Official translation               
                                                                                
               REPUBLIC OF LITHUANIA                                            
                                                                                
              LAW ON COMMERCIAL BANKS                                           
                                                                                
                   21 December 1994 No. I-720                                   
                                                                                
                  Chapter 1. GENERAL PROVISIONS                                 
                                                                                
     Article 1. The Purpose of the Law                                          
                                                                                
     The purpose  of the  Law is  to regulate  the activities  of               
commercial banks (hereinafter referred to as "banks") in order to               
assure a stable, reliable, efficient and safe system of banks.                  
                                                                                
     The  Law   shall  establish   the  procedure  and  terms  of               
establishing and  licensing banks  and their subdivisions as well               
as the  peculiarities of  their  activities,  reorganisation  and               
liquidation.                                                                    
                                                                                
     Banks  and   their  subdivisions   shall  be  registered  in               
accordance with  the procedure  established by  the  Law  on  the               
Register of Enterprises of the Republic of Lithuania.                           
                                                                                
     In their  activities banks shall comply with the Company Law               
of the  Republic of  Lithuania and  other legal acts, unless this               
Law provides otherwise, as well as with their statutes (bylaws).                
                                                                                
     This Law  shall not  apply to the banks whose activities are               
regulated by  separate laws.                                                    
                                                                                
                                                                                
     Article 2. Definitions                                                     
                                                                                
     "Bank" -  an enterprise  functioning on  the basis  of share               
capital which  accepts deposits  and other repayable funds and/or               
makes loans, and assumes all the risks and responsibility related               
thereto, and engages in other activities specified by this Law.                 
                                                                                
     "Bank Subsidiary" - a bank in which some other bank directly               
and/or indirectly  holds a portion of share capital equivalent to               
5O% or  more of  its voting  shares or a portion of share capital               
enabling  to   exercise  control   over  the  management  of  the               
subsidiary.                                                                     
                                                                                
     "A bank  branch" -  a  territorial  subdivision  of  a  bank               
registered in  the Republic  of Lithuania  which does not possess               
the   rights of  a legal person and which operates in the name of               
the bank and performs all or some of banking operations on behalf               
of the bank, and  for the transactions and activities whereof the               
bank is liable to the extent of its assets.                                     
                                                                                
      "A  bank agency  " -  a territorial  subdivision of  a bank               
which represents  the bank abroad or in the Republic of Lithuania               
but which,  however, does not perform banking operations and does               
not engage in other commercial-business activities.                             
                                                                                
        "Banking license"  - a  written permission of the Bank of               
Lithuania to engage in the  activities specified in Article 25 of               
this Law;                                                                       
                                                                                
     "Block of  shares" -  1/1O or  larger amount of the share or               
voting capital  of a  bank acquired  or managed  directly  and/or               
indirectly by  legal or  natural  persons  or  a  group  of  such               
persons..                                                                       
                                                                                
                                                                                
     "Controlling interest"  - a  block  of  shares  acquired  or               
managed directly and/or indirectly by legal or natural persons or               
a group  of such  persons which enables its owners or  holders to               
control management and activities of the bank.                                  
                                                                                
     "Shares acquired  and/or managed  directly" -  a portion  of               
share capital  which a shareholder has acquired and/or manages in               
his or her own name or delegates the powers of management thereof               
to a  third person                                                              
                                                                                
     "Shares acquired  and/or managed  indirectly" - a portion of               
share capital acquired and/or managed through  property relations               
by a  shareholder or  a group  of shareholders  or a third person               
through a group of shareholders.                                                
                                                                                
     "Bank capital"  - the  sum of  fixed capital  and additional               
capital.                                                                        
                                                                                
     "Fixed capital"  - the  sum of  the  bank's  share  capital,               
reserve capital  and the  amount of  retained earnings  of    the               
pervious year.                                                                  
                                                                                
     "Share capital"  -  the  nominal  value  of  all  registered               
shares.                                                                         
                                                                                
     "Reserve capital"  -   the  capital  formed  in  the  manner               
established by the Bank of Lithuania.                                           
                                                                                
     "Additional capital"  - other  capital of  the bank provided               
for the statute (bylaws) of the bank.                                           
                                                                                
     Article 3. Prohibitions                                                    
                                                                                
     It shall  be  prohibited  to  engage  in  credit  activities               
without a licence of the Bank of Lithuania.                                     
                                                                                
     Only   persons registered in the Republic of Lithuania which               
have  been  issued  with  a  banking  license  according  to  the               
procedure established  by this  Law may  use  the  words  "bank",               
"commercial bank"  or any  other combinations  or derivatives  of               
these words  in their  name  or  for  advertising  or  any  other               
purposes.                                                                       
                                                                                
     Words  specified   in  Par.  2  hereof,  as  well  as  their               
combinations and  derivatives   may be used in the names of other               
economic entities only if the context in which they occur implies               
that such usage is not associated with credit activities.                       
                                                                                
     The word "state" or derivatives of the word may only be used               
in a  bank's name  if at  least 51  per cent  of the bank's share               
capital belongs  to the  State  of  Lithuania  by  the  right  of               
ownership.                                                                      
                                                                                
     Article 4. N ame and Seal of a  Bank                                       
                                                                                
     The name  of a  bank or  its subdivisions   must include the               
words   "bank" or  "commercial bank".  The name of a bank and its               
trademark  must   be  registered   according  to   the  procedure               
established by the laws of the Republic of Lithuania.                           
                                                                                
     The seal must bear a full or abbreviated name  of the bank.                
                                                                                
     Article 5.  Liability of Banks                                             
                                                                                
     Banks shall  be legal  persons of  limited liability.   They               
shall not  be liable  for the  obligations of  their shareholders               
and/or founders,  and the  shareholders and/or  founders shall be               
liable for  the obligations of banks only to the extent of assets               
they have transferred to banks either as founders or by acquiring               
shares thereof.                                                                 
                                                                                
     Banks shall  not be liable for the obligations of the state,               
and the  state shall  not be liable for the obligations of banks,               
except in cases when the state undertakes such a liability.                     
                                                                                
     Article 6. Establishment of Foreign Banks in the Republic of               
               Lithuania                                                        
                                                                                
     A foreign bank in the Republic of Lithuania may:                           
                                                                                
     1) establish a subsidiary;                                                 
                                                                                
     2) acquire  shares in  a  functioning  bank  and,  with  the               
consent of the Bank of Lithuania, acquire controlling interest in               
a functioning bank; and                                                         
                                                                                
     3) upon  receiving  permission  of  the  Bank  of  Lithuania               
establish bank agencies.                                                        
                                                                                
     The Bank  of Lithuania  shall issue  a banking  license to a               
foreign bank subsidiary only provided:                                          
                                                                                
     1) the   foreign bank establishes a subsidiary on its own or               
together with  other bank  or banks  licensed in  the Republic of               
Lithuania;                                                                      
                                                                                
     2) fixed  capital is not less than the minimum fixed capital               
set by the Bank of Lithuania;                                                   
                                                                                
     3) the  laws of  the foreign state within whose jurisdiction               
the foreign  bank exists,  permit its  banks  to  establish  bank               
subsidiaries abroad, or the bank has the  permission  of the bank               
supervisory body of that country;                                               
                                                                                
     4) the  statute (bylaws)  have been registered in accordance               
with the  procedure established  by the  laws of  the Republic of               
Lithuania;                                                                      
                                                                                
     5)   the capital indicated in the statute (bylaws)  is fully               
paid-in.                                                                        
                                                                                
                                                                                
         CHAPTER 2. ESTABLISHMENT AND LICENSING OF BANKS                        
                                                                                
     Article 7. Founders of a Bank                                              
                                                                                
     Legal and  natural persons  of the Republic of Lithuania and               
enterprises which do not possess the rights of a legal person who               
have concluded  a founding   agreement  in  accordance  with  the               
procedure established  by Article  3 of  the Company  Law of  the               
Republic of Lithuania shall be considered to be the founders of a               
bank except  the cases  of the  establishment of  a foreign  bank               
subsidiary. The  agreement shall  define the founders' rights and               
duties in founding the  bank, as well as liability for failure to               
fulfil their obligations. The minimum number of founders shall be               
7 persons.  Each founder  of a  bank must also be its shareholder               
who has acquired at least 2 per cent of the bank's share capital.               
The Bank  of Lithuania  may refuse  to issue a banking licence if               
one or several founders refuse to acquire the bank's shares or if               
they transfer them to other persons before the licence is issued.               
                                                                                
                                                                                
     A foreign  bank may  be the  founder of  a subsidiary in the               
Republic of Lithuania if:                                                       
                                                                                
     1) it  has a  banking license  issued by  the foreign  state               
within whose jurisdiction the foreign bank exists;                              
                                                                                
     2) the  laws of  the foreign state within whose jurisdiction               
the foreign  bank exists  permit its  banks to    establish  bank               
subsidiaries abroad,  or the  bank has   the  permission  of  the               
bank supervisory body of that state.                                            
                                                                                
     The founders  of a  bank must  have an impeccable reputation               
and must  submit   to the  Bank of  Lithuania information  on the               
origin of  the funds  used for  the formation of the bank's fixed               
capital,  as   well  as   documents  concerning  their  financial               
situation.                                                                      
                                                                                
                                                                                
     Article 8. Establishment of a Bank                                         
                                                                                
     A bank may be founded in a closed or open manner.                          
                                                                                
     Having registered  the  statute  (bylaws)  of  the  bank  in               
accordance with  the procedure established by the Law on Register               
of Enterprises  of the  Republic of  Lithuania, issued shares and               
accumulated fixed  capital, the  bank founders  shall  submit  an               
application to the Bank of Lithuania for a banking licence.                     
                                                                                
     After the  Board of  the Bank of Lithuania adopts a decision               
to issue  a banking licence, a bank shall be registered according               
to the  procedure established  by the  Register of Enterprises of               
the Republic of Lithuania and thus acquire the right to engage in               
credit activities.                                                              
                                                                                
     The shares  of the  bank issued during its  founding may not               
be offered  for sale  publicly regardless  of the manner in which               
the bank  is founded  until the  bank is registered in accordance               
with the procedure established by law.                                          
                                                                                
     Pars. 1,  6-10, and  12 of Article 10 of the Company  Law of               
the Republic  of Lithuania  shall apply  to a  company which is a               
going concern  and the  shareholders' meeting  whereof   adopts a               
resolution to  engage in  banking activities;  such  company  may               
apply to the Bank of Lithuania for a banking license.                           
                                                                                
     After the  Board of  the Bank of Lithuania adopts a decision               
to issue  a banking licence, and after submission thereof to  the               
manager of  the Register,  the enterprise and its bylaws shall be               
re-registered according   to  the procedure  established  by  the               
Register of  Enterprises of  the Republic  of Lithuania  and  the               
enterprise acquires the right to engage in credit activities.                   
                                                                                
     Upon being  issued a  license of  the Bank  of Lithuania and               
upon being  registered in  the manner  prescribed by  the Law  on               
Enterprise Register  of the Republic of Lithuania, the bank shall               
acquire the  right to  commence  activities.  Amendments  to  the               
statute (bylaws)  of the  bank shall  be registered  upon   prior               
permission of  the Bank  of  Lithuania  in  accordance  with  the               
procedure established  by the  Law on  Enterprise Register of the               
Republic of Lithuania.                                                          
                                                                                
     Article 9. Establishment of Bank Branches Agencies                         
                                                                                
         Bank branches  and bank agencies shall be established in               
the  Republic  of  Lithuania  and  abroad  upon  receipt  of  the               
permission from  the Bank  of Lithuania  and  shall be registered               
according to  the procedure  established   by  the  laws  of  the               
Republic of  Lithuania. Other  subdivisions of  banks   shall  be               
established pursuant  to the  procedure  provided  for    in  the               
statute (bylaws)  of the  bank. They  shall function  within  the               
limits of  powers granted  to them  by the bank and in compliance               
with the regulations  approved by the bank.                                     
                                                                                
     Article 10. Banking Licence Application                                    
                                                                                
     The banking licence application must contain the following:                
                                                                                
     1) draft plan of the bank's activities;                                    
                                                                                
     2) the address of the head office of the bank;                             
                                                                                
     3) the founders' legal status; and                                         
                                                                                
     4) the  names of  the chairpersons  of the  bank's board and               
council and head of the bank administration.                                    
                                                                                
     The following  documents and  information shall be submitted               
along with the application:                                                     
                                                                                
     1) the statute (bylaws) of the bank;                                       
                                                                                
     2) the documents of the foundation of the bank (the founding               
agreement, minutes  of the  statutory meeting  and resolution  on               
the establishment of the bank);                                                 
                                                                                
      3) a three-year plan of economic activities (business plan)               
worked out  in accordance with a set form and contents prescribed               
by the  Bank of  Lithuania, including  a description of projected               
structure of the bank and  services provided by it;                             
       4)  information concerning the members of the bank's board               
and council,  the chairman  of the  board  and  chief  accountant               
(financier): their  age, educational background, working carrier,               
profession, participation  in the  bodies of  management of other               
enterprises, as  well as participation in the activities of other               
enterprises with  their own capital, their place of residence and               
information about previous conviction;                                          
                                                                                
     5) the  permit to  found a  subsidiary   in the  Republic of               
Lithuania issued  by the  supervisory authority  of  the  foreign               
state under whose jurisdiction the bank is functioning;                         
                                                                                
     6)  the   list  of   the  bank's  shareholders  compiled  in               
accordance with a set form prescribed by the Bank of Lithuania;                 
                                                                                
      7)  documents which  confirm that  fixed capital  has  been               
accumulated and paid in; and                                                    
                                                                                
      8) a description of the premises which will be  used by the               
bank. for its operations.                                                       
                                                                                
     Upon adopting  a decision  to be reorganised into a bank, an               
operating company must terminate its previous activities prior to               
the issue  of   a banking  license or within the period specified               
therein and submit in addition:                                                 
                                                                                
                  1) incorporation documents, the decision of the               
shareholders' meeting  to be  reorganised   into a  bank  and the               
reorganisation plan;                                                            
                                                                                
                   2) description of former activities, financial               
statements of  the previous year and last accounting period which               
are submitted together with the findings of independent auditors,               
information about  the structure  of the  share capital,  and the               
owners of  blocks of shares;                                                    
                                                                                
                 3) documents confirming that the company holds a               
sufficient amount  of capital  necessary for  banking activities;               
and                                                                             
                                                                                
               4) information concerning the payment of taxes and               
debts to creditors.                                                             
                                                                                
                  The Bank  of Lithuania  shall have the right to               
require   additional information or documents within 30  calendar               
days  after the receipt of the application and documents.                       
                                                                                
                                                                                
     Article 11. Resolution on Issuing a Banking Licence                        
                                                                                
     The Bank of Lithuania shall adopt  a resolution concerning a               
banking licence  and notify the applicant of its decision  within               
two months  of the  date of  the receipt  of the application. If,               
pursuant to  Paragraph   4 of Article 10 of this Law, the Bank of               
Lithuania requests  to submit additional documents, the two-month               
term shall  be calculated  from the  date of  the receipt  of all               
documents and information required for adopting a decision.                     
                                                                                
     A  banking  licence  issued  on  decision  of  the  Bank  of               
Lithuania may include conditions and restrictions with respect to               
certain operations  for which  the bank  in question  is not  yet               
ready.                                                                          
                                                                                
     Conditions and  restrictions included  in the license issued               
to a bank shall also apply to its subdivisions.                                 
                                                                                
     While informing  the applicant  about its decision to reject               
its application  for   a banking  licence or  to issue  a licence               
which contains  certain conditions  and restrictions, the Bank of               
Lithuania shall  present a written substantiation of the decision               
and inform the manager of the Register thereof.                                 
                                                                                
     The Board  of the  Bank  of  Lithuania  shall  consider  the               
application and issue                                                           
a banking licence only in such cases when submitted documents and               
available   information prove that the founders:                                
                                                                                
          1) have accumulated the minimum amount of paid in fixed               
capital;                                                                        
                                                                                
            2) retain expert managers of the bank (members of the               
board and  heads of   administration)  who possess  the  required               
qualifications, are of impeccable reputation and   experienced in               
banking;                                                                        
                                                                                
             3) the bank has premises and equipment necessary for               
carrying  out banking operations.                                               
                                                                                
     The banking  license shall  be issued  for an unlimited term               
and shall be not transferable.                                                  
                                                                                
     The restrictions  imposed by   the  banking license shall be               
lifted on the decision of the Bank of Lithuania.                                
                                                                                
     A stamp  duty   established by  laws shall  be paid  for the               
issuing of a banking licence.                                                   
                                                                                
     A decision   refusing  to issue  a banking  license may   be               
appealed in court within 10 days of its adoption.                               
                                                                                
     Article. 12. Revocation of the Banking Licence                             
                                                                                
               The banking licence shall become invalid as of the               
day   the Bank  of Lithuania  adopts a  decision to  revoke it by               
reason of:                                                                      
                                                                                
     1) the  bank's  liquidation;                                               
                                                                                
     2) the bank's reorganisation; and                                          
                                                                                
     3) bank's  failure to commence activities within 6 months of               
the day of its registration.                                                    
                                                                                
     Article 13. Revocation of the Banking Licence upon the                     
               Request of a Bank                                                
                                                                                
          Upon adopting  a decision  on its liquidation, the bank               
shall submit  to the  Bank of  Lithuania  a  written  application               
requesting for  liquidation  permission  and  revocation  of  the               
banking licence.   The  latest balance  sheet and  the scheme for               
settling its  creditors'  claims  must    be  attached    to  the               
application.                                                                    
                                                                                
     The  Bank  of  Lithuania  shall  grant  permission  for  the               
liquidation if  the bank  is in   a position to fully satisfy the               
creditors' claims within the time period acceptable to them. Upon               
the settlement  of the  creditor's claims  the Bank  of Lithuania               
shall revoke the banking licence.                                               
                                                                                
                                                                                
                            CHAPTER 3                                           
                                                                                
            SHAREHOLDERS OF THE BANK AND THEIR RIGHTS                           
                                                                                
                                                                                
     Article 14. Shareholders and shares of the Bank                            
                                                                                
     A shareholder   of  the bank  shall be  an actual  or  legal               
individual  or an enterprise which does not possess the rights of               
a legal  person who  has  acquired at least one share of the bank               
in accordance with the  procedure established by laws.                          
                                                                                
     It shall  be prohibited  to issue   bearer  shares  for  the               
formation of the bank's share capital.                                          
                                                                                
     An individual  who acquires  a block  of  shares in the bank               
without the  permission of  the Bank  of Lithuania  shall have no               
right to vote at the shareholders' meeting.                                     
                                                                                
     Non-monetary (property)  contribution for  the acquired bank               
shares may  only be immovable property necessary for guaranteeing               
the bank's  direct activities.  The portion  of the  bank's share               
capital paid  in non-monetary  (property) contributions  may  not               
exceed 20 per cent of the bank's share capital.                                 
                                                                                
     On the decision of the bank council, the bank may buy up its               
shares but  their nominal  value may not exceed 5 per cent of the               
bank's share capital.                                                           
                                                                                
     The following entities may not be shareholders of banks:                   
                                                                                
     1) bodies  of  state  power  and  administration,  with  the               
exception of the Government and local governments of the Republic               
of Lithuania;                                                                   
                                                                                
     2) institutions financed from the state budget;                            
                                                                                
     3) subsidiaries or enterprises of  the issuing bank; and                   
                                                                                
     4) enterprises  in which  the bank's investments account for               
10 percent or more of  the share capital.                                       
                                                                                
     The Government  and local  governments of  the  Republic  of               
Lithuania shall  be prohibited  from acquiring  and holding  non-               
voting shares of the bank.                                                      
                                                                                
                                                                                
     Article 15. Property and Non-Property Rights of the                        
               Shareholders of Banks                                            
                                                                                
     Individuals who  acquire bank  shares acquire  property  and               
non-property rights:                                                            
                                                                                
     1) during  the foundation of the bank - after the shares are               
paid up  and the  bank  is  registered  in  accordance  with  the               
procedure established by law;                                                   
                                                                                
     2) if   the  shareholders acquire  shares of  the bank's new               
share issue  - from the moment of registration in accordance with               
the procedure  established by law of the amendments to the bank's               
statute (bylaws)  in connection  with the  increase of the bank's               
share capital by reason of  a new share issue; and                              
                                                                                
     3) persons  who acquire  shares in  the secondary  market  -               
from the day of registration of the acquired shares.                            
                                                                                
     The shareholders'   property   and non-property rights shall               
be established by the Company Law of the Republic of Lithuania.                 
                                                                                
                                                                                
                          CHAPTER    4                                          
                                                                                
                       MANAGEMENT OF BANKS                                      
                                                                                
     Article 16. Managing Bodies                                                
                                                                                
     The managing  bodies of  the bank shall be comprised  of the               
shareholders' meeting,  the council   and  the board of the bank,               
and the head of the bank administration.                                        
                                                                                
     Article 17. The Shareholders' Meeting                                      
                                                                                
     The shareholders'  meeting shall  be the  supreme management               
body of  the bank.  All   shareholders shall  have the  right  to               
participate in  the shareholders'  meeting, irrespective  of  the               
class, type  and number  of  shares they hold. The members of the               
board and  the employees  of  the  administration,  who  are  not               
shareholders, may  also participate  in the shareholders' meeting               
with the right of advisory vote.                                                
                                                                                
     It  shall   be  solely   within  the   competence   of   the               
shareholders' meeting  to:                                                      
                                                                                
     1) adopt and amend the statute (bylaws) of the bank;                       
                                                                                
     2) elect  and dismiss,  if necessary, prior to the expiry of               
the term  of their  office, members  of the board of the bank and               
members of the audit service;                                                   
                                                                                
     3) settle  the issue  of the  dismissal of  the board of the               
bank upon the dismissal  of the bank council;                                   
                                                                                
     4) approve  the bank's  annual balance  sheet,  estimate  of               
income and  expenses and distribution of  profits, and decide the               
matters of compensating  losses.                                                
                                                                                
     5) adopt decisions concerning  the increase or decrease  the               
fixed capital;                                                                  
                                                                                
     6) adopt  decisions on  the liquidation or reorganisation of               
the bank,  elect and  dismiss the  members of bank's  liquidation               
commission and  approve accounting  of   said commission  in  the               
event of the bank's voluntary liquidation;                                      
                                                                                
     7)  approve   the  valuation   of  non-monetary   (property)               
contributions;                                                                  
                                                                                
     8) decide  other matters  proposed by the board, council and               
the audit service (the auditor);                                                
                                                                                
     9) analyse  the  shareholder's  proposals  and    complaints               
concerning  the work of  the  board and council of the bank; and                
                                                                                
     10) adopt  a decision to appeal to court for the institution               
of bankruptcy  proceedings against  the bank  in accordance  with               
Article 45 of this Law.                                                         
                                                                                
     The procedure  of  the  organisation  of  the  shareholders'               
meeting  and  adoption  of  decisions  during  the  shareholders'               
meetings   shall be  set forth in the Company Law of the Republic               
of Lithuania.  Decisions on the matters specified in  items 1, 3,               
5, 6  and 10  of Par. 2 hereof shall be adopted by a 2/3  vote of               
the attending shareholders.                                                     
                                                                                
                                                                                
     Article 18. The Procedure of the Formation of the Council of               
the Bank and its Powers                                                         
                                                                                
     The number  of the council members shall be specified in the               
statute (by  - laws)  of the  bank: it must  be odd and  not less               
than three.                                                                     
                                                                                
     The council  shall be  elected by the shareholders' meeting.               
During the  election of  the bank council, each shareholder shall               
have a  number of votes which shall be equal to  the  product  of               
shares held  by him or her and the number of the council members.               
The votes  shall be  cast at  the   discretion of the shareholder               
himself  (herself)     -  for  one  or  several  candidates.  The               
candidates receiving  the majority  of  votes  shall  be  elected               
members of the bank council.                                                    
                                                                                
     The council  of the  bank shall  be elected  for the maximum               
period of  four years from among its shareholders and individuals               
who are  not shareholders but represent legal individuals who are               
the bank's shareholders.                                                        
                                                                                
     Only a  legally capable  individual may  be a  member of the               
bank council.  In the  event that  the legal  person revokes  the               
powers  of  the  person  representing  it  in  the  council,  the               
individual must  be dismissed  form  the  council  regardless  of               
whether or  not he or she is the bank's shareholder. A new member               
of the  council may  be  elected  at  the  shareholders'  meeting               
according  to  the  general  procedure  to  fill  in  the  vacant               
position. Members  of the  bank council  may be  re-elected   for               
another  term.                                                                  
                                                                                
                                                                                
     The council of a bank shall commence its activities upon the               
end of the shareholders' meeting which elects it.                               
                                                                                
     The following individuals may  not be elected  as members of               
the council:                                                                    
                                                                                
     1) board  members or  head of the administration of the same               
bank; and                                                                       
                                                                                
     2) persons,  who, according  to the procedure established by               
law, have  been deprived  of the right to occupy this position or               
prohibited from  accepting  it.                                                 
                                                                                
     Neither the  council of  the bank  nor members thereof shall               
have the  right   to  delegate  their functions to  other persons               
or authorise them to discharge said functions.                                  
                                                                                
     The  shareholders'   meeting  may     specify   remuneration               
(honorariums) payable  to the  council members  only  from    the               
profit of the bank.                                                             
                                                                                
     The council of a bank shall:                                               
                                                                                
     1) appoint members of the board, its chairperson and  deputy               
chairpersons, and dismiss them;                                                 
                                                                                
     2) approve the regulations of the activities of the  board;                
                                                                                
     3) at  the request of the board, settle the issues regarding               
dismissal of any  member of the council who is a staff  member of               
the bank ;                                                                      
                                                                                
     4) observe  and analyse  the activities  of the  board,  the               
application of  financial                                                       
resources, organisation  of management, profitability of capital,               
salaries, and long-term evaluation of  the financial situation of               
the bank;                                                                       
                                                                                
     5)  submit  proposals  and  comments  to  the  shareholders'               
meeting on     the bank's  annual balance sheet, profit and  loss               
account , distribution of profit and  the report of the board;                  
                                                                                
     6) represent  the bank  in court while settling the disputes               
arising between  the bank  and the  board, a member of the board,               
or the head of the bank administration;                                         
                                                                                
     7) decide other matters provided for in statute (bylaws) and               
resolutions of the general meeting of  shareholders;                            
                                                                                
     8) draw up the  plan of  the bank's activities;                            
                                                                                
     9) establish  the procedure for granting loans, which may be               
granted only upon the approval of the council;                                  
                                                                                
     10) adopt  decisions on  the establishment of  the branches,               
bank agencies  and enterprises  of the  bank and investments into               
the capital of other enterprises; and                                           
                                                                                
     11) set the procedure of the formation of additional capital               
and application thereof.                                                        
     The council  of the  bank shall have the right to appoint an               
expert (  a panel  of experts) for the examination and assessment               
of the bank's bookkeeping and financial accounting.                             
                                                                                
                                                                                
                                                                                
     At the  request of  the council  of the  bank, the board and               
administration of  the bank must present documents related to the               
activities of the bank.                                                         
                                                                                
     Article 19. The Procedure of  Work of the Bank Council                     
                                                                                
     Members of  the bank  council shall  have equal  rights.  In               
voting, each  member shall  have one  vote. In the event of a tie               
vote, the chairperson shall have the casting vote.                              
                                                                                
     If a member of  the council cannot be present at the meeting               
of the  council, he or she, having got acquainted with the draft,               
may inform  the meeting  of  his or her opinion on the resolution               
put to the vote by voting  "for "  or " against" in writing.                    
                                                                                
     Meetings of  the council  shall be valid if attended by more               
than a  half of the council members. Resolutions shall be adopted               
by a  simple majority of votes, with the exception of resolutions               
on   the dismissal  of the  members of the council which shall be               
adopted by  a no  less than  2/3 majority  vote of   the  council               
members.                                                                        
                                                                                
     The meetings  of the  council must  be held  at least  every               
three months. Ordinary meetings of  the council shall be convened               
by the  chairperson of  the  council;  in the event of his or her               
absence - by a  deputy  chairperson.                                            
                                                                                
     Meetings shall also be convened if requested by no less than               
1/3 of  the council  members or  by the board of the bank. Issues               
put forward  by the initiators of the meeting must be included in               
the agenda of the meeting.                                                      
                                                                                
     Article 20. The Board of the Bank                                          
                                                                                
         The board of the bank shall manage the activities of the               
bank, and  its affairs,  represent the  bank, and be liable under               
law for   carrying  out the operations of the bank. The number of               
the members  of the  board may not be less than three, as well as               
the activities  of the  board and its members, rights and powers,               
the procedure  for the  passing of resolutions shall be set forth               
in the  statute (bylaws)  of the bank and regulations of the work               
of the bank board.                                                              
                                                                                
     The  members  of  the  board,  its  chairperson  and  deputy               
chairpersons shall  be appointed  for the  period not exceeding 4               
years. The  number of  terms a  board member  may  serve  is  not               
limited.                                                                        
                                                                                
     Only legally  capable persons  may be  appointed  members of               
the board of the bank. The following persons may not be appointed               
members of the board:                                                           
                                                                                
     1) a person who is a member of the council of the same bank;               
                                                                                
     2) a  person who  is a  member of  the board  or head of the               
administration of  any other  bank registered  in the Republic of               
Lithuania; and                                                                  
                                                                                
     3) a  person who  is by  law deprived of the right to sit on               
the board or prohibited from taking.                                            
                                                                                
     Some additional  requirements to the member of the board may               
be provided for in the statute (bylaws).                                        
                                                                                
                                                                                
                                                                                
     A member  of the board may resign after presenting a written               
application. The  application must  be considered  and granted no               
later than within 14 calendar days from the day of its filing.                  
                                                                                
     Members of  the board,  chairperson of  the board and deputy               
chairpersons shall  work in  the bank and get an official salary,               
which shall  be determined  by the  council of  the bank.  On the               
decision of the shareholders' meeting, honorariums may be paid to               
the members of the board, the chairperson of the board and deputy               
chairpersons.                                                                   
                                                                                
     The members  of the  board shall  have no  right to delegate               
their duties  to other persons. A board member who is temporarily               
unable to  work may  be replaced  by a  member of the council who               
shall be appointed by the council of the  bank. The powers of the               
council member  shall be  suspended for  the period  he or she is               
performing the duties of the board member.                                      
                                                                                
     Article 21. Administration of the Bank                                     
                                                                                
     The administration  of the  bank shall  be comprised  of the               
structural subdivisions  of its  central management staff as well               
as managers and deputy managers of bank branches.                               
                                                                                
     The  administration   of  the   bank  shall  carry  out  the               
resolutions of  the shareholders'  meeting, the  council, and the               
board.                                                                          
                                                                                
     The duties  and powers  of the  administration of  the  bank               
shall be  set forth by the statute (bylaws) of the bank , and the               
regulations approved by the board of the bank.                                  
                                                                                
     The administration  of the  bank including  the head  of the               
administration shall  be hired by the board of the bank. The head               
of the  administration may  not undertake  the  duties  of  chief               
financier (accountant),  be a member of the board of another bank               
or work in the administration of another bank.                                  
                                                                                
     The head  of the  administration shall  have  the  right  to               
conclude employment contracts with other employees.                             
                                                                                
     The  duties  of  the  head  of  the  administration  may  be               
performed by   the  chairperson of  the board  or any other board               
member.                                                                         
                                                                                
     Article 22. The Audit Service of the Bank (Auditor)                        
                                                                                
     At least  one auditor  shall  serve in the bank. The auditor               
shall be  elected by  the  shareholders'  meeting  for  a  period               
determined by the statute (bylaws) and not exceeding 4 years.                   
                                                                                
     The number  of terms  of office  of the auditor shall not be               
limited.  Any   legally  capable   actual  person  with  relevant               
qualifications may  occupy said position.                                       
                                                                                
     A member  of the  council or  board,  or  the  head  of  the               
administration, or the chief financier (chief accountant) may not               
be the auditor of the bank.                                                     
                                                                                
     The audit service (auditor) must:                                          
                                                                                
     1) inspect  the realisation  of the estimate, the activities               
of the bank, and control the compliance of  the bank's activities               
with the laws and the statute (bylaws) of the bank;                             
                                                                                
                                                                                
     2) inspect  the annual  balance-sheet  and  other  financial               
accountability documents  which serve as a basis for the adoption               
of resolutions by the shareholders' meeting;                                    
                                                                                
     3) report  to the  next shareholders'  meeting or meeting of               
the bank board all violations established during the examination.               
                                                                                
     The audit  service (auditor)  shall carry  out audits on the               
instructions of  the shareholders'  meeting, board  or council of               
the bank.                                                                       
                                                                                
     Article 23. Standing Committees and Services of the Bank                   
                                                                                
     Every bank  must  have  an  internal  audit  service  and  a               
standing loan  committee. other  committees and  services of  the               
bank may also be formed. Their functions, formation and operation               
procedure shall  be determined  by the  legal acts of the Bank of               
Lithuania and the bank statute (bylaws).                                        
                                                                                
                                                                                
                            CHAPTER 5                                           
                                                                                
                     THE ACTIVITIES OF BANKS                                    
                                                                                
                                                                                
     Article  24. Bank Statute (Bylaws)                                         
                                                                                
     The statute (bylaws) of the bank shall state:                              
                                                                                
     1) the name of the bank;                                                   
                                                                                
     2) the head office of the bank, its address;                               
                                                                                
     3) the bank's operations;                                                  
                                                                                
     4) the  nominal value  of  share capital and its composition               
according to  classes of  shares as well as the rights and duties               
they give to the owners;                                                        
                                                                                
     5) other capital;                                                          
                                                                                
     6) the procedure of payment for shares;                                    
                                                                                
     7) the  procedure of  transfer of shares to the ownership of               
other persons;                                                                  
                                                                                
     8) the  procedure of  exchange of the shares of one class or               
type into the shares of another class or  type;                                 
                                                                                
     9) the procedure for the issue and circulation of bonds;                   
                                                                                
     10) the management structure of the bank;                                  
                                                                                
     11) the  procedure of  the formation  of managing bodies and               
election or  appointment of their heads, their rights, duties and               
responsibilities;                                                               
                                                                                
     12) the  procedure of  calling the shareholders' meetings as               
well as voting at the;                                                          
                                                                                
     13) the procedure for the distribution of profit;                          
                                                                                
     14) the  procedure for  publishing bank  information in  the               
press;                                                                          
                                                                                
                                                                                
     15) the  procedure of  bank reorganisation  and liquidation;               
and                                                                             
                                                                                
     16) other  provisions which  are in compliance with laws and               
legal acts of the Bank of Lithuania.                                            
                                                                                
                                                                                
     Article 25. Bank Operations                                                
                                                                                
     Banks shall have the right to:                                             
                                                                                
     1) accept deposits and other repayable funds to the clients'               
accounts opened in the bank and to manage these accounts;                       
                                                                                
     2) extend and take loans;                                                  
                                                                                
     3) issue  financial pledges,  guarantees, and other security               
obligations;                                                                    
                                                                                
     4) issue  payment documents (cheques, bills. etc.) and carry               
out transactions with them;                                                     
                                                                                
     5) carry  out transactions  with securities  (shares, bonds,               
etc.);                                                                          
                                                                                
     6) carry out operations in foreign currencies;                             
                                                                                
     7) buy and sell precious metals;                                           
                                                                                
     8) issue and manage credit instruments;                                    
                                                                                
     9) receive  from clients valuables for safe-keeping and rent               
safe deposit  boxes of the bank vaults to customers for the safe-               
keeping of valuables and documents;                                             
                                                                                
     10) render  services and  consultations on issues of banking               
activities, finances, and clients' investment management; and                   
                                                                                
     11) carry  out other  operations established  by the  .legal               
acts of the Bank of Lithuania.                                                  
                                                                                
                                                                                
     Article 26. Standards Restricting the Risk of Banking                      
               Activities                                                       
                                                                                
     The following standards shall be established for banks:                    
                                                                                
     1) capital adequacy ratios;                                                
                                                                                
     2) liquidity ratios;                                                       
                                                                                
     3) maximum  open position in foreign currencies and precious               
metals; and                                                                     
                                                                                
     4)  maximum lending to one borrower.                                       
                                                                                
     The standards  and the methods of their calculation shall be               
established by the Bank of Lithuania.                                           
                                                                                
     Article 27. Bank Investments                                               
                                                                                
     Banks may  establish  enterprises,  be  their  co-owners  or               
shareholders.                                                                   
                                                                                
     The total  sum of  a bank's  investments into  the shares or               
capital of  another enterprise  may not  exceed 10 percent of the               
bank's fixed capital.                                                           
                                                                                
     A bank  may not  acquire and  hold controlling  interest  in               
another company.                                                                
                                                                                
     Provisions of  Pars. 2  and 3 hereof shall not be applicable               
to the  bank's investments  into the  shares or  capital  of  the               
enterprises which  are assigned,  according to  the laws  of  the               
Republic of Lithuania and legal acts of the Bank of Lithuania, to               
enterprises engaged  in  credit  and  financial  activities.  The               
requirements of Par. 2 hereof shall not be applicable if the bank               
acquired shares  as a  compensation for  an unpaid  bank loan. In               
this case  the bank  must within  one year's  period realise  the               
share  of  investments  into  the  shares  or  capital  of  other               
enterprises of  investment which exceeds the standard established               
by Par. 2 hereof.                                                               
                                                                                
     A bank  shall be  prohibited from  acquiring  shares  of  an               
enterprise which  holds  controlling interest in the bank or from               
being a co-owner of the enterprise..                                            
                                                                                
                                                                                
     Article 28. Safekeeping of the Bank Documents                              
                                                                                
     Banks shall  keep the following documents during the term of               
validity  of  agreements  and  three  years  after  the  time  of               
expiration:                                                                     
                                                                                
     1) agreements of loan, guarantee, security and pledge;                     
                                                                                
     2) any  other documents  of bank's partners, on the basis of               
which the agreements have been concluded; and                                   
                                                                                
     3) other documents provided for by the Bank of Lithuania.                  
                                                                                
               The bank may also keep other documents, as well as               
establish   a  different    time  frame  for  safekeeping,  which               
however, may  not   be shorter  than that provided for within the               
first section  of  this  article.                                               
                                                                                
     Article 29. Connected Lending                                              
                                                                                
     Connected lending of banks may not exceed 10 per cent of the               
bank's capital.                                                                 
                                                                                
     The following  individuals shall  be considered as connected               
persons:                                                                        
                                                                                
     1) owners  of  a  block  of  shares  in  the  bank  and  its               
subsidiaries, the spouses, parents and children of such owners or               
enterprises in  which said persons have acquired  directly and/or               
indirectly or hold more than 20 percent of ownership  capital;                  
                                                                                
     2) members  of the  council and  board of  the bank  and its               
subsidiaries   and    enterprises,   auditors,   heads   of   the               
administration and  bank branches  and the  spouses, parents, and               
children of  the above persons, or enterprises in which the above               
persons have  acquired directly  or/and indirectly  or hold  more               
than 20 percent of  ownership capital.                                          
                                                                                
     Banks must  submit to  the Bank  of Lithuania information on               
loans extended  to  connected  persons  in  accordance  with  the               
procedure established by the Bank of Lithuania.                                 
                                                                                
                                                                                
     Article 30. Securing  the Fulfilment of Obligations                        
                                                                                
          In order to secure fulfilment of obligations under loan               
agreements, banks  may accept as pledge goods and other materials               
and commodities,  bills and  other securities,  bills of  lading,               
currency values and other valuables, may conclude   agreements of               
pledging, guarantee,  security or  other agreements, which are in               
compliance with the laws of the Republic of Lithuania.                          
                                                                                
     If the borrower fails to repay the loan by the date fixed in               
agreement and  the repayment  of the loan is secured by property,               
the bank  shall have  the right to have its claims satisfied from               
the value of the pledged property  before other creditors.                      
                                                                                
     The bank may request that after the disbursement of the loan               
its client  (credit recipient)  present information  or documents               
required for the evaluation of his financial position.                          
                                                                                
     In the  event of  danger that  the loan  may not  be  timely               
repaid, the  bank may  unilaterally   terminate the  agreement or               
change it, or request additional security.                                      
                                                                                
     Banks shall  be prohibited  from accepting securities issued               
by the  bank itself or by connected persons as well as agreements               
of pledging  and guarantee  in order to secure fulfilment of bank               
obligations under loan agreements.                                              
                                                                                
                                                                                
     Article 31. Keeping of Secrecy                                             
                                                                                
          Present and  former members  of the council, the board,               
the administration and employees of the bank must keep secret and               
not use for personal or other person's gain information that they               
obtain in the course of their service with the bank.                            
                                                                                
     At the request of the Bank of Lithuania it must be furnished               
with all  documents and  information related  to the founding and               
activities of    a  bank.  Documents  and  information  shall  be               
presented at  the request  of other institutions in the cases and               
according to  the  procedure  established  by  the  laws  of  the               
Republic of Lithuania.                                                          
                                                                                
     Banks must  inform the  institutions of law and order if the               
documents submitted  to them  or any  other available information               
about  the   transactions  of   their  clients   testify  to  the               
legalisation  of   illegally  acquired   property  or   financial               
servicing of unlawful activities.                                               
                                                                                
     Banks must establish the procedure for keeping secrets.                    
                                                                                
     Article 32. Liability for Losses Incurred by the Bank                      
                                                                                
          Liability for  losses incurred  by the bank through the               
fault of  members of  the council,  and the board of the bank, or               
the administration and employees of the bank shall be established               
by the  laws of  the Republic  of Lithuania  as well  as by other               
legal acts and the statute (bylaws) of the bank.                                
                                                                                
                                                                                
                            CHAPTER 6                                           
                                                                                
          TYPES OF CAPITAL AND DISTRIBUTION OF PROFITS                          
                                                                                
                                                                                
     Article 33. Types of Capital                                               
                                                                                
     A bank  shall have  fixed capital  and additional  types  of               
capital.                                                                        
                                                                                
                                                                                
     Article 34. Fixed Capital of a Bank                                        
                                                                                
       Fixed  capital of  a bank may not be less than the minimum               
fixed capital established by the Bank of Lithuania.                             
                                                                                
     Upon prior  permission of  the Bank  of Lithuania, banks may               
reduce their  fixed capital  to the  size of  the  minimum  fixed               
capital established by the Bank of Lithuania.                                   
                                                                                
     Reserve capital  of banks  shall be  formed form  additional               
contributions of  their shareholders  and/or allocations from the               
bank profit.  The purpose  of reserve capital is to guarantee the               
bank's financial stability.                                                     
                                                                                
                                                                                
     Article 35. Distribution of Profit                                         
                                                                                
        Bank profit shall consist of the funds which remain after               
deduction of  bank expenses and losses of the financial year from               
bank income of the current year.                                                
                                                                                
     The financial  year  of  a  bank  shall  coincide  with  the               
calendar year.                                                                  
                                                                                
     The resolution on the allocation of profit must specify:                   
                                                                                
     1) the amount of profit;                                                   
                                                                                
     2) taxes;                                                                  
                                                                                
     3) allocations to specific provisions  for loan losses;                    
                                                                                
     4) allocations to reserve capital;                                         
                                                                                
     5) allocations  to other capital and funds specified by bank               
statute (bylaws);                                                               
                                                                                
     6) dividends;                                                              
                                                                                
     7) annual  payments (honorariums)  to members  of  the  bank               
board and council;                                                              
                                                                                
     8) retained profit.                                                        
                                                                                
     Profit  which  is  left  after  the  payment  of  taxes  and               
allocations to  bank reserve  capital and other capital and funds               
provided for  in the bank statute (bylaws) may not be paid out in               
the form  of dividends  and honorariums  if after a corresponding               
decision of  the shareholders' meeting capital adequacy ratio and               
minimum fixed  capital become less than the amounts prescribed by               
the Bank of Lithuania                                                           
                                                                                
     Taxable profit of banks shall be computed and the tax on the               
profit shall be paid in accordance with the procedure established               
by the  Law on  Taxes on Profits of Legal Persons of the Republic               
of Lithuania                                                                    
                                                                                
                            CHAPTER 7                                           
                                                                                
              ACCOUNTING, AUDIT, AND ACCOUNTABILITY                             
                                                                                
                                                                                
     Article 36. Accounting and Accountability                                  
                                                                                
     Banks  and   their  branches   shall  keep   accounting  and               
accountability according  to the  procedure set forth by the Bank               
of Lithuania.                                                                   
                                                                                
     Financial  statements  of  banks  must  be  examined  by  an               
independent auditor  and, within three months from the end of the               
financial  year,  approved  by  the  shareholders'  meeting,  and               
submitted to  the Bank  of Lithuania. The financial statements of               
banks shall  be published  in press   by May 1 in accordance with               
procedure established  by the  Bank of  Lithuania. Banks shall be               
liable for  the accuracy  of the  information  presented  in  the               
annual report according to the procedure prescribed by laws.                    
                                                                                
     Auditors   shall be  obliged  to  present  to  the  Bank  of               
Lithuania explanations on financial statements.                                 
                                                                                
                                                                                
                            CHAPTER 8                                           
                                                                                
                            SANCTIONS                                           
                                                                                
                                                                                
     Article 37. Sanctions Applied to Banks                                     
                                                                                
     The Bank  of Lithuania  seeking to  protect the interests of               
depositors,  and   to  assure  the  safety,  trustworthiness  and               
stability  of the bank and banking system shall have the right to               
apply to banks the following sanctions:                                         
                                                                                
     1) to  ward the  bank for  the shortcomings and violation of               
their activities and set  the term for their elimination;                       
                                                                                
     2) to  impose fines  on the heads of the bank administration               
according to the procedure prescribed by law;                                   
                                                                                
     .3) to  suspend or  revoke the licence of a bank restricting               
only, several or all of its operations (moratorium);                            
                                                                                
     4) to  suspend or  revoke  the  licence  of  a  bank  branch               
operation;                                                                      
                                                                                
     5) to request the removal of a  member (members) of the bank               
board or  head of the bank administration  and the appointment of               
administrator to the bank;                                                      
                                                                                
     6) to request the suspension of powers of a member (members)               
of the bank council;                                                            
                                                                                
     7) to  suspend the  powers of the bank  council, remove from               
office the board of the bank, the head of the bank administration               
and appoint a bank administrator;                                               
                                                                                
     8) to  limit access and use of the accounts held in the Bank               
of Lithuania; and                                                               
                                                                                
     9) to revoke a bank license.                                               
                                                                                
     The type  of sanctions  shall be  selected by  the  Bank  of               
Lithuania taking  into consideration  the nature of the violation               
on the  grounds whereof  the sanction  is imposed, and the effect               
that the  violation and  the imposed  sanction shall  have on the               
safety, stability  and trustworthiness    of  the  bank  and  the               
banking system .                                                                
                                                                                
                                                                                
     The validity  of the  resolution to  apply sanctions  may be               
within one  month appealed  against in a court of law, unless the               
laws of  the Republic of Lithuania establishes  otherwise. Appeal               
shall not stop the application of the resolution.                               
                                                                                
     The court  shall consider  the validity   of the grounds for               
the application of a sanction and whether or not the procedure of               
the application  thereof   has been  complied with. The court may               
not decide  questions concerning  the choice  of sanction and the               
expediency of its application.                                                  
                                                                                
                                                                                
     Article 38. The Grounds and Procedure for the Application of               
          Sanctions                                                             
                                                                                
     The Bank  of Lithuania  shall apply  the sanctions listed in               
Article 37  of  this  Law  if  at  least  one  of  the  following               
conditions is present:                                                          
                                                                                
     1) furnishing   of  incorrect information  to  the  Bank  of               
Lithuania;                                                                      
                                                                                
     2) failure  to provide  the Bank  of Lithuania with required               
information  or   documents  which   are  necessary  for  banking               
supervision;                                                                    
                                                                                
     3) non-compliance with the established standards; and                      
                                                                                
     4) violation  of any  laws or  legal acts of the Republic of               
Lithuania.                                                                      
                                                                                
                                                                                
     The sanctions  specified in  Article 37 of this Law shall be               
applied to banks on the decision of the Bank of Lithuania.                      
                                                                                
     A decision  to apply  a sanction  is taken  by the  Bank  of               
Lithuania based on the following:                                               
                                                                                
     1) documents  or information  which confirm that laws, other               
legal acts or standards are violated;                                           
                                                                                
     2) analysis of the economic standing of a bank;                            
                                                                                
     3) material  concerning previously determined violations and               
sanctions applied  to the bank by the Bank of Lithuania and other               
institutions;                                                                   
                                                                                
     4) a  prognosis of  the possible  effects of  the determined               
violations on  the standing  of the  bank, the  interests of  the               
depositors and  other bank  creditors, and  the stability  of the               
entire banking system; and                                                      
                                                                                
     5) explanations  by the  board  chairman  and  head  of  the               
administration.                                                                 
                                                                                
     The question  concerning the application of  a sanction to a               
bank shall be discussed in the presence of bank representatives.                
                                                                                
     In the  event that  bank representatives  fail to attend the               
discussion  or   present  explanations,  the  decision  to  apply               
sanctions shall be taken without their participation.                           
                                                                                
     A decision  to apply  a sanction,  with the exception of the               
sanction specified in item 2 of Par. 1 of Article 37 of this Law,               
must be taken within three months of the day of the establishment               
of the  violation. Sanctions  may not  be applied  for violations               
committed more than one year in the past.                                       
                                                                                
     Article 39.  Suspension of  Powers of  the  Bank  Board  and               
Procedure  for   Removing    the  Bank  Board  and  Head  of  the               
Administration                                                                  
                                                                                
     The powers  of the bank council shall be suspended, the bank               
board and  the head of the administration shall be removed, and a               
temporary administrator  shall be  appointed if   trustworthiness               
and stability  of the  bank are  threatened but  there is  a real               
possibility to remedy the situation upon suspending the powers of               
the bank  council, removing  the bank  board and  the head of the               
administration.                                                                 
                                                                                
     An administrator  shall be  appointed for  a period of up to               
one year. Upon  the administrator's request the Bank of Lithuania               
may extend the term for another year.                                           
                                                                                
     Article 40. The Temporary Administrator                                    
                                                                                
     The  temporary  administrator  is  a  manager  of  the  bank               
appointed by the Bank of Lithuania for the term of the suspension               
of powers  of the bank council and removal of  the bank board and               
head of the administration.                                                     
                                                                                
     From the  day of  appointment of the temporary administrator               
all the  powers of  the council,  the board  and the  head of the               
administration shall  be passed  to  the  administrator  and  all               
decisions of  the above bodies passed after the appointment shall               
be illegal and unenforceable.                                                   
                                                                                
     The  temporary   administrator  shall   have  the  right  to               
terminate employment contracts with members of the bank board and               
the head of the bank administration.                                            
                                                                                
     The temporary  administrator shall  not be  bound    by  the               
resolutions of  the shareholders'  meetings   if    they  are  in               
conflict with the purpose of his/her appointment or are passed on               
issues which under this Law are within the competence of the bank               
council and bank board.                                                         
                                                                                
     The   temporary    administrator   may   not   without   the               
authorisation or  agreement of  the shareholders' meeting sell or               
otherwise transfer,  mortgage the  bank's real estate, reorganise               
or liquidate the bank, or decide other questions which are within               
the competence of the shareholders' meeting.                                    
                                                                                
     The  temporary   administrator  must   inform  the  Bank  of               
Lithuania and  the shareholders'  meeting of the developments and               
results of  administration within  the  terms  set  by  them  and               
according to the established procedure.                                         
                                                                                
     The temporary  administrator must initiate a full bank audit               
which is to be completed within three months from the appointment               
of the  administrator. The  candidatures of  the auditors must be               
approved by the Bank of Lithuania. The audit report must show the               
actual standing of the bank's assets and liabilities.                           
                                                                                
     If the  audit results show that the bank is insolvent and is               
not  in   the  position   to  avoid   bankruptcy,  the  temporary               
administrator shall  appeal to the Bank of Lithuania to institute               
bankruptcy proceedings.                                                         
                                                                                
     In the  event that  the temporary  administrator of the bank               
resigns, the Bank of Lithuania shall decide on the appointment of               
another  temporary   administrator  or   on  the  institution  of               
bankruptcy proceedings.  The expenses  of the  Bank of  Lithuania               
connected with  the fees  of the temporary administrator shall be               
compensated by the bank.                                                        
                                                                                
     The temporary  administrator shall  be liable  in accordance               
with the  procedure established  by the  laws of  the Republic of               
Lithuania for  the damage  inflicted on  the bank through his/her               
fault.                                                                          
                                                                                
     Article  41.  Terminating  the  Services  of  the  Temporary               
Administrator                                                                   
                                                                                
     The  services   of  the   temporary  administrator   may  be               
terminated called prior to the expiry  of his/her term if:                      
                                                                                
     1) the  Bank of  Lithuania  determines  that  the  bank  can               
function in a trustworthy  and stable manner; and                               
                                                                                
     2) a bankruptcy proceedings has been instituted according to               
the procedure prescribed by laws.                                               
                                                                                
                                                                                
                            CHAPTER 9                                           
                                                                                
             REORGANISATION AND LIQUIDATION OF BANKS                            
                                                                                
     Article 42. Reorganisation of Banks                                        
                                                                                
     Banks shall  be reorganised in accordance with the procedure               
established by  the Company Law of the Republic of Lithuania upon               
the agreement of the Bank of Lithuania.                                         
                                                                                
     Article 43. Liquidation of Banks                                           
                                                                                
     Banks shall  be liquidated  in accordance with the procedure               
established by the Company Law of the Republic of Lithuania.                    
                                                                                
                                                                                
                           CHAPTER 10                                           
                                                                                
 PROCEDURE FOR INSTITUTING BANKRUPTCY PROCEEDINGS AGAINST BANKS                 
                AND COURT INVESTIGATION OF CASES                                
                                                                                
                                                                                
     Article 44. Bank Bankruptcy Procedure                                      
                                                                                
     Bank bankruptcy  procedure means  the assignment of the bank               
administrator,  reorganisation  or  rehabilitation  of  the  bank               
seeking to  avoid its  bankruptcy as well as the liquidation of a               
bankrupt bank.                                                                  
                                                                                
     Unless  this   Law  establishes  otherwise,  the  Enterprise               
Bankruptcy Law of the Republic of Lithuania shall apply to banks.               
                                                                                
     Upon the  institution of  bankruptcy proceedings  creditors'               
meetings shall be suspended.                                                    
                                                                                
     The institution  of bankruptcy  proceedings, its  course and               
the bankruptcy procedure implemented at the bank must be recorded               
in the Register of Enterprises.                                                 
                                                                                
                                                                                
                                                                                
     Article 45. Conditions for Instituting Bank Bankruptcy                     
               Proceedings                                                      
                                                                                
     The  court   shall  institute  bank  bankruptcy  proceedings               
following a  statement of  the bank's  insolvency by  the Bank of               
Lithuania as  well as  in accordance  with the  resolution of the               
shareholders' meeting  or the  statement of  creditors,  provided               
only   there is  a conclusion of the Bank of Lithuania concerning               
the bank insolvency.                                                            
                                                                                
     Article 46. Instituting Bankruptcy Proceedings in Court                    
                                                                                
     Bank bankruptcy  proceedings shall  be instituted in a court               
of the locality where the head office of the bank is located.                   
                                                                                
     Upon  receiving   a  statement   which  conforms   with  the               
conditions set forth in                                                         
article 45,  the court  shall that  same  day  appoint  the  bank               
administrator on  the recommendation of the Bank of Lithuania and               
fix his/her remuneration.                                                       
                                                                                
     The court  shall pass  a decision  to  institute  bankruptcy               
proceedings within 7 days and must:                                             
                                                                                
     1) notify the known creditors, the bank's correspondents and               
the manager  of the  register   of the  initiation of  bankruptcy               
proceedings  as  well  as  make  a  public  announcement  thereof               
indicating:                                                                     
                                                                                
     the court  in which  the proceedings  are to be held and the               
case number;                                                                    
                                                                                
     the requisites of the bank which is going bankrupt;                        
                                                                                
     time  period   during  which    creditors'  claims  will  be               
accepted;                                                                       
                                                                                
     2) suspend   other  court proceedings instituted against the               
bank and  inform other courts, where proceedings against the bank               
have been  instituted, of the existence of bankruptcy proceedings               
so as to have all other legal actions against the bank suspended.               
                                                                                
     The  decision   of  the   court  to   institute   bankruptcy               
proceedings may  be appealed against in the manner established by               
the Code  of Civil  Procedure of  the Republic  of Lithuania. The               
filing of appeal shall not stop the bankruptcy proceedings.                     
                                                                                
     In the  event that  a case against the bank is dismissed due               
to  reorganisation   or  rehabilitation,  the  registrar  of  the               
register shall  be informed  thereof and public notice shall also               
be given.                                                                       
                                                                                
     If  the court institutes bank bankruptcy proceedings:                      
                                                                                
     1) the  bank managing  bodies shall  be  deprived  of  their               
powers. If  the bank  bankruptcy proceedings  are   cancelled the               
bank managing  bodies shall have the right to continue performing               
their functions;                                                                
                                                                                
     2) the  payment  of  all  financial  liabilities,  including               
interest and  taxes as well as their recovery by suing for claims               
or without suit shall be prohibited; also prohibited shall be the               
distribution or  any other  allocation of  bank assets  without a               
special  court  order  except  the  expenses  necessary  for  the               
administrator's activities during the court proceedings; and                    
                                                                                
     3) calculation of interest shall be suspended.                             
                                                                                
     Article 47. Bank Liquidator                                                
                                                                                
     Bank liquidator is the bank manager appointed for the period               
while bankruptcy proceedings  are underway.                                     
                                                                                
     A representative  of a  borrower, the  owner (owners) of the               
bank, shareholders,  a member  of the bank board or bank council,               
the head of the administration or a creditor may not be appointed               
bank liquidator.                                                                
                                                                                
     Bank liquidator must:                                                      
                                                                                
     1)within three  days or  his/her  appointment  transfer  all               
correspondent bank  balances to  the correspondent account at the               
Bank of Lithuania or prohibit making any payments therefrom;                    
                                                                                
     2)   make a  list of  the bank  borrowers and  submit it  to               
court;                                                                          
                                                                                
     3) fix  the currency  value of all foreign currency deposits               
according to  the official  exchange  rate  as  of  the  day  the               
bankruptcy proceeding was instituted;                                           
                                                                                
     4) revalue  all repayable  loans and   assets denominated in               
foreign currency into litas;                                                    
                                                                                
     5) report  on the  progress and results of administration to               
the court  and the  Bank of  Lithuania within the time period and               
according to the procedure determined by them;                                  
                                                                                
     6) upon the approval of the Bank of Lithuania, recommend the               
rehabilitation, reorganisation or liquidation of the bank.                      
The bank  liquidator shall  also have  the right  and perform the               
duties provided  for in  Article  7  of  the  Law  on  Enterprise               
Bankruptcy of the Republic of Lithuania.                                        
                                                                                
     Banks, against  which bankruptcy  proceedings are instituted               
shall be  exempt from  stamp duty  in the  proceedings associated               
with recovery of assets.                                                        
                                                                                
     With  the   institution  of   bankruptcy   proceedings   and               
suspension of  creditors' suits,  creditors (claimants)  shall be               
repaid from the state budget the amounts of the stamp duties they               
paid.                                                                           
                                                                                
                                                                                
     Article 48. Confirmation of the Liquidator's Decisions and                 
               his/her Responsibility                                           
                                                                                
     All decisions  of the liquidator concerning any increases in               
the bank's  debt and  sales   or any  other transfers of the bank               
assets  related   thereto  must  be  confirmed  by  court.  These               
decisions shall be invalid without the above confirmation.                      
                                                                                
     The liquidator  shall be liable for the compensation of  any               
losses  which  result  from  implementing  unconfirmed  decisions               
specified in Par.1 hereof.                                                      
                                                                                
     Article 49. Creditors'  Rights upon Initiation of Bankruptcy               
               Proceedings.                                                     
                                                                                
     Upon initiation  of bankruptcy  proceedings against  a bank,               
creditors shall  have the  right, within  the period  set by  the               
court, which  shall be  not less than 30 days nor more than three               
months from  the initiation  date of  bankruptcy proceedings,  to               
inform the  liquidator of  their financial  claims and to specify               
guarantees for the fulfilment of obligations.                                   
                                                                                
     The court  shall have the right, until the conclusion of the               
case, to  accept the   creditors'  financial claims which, due to               
valid reasons,  were presented  to the liquidator in violation of               
the paragraph above.                                                            
                                                                                
     Article 50. Rehabilitation of a Bank in Bankruptcy                         
                                                                                
     Rehabilitation of a bank in bankruptcy shall be economic and               
financial measures applied with regard to the bank by  the owners               
(shareholders), creditors  of the  banking or third persons in an               
attempt to avoid the bank liquidation.                                          
                                                                                
     Rehabilitation conditions applied to banks in bankruptcy are               
established by  Article 23 of the Law on Enterprise Bankruptcy of               
the Republic of Lithuania.                                                      
                                                                                
     Article 51. Performance of the Bank Liquidator's Functions                 
               during Rehabilitation                                            
                                                                                
     During  the   rehabilitation  the   functions  of  the  bank               
liquidator shall be performed by a liquidator appointed by court.               
                                                                                
     Article 52. Termination and Completion of Bank                             
               Rehabilitation                                                   
                                                                                
     Bank rehabilitation  may be  terminated by a decision of the               
court upon  recommendation of  the liquidator and in coordination               
with the Bank of Lithuania if it proves ineffective or if persons               
who have  undertaken to  carry out  bank rehabilitation  are  not               
fulfilling  their responsibilities.                                             
                                                                                
     Bank rehabilitation  shall be completed by a court decision,               
upon recommendation  of the  liquidator and  in coordination with               
the Bank  of Lithuania  if ,  through the rehabilitation process,               
the bank can settle its own obligations.                                        
                                                                                
     Article 53. Decisions Concerning the Liquidation of Bankrupt               
               Banks                                                            
                                                                                
     The liquidation of a bank by reason of its bankruptcy is the               
cessation of  banking activities  according to  a decision of the               
court, where  creditor claims  are  either  wholly  or  partially               
satisfied from the assets of the bank in liquidation.                           
                                                                                
     The decision to liquidate a bankrupt bank shall be taken if;               
                                                                                
     1) the  reorganisation of  the bank is terminated by a court               
decision;                                                                       
                                                                                
     2) rehabilitation  is not applied to the bank or its process               
is terminated.                                                                  
                                                                                
     A bankrupt  bank may  be liquidated  only three months after               
the day the decision to liquidate the bank was taken.                           
                                                                                
     The real  estate of  the bankrupt  bank shall  be reassessed               
and sold.                                                                       
                                                                                
     The decision  to liquidate  a bankrupt  bank may be appealed               
against according  to the  procedure established  by the  Code of               
Civil Procedure of the Republic of Lithuania.                                   
                                                                                
     It is  held upon the liquidation of a bankrupt bank that the               
term of all its debts and debts owed to it has ended.                           
                                                                                
     Article  54   Order  of   Priority  for  the  Settlement  of               
Creditors' Claims                                                               
                                                                                
     The settlement of creditor claims shall be started only upon               
the courts' decision to liquidate the bank.                                     
                                                                                
     First priority settlements shall be;                                       
                                                                                
     1) secured creditor claims.                                                
                                                                                
     2) salary  of  the  court  appointed  liquidator  and  other               
expenses associated with the carrying out of his/her functions.                 
                                                                                
     3) work-related bank employee claims.                                      
                                                                                
     Secondary depositor  claims shall be the demands of physical               
persons for deposits or a part thereof not exceeding Lt 5,000.                  
                                                                                
     Secondary claims  shall be  satisfied only   after the first               
priority claims are satisfied.                                                  
                                                                                
     Tertiary claims  are other  creditors and  depositors if the               
deposit or its part is over Lt 5,000.                                           
                                                                                
     Tertiary creditor  claims shall  be    satisfied  only  when               
secondary claims are satisfied.                                                 
                                                                                
     If the resources of a bank are insufficient to fully satisfy               
the respective  priority category  of claimants then their claims               
shall be  satisfied proportionately  according  to  the  size  of               
claim.                                                                          
                                                                                
                  CHAPTER 11. FINAL PROVISIONS                                  
                                                                                
                                                                                
     Article 55. Amendments  to the Statutes (Bylaws) of                        
               Operating Banks and Reorganisation of Activities                 
                                                                                
     The procedure  for amending  the operating  banks'  statutes               
(bylaws) and  reorganising   their activities  in accordance with               
this Law  as well  as the time period thereof shall be determined               
by the Bank of Lithuania, unless this Law provides otherwise.                   
                                                                                
     The question  of the  emergence of  property rights  to  the               
dividend in  the case of persons who have paid for the subscribed               
for shares  of the  new issue  prior to the coming into effect of               
this Law  shall be decided by the shareholders' meeting, provided               
that the  subscription agreements  to the  bank share  of the new               
issue do  not  provide  for  the  compensation  for  cash  and/or               
property contributions (as payment for shares).                                 
                                                                                
     The Bank  of Lithuania in conjunction with the Government of               
the Republic  of Lithuania  shall establish  by 1  April 1995 the               
procedure for  implementing Par.  3 of Article 31 of this Law and               
shall determine  the amounts in cash  deposited with the bank and               
paid out  by the  bank whereof  notice must  be given  to the law               
enforcement institutions.                                                       
                                                                                
     The state-owned  preference shares issued by the banks prior               
to the  day of  coming into effect of this Law shall be converted               
into  ordinary  bearer  shares.  On  the  recommendation  of  the               
Government of  the Republic  of Lithuania  or the respective bank               
                                                                                
board   the related  amendments  to  the  statutes  (bylaws)  may               
registered without convening the shareholders' meeting.                         
                                                                                
     Article 56. Declaring Certain Legal Acts Invalid                           
                                                                                
     The following legal acts shall be declared invalid:                        
                                                                                
     Law on  Commercial (Joint-stock)  Banks of  the Republic  of               
Lithuania (řin., 1992 No. 24-696; 1994, No. 43-775, No. 55-1048);               
                                                                                
     The Provisional Law of the Republic of Lithuania "Concerning               
the Institution  of Commercial  Bank Bankruptcy  Proceedings  and               
Peculiarities of  the Court Investigation Procedure" (řin., 1994,               
No. 59-1154);                                                                   
                                                                                
     The Resolution  of the  Supreme Council  of the  Republic of               
Lithuania "Concerning  the Procedure  of  Entry into Force of the               
Law of  the Republic  of Lithuania  On  Commercial  (Joint-Stock)               
Banks"  (řin., 1992 No. 24-697);                                                
                                                                                
     Item 2  of the  Supreme Council of the Republic of Lithuania               
Resolution "Concerning  the Authorisation  of the  Government  to               
Decide on Certain Issues" No. I-2928  of October 6, 1992.                       
                                                                                
     I promulgate  this Law  passed by the Seimas of the Republic               
of Lithuania.                                                                   
                                                                                
                                                                                
                                                                                
President of the Republic                     Algirdas Brazauskas