe that the memorandum would be a more efficient way in every way, ”emphasized Eivilė Čipkutė, president of the Lithuanian Banking Association.

He assured that the banks agreed on key provisions on how to improve the availability of cash.

“I will ask the market participants to agree and not go the way of the law. We are motivated,” said E. Čipkutė.

It also had the support of the managers of Luminor, Swedbank, SEB and Šaulių bankas, who assured them that they would join the memorandum and thanked the Bank of Lithuania for the initiative.

However, not all committee members supported the memo’s path.

“I am disappointed with what I hear now. There is a lack of leaders, and again from the beginning, ”said farmer Valius Ąžuolas.

According to him, the market has had time to implement the promises for a year, but nothing happened until the bill appeared. V. Ąžuolas assured that he does not believe in this memorandum: “The politicians put on a good show, good public relations and the banks won.”

Liudas Jonaitis was outraged that it is very inconvenient for people to drive 17 to 20 kilometers and look for ATMs: “We saw a map of what the places could be. I would suggest that the law continue to be passed so that banks can establish ATMs in accordance with the law. “

Dalia Matukienė, president of the Council of Small and Medium-sized Enterprises of Lithuania, suggested in the committee that the discussion of the law continue and be adopted.

“First, Mr. G. Šimkus said that there will be ATMs in those settlements with 2,000 inhabitants and Lithuanian banking associations, that there are 4,000 inhabitants, so what will it really be like? And in fact, he would suggest passing a law and then signing a memorandum and discuss all the things in it. We know what was the situation with the banks when there was a crisis, small and medium-sized companies have very little trust in the banks operating in Lithuania, “said the representative of entrepreneurs.

The number of ATMs in Lithuania is currently the lowest since at least 2006: 887 ATMs were operating in the first quarter of this year, compared to 1,576 ATMs 10 years ago, according to statistics from the Bank of Lithuania.

On average in the euro zone 100 thousand. There are 66 ATMs per capita at that time: 37 ATMs in Lithuania. For comparison, there are 58 ATMs in neighboring Latvia, 67 ATMs in Estonia and 71 ATMs in Poland for every 100,000 inhabitants, according to World Bank estimates.