Official translation               
                                                                                
                REPUBLIC OF LITHUANIA                                           
                               LAW                                              
                               on                                               
                      THE BANK OF LITHUANIA                                     
                                                                                
                    1 December 1994 No.I-678                                    
                                                                                
                  CHAPTER I. GENERAL PROVISIONS                                 
                                                                                
                                                                                
     Article 1. The Bank of Lithuania                                           
     The Bank of Lithuania is the central bank of the Republic of               
Lithuania, belonging  by  the right of ownership  to the State of               
Lithuania.                                                                      
     The Bank of Lithuania shall be established and liquidated by               
the Seimas of the Republic of Lithuania.                                        
                                                                                
     Article 2. Legal Status of the Bank of  Lithuania                          
     The Bank of Lithuania is a legal person.                                   
     The Bank  of Lithuania  shall have  a seal bearing the state               
emblem  of  Lithuania  and  words  "Lietuvos  bankas"  ("Bank  of               
Lithuania").                                                                    
     The headquarters  of the Bank of Lithuania shall be based in               
Vilnius.                                                                        
     The  State   of  Lithuania  shall  not  be  liable  for  the               
obligations of  the Bank  of Lithuania, and the Bank of Lithuania               
shall  not  be  liable  for  the  obligations  of  the  State  of               
Lithuania, except  in cases  where the  Bank of Lithuania assumes               
such liability or when such liability of the Bank of Lithuania is               
established by the laws of the Republic of Lithuania.                           
     The Bank  of Lithuania  shall be  held  accountable  to  the               
Seimas of the Republic of Lithuania.                                            
                                                                                
     Article 3. Independence of the Bank of Lithuania                           
     In implementing the objectives established to it by this Law               
and carrying  out its  functions, the  Bank of Lithuania shall be               
governed  by  the  Constitution  and  laws  of  the  Republic  of               
Lithuania and  shall be  independent from  the Government  of the               
Republic  of   Lithuania  and  other  institutions  of  executive               
authority.                                                                      
                                                                                
.    Article 4. The Institutions of the Bank of Lithuania                       
     The Bank  of Lithuania  shall have  the right  to  establish               
branches, affiliates  and other   institutions and enterprises to               
carry out its functions.                                                        
                                                                                
     Article 5. Foreign Relations of the Bank of  Lithuania                     
     The Bank of Lithuania shall represent the State of Lithuania               
in the  central banks  of  foreign  countries,  in  international               
banks, and in other international financial institutions, as well               
as at  international conferences  (councils)  on  the  issues  of               
monetary, foreign exchange, and credit policy.                                  
     The Bank  of Lithuania may be a shareholder in international               
and foreign  institutions provided  that this  is related  to the               
improvement of  the policy  of national  currency,  international               
credit and  settlements, and the implementation of the objectives               
of the Bank of Lithuania.                                                       
                                                                                
     Article 6. The Exclusive Right of  the Bank of  Lithuania to               
               Issue Currency                                                   
     Only the Bank of Lithuania shall have the exclusive right to               
issue currency.  Implementing the  right, the  Bank of  Lithuania               
shall:                                                                          
     1)  establish   the  denominations,   the  form,   and   the               
distinctive security  and solvency  features  of  said  currency,               
organise the  production of banknotes, buy litas and centas coins               
from the  Ministry of  Finance at  nominal  value,  organise  the               
transportation and  storage of money, establish the procedure for               
removing worn and damaged currency from circulation and replacing               
said currency,  make up currency reserve funds, and establish the               
procedure for examining banknotes;.                                             
     2) in  accordance with the procedure established by  law put               
into circulation  and   withdraw from circulation currency of the               
Republic of  Lithuania. The  Bank of  Lithuania may also withdraw               
from circulation banknotes and coins replacing said currency. The               
Bank  of   Lithuania  shall   establish  the  procedure  for  the               
withdrawal of  currency and shall announce said procedure  to the               
public.                                                                         
                                                                                
     Article 7. The Principal  Objective of the Bank of Lithuania               
     The principal objective of the Bank of Lithuania shall be to               
achieve stability of currency of the Republic of Lithuania                      
     Implementing the  principal objective, the Bank of Lithuania               
must:                                                                           
     1) ensure  the reliable  functioning of  the currency market               
and the system of credit and settlements; and                                   
     2) support the economic policy carried out by the Government               
of the  Republic of  Lithuania, provided  that said  policy is in               
compliance with  the principal objective of the Bank.                           
                                                                                
     Article 8. The Functions of the Bank of Lithuania                          
     Implementing its  objectives, the  Bank of  Lithuania  shall               
perform the following basic functions:                                          
     1) shall  put into circulation and withdraw from circulation               
the currency of the Republic of Lithuania;                                      
     2) may  service the  accounts of  the bodies  of power   and               
government of the Republic of Lithuania; and                                    
     3) shall organise the sale and purchase of domestic bonds of               
the Government  of the  Republic  and  the  payment  of  interest               
thereon, and act as the registrar of Government bonds;                          
     4)  shall   implement,  in  accordance  with  the  procedure               
established by  law,   the    monetary  policy  by  managing  the               
circulation of  currency and  credit using open market operations               
and other means;                                                                
     5) shall  advise the  Government  on  the  issues  of  money               
market, credit and settlements;                                                 
     6) shall  accumulate and  announce  monetary  and  financial               
statistics;                                                                     
     7) shall  control   compliance with   the  foreign  exchange               
regime;                                                                         
     8) shall  protect and  manage the  state reserves of foreign               
exchange,  gold and other precious metals;                                      
     9)  shall   establish  the   procedure  for   domestic   and               
international payments,  including clearings,  between banks  and               
other economic entities;                                                        
     10) shall  issue and  revoke licenses  of the  banks of  the               
Republic of  Lithuania and foreign banks, as well as other credit               
institutions in  the Republic  of Lithuania  and  supervise their               
activities;                                                                     
     11) shall  act, in accordance with the procedure established               
by law,  as the last source of liquidation and credit in the bank               
system;                                                                         
     12) shall organise a banking information system;                           
     13)  shall   establish   the   accounting,   reporting   and               
accountability of banks and other credit institutions licensed in               
the Republic of Lithuania; and                                                  
     14) shall draw up the balance of payments of the Republic of               
Lithuania.                                                                      
                                                                                
     Article 9. Legal Acts of the Bank of Lithuania                             
                                                                                
     The Bank  of Lithuania  shall issue  legal acts  within  the               
limits of its jurisdiction.                                                     
                                                                                
             CHAPTER II. ORGANISATION AND MANAGEMENT                            
           OF THE ACTIVITIES OF THE BANK OF LITHUANIA                           
                                                                                
     Article 10. The Board of the Bank of Lithuania                             
     The Bank  of  Lithuania  shall  be  governed  by  the  Board               
                                                                                
of the  Bank, which  shall be  comprised of a chairperson, deputy               
chairpersons (3), and members (10).                                             
     The Chairperson,  deputy chairpersons,  and members  of  the               
Board of the Bank of Lithuania must be citizens of   the Republic               
of Lithuania  only.                                                             
     The President of the Republic, or members of the Seimas, the               
Government and  members of  boards or  councils of  other  credit               
institutions, may not be the Chairperson, deputy chairpersons and               
members of the Board of the Bank of Lithuania.                                  
     The Chairperson  of the Bank of Lithuania shall be appointed               
for   a term  of 5  years and his or her salary shall be fixed by               
the Seimas  of the  Republic of Lithuania upon the recommendation               
of the President of the Republic.                                               
     The deputy  chairpersons and the members of the Board of the               
Bank of  Lithuania shall  be appointed  for a term of  9 years by               
the President  of the Republic of Lithuania on the recommendation               
of the Chairperson of the Board of the Bank of Lithuania.                       
     The Board  of the  Bank of Lithuania, except the Chairperson               
and one  deputy chairperson,  shall be renewed by one third every               
three years.                                                                    
                                                                                
     Article 11. The Main Functions of the Board of the Bank of                 
               Lithuania                                                        
     The Board of the Bank of Lithuania shall:                                  
     1) establish  and approve  the forms, methods and procedures               
of the  monetary policy  of the  Republic of Lithuania, including               
the tasks of operations performed by the Bank of Lithuania in the               
open market,   discount  rates and  credit interest   rates,  the               
size of  reserve requirements,  the procedure  for holding credit               
and deposit auctions, and for  granting specific loans;                         
     2) determine and approve prudential and reserve requirements               
for banks;                                                                      
     3) adopt legal acts;                                                       
     4) resolve  issues concerning  the participation of the Bank               
of Lithuania in foreign and international organisations;                        
     5) resolve  questions of currency  emission and other issues               
related thereto and denoted in Article 6 of this Law;                           
     6) establish  and liquidate   branches, affiliates and other               
institutions and  enterprises of  the Bank  of Lithuania to carry               
out its functions;                                                              
     7) approve the staff, structure, and work regulations of the               
Board;                                                                          
     8) apply  sanctions provided  for by laws to banks and other               
credit institutions;                                                            
     9) approve  the Bank's annual budget, financial reports, and               
other reports  provided for in this Law;                                        
     10)  resolve   issues  concerning  the  utilisation  of  the               
property and funds of the Bank of Lithuania;                                    
     11) approve the terms and conditions of domestic and foreign               
loans received  by  the  Bank  of  Lithuania  from  international               
financial institutions;                                                         
     12) issue  and revoke  licenses for  banks and  other credit               
institutions;                                                                   
     13) settle  the issues  provided for in item 11 of Article 8               
of this Law; and                                                                
     14) determine the salaries of deputy chairmen and members of               
the Board of the Bank of Lithuania.                                             
     The Board  of  the  Bank  of  Lithuania  may  authorise  the               
chairperson of the Board to carry out a portion of its functions,               
except the functions established by items 1,2,4,5,8,9,10,11,12,13               
and 14 of Par. 1 hereof..                                                       
                                                                                
     Article 12. Dismissal of Members of the Board of the Bank of               
               Lithuania.                                                       
     A Board  member of  the Bank of Lithuania shall be dismissed               
prior to  the expiration  of his  or her term if he or she  loses               
citizenship of  the Republic of Lithuania or becomes President of               
the Republic or member of the Seimas or the Government.                         
     A member  of the  Board of the Bank of Lithuania may only be               
dismissed prior to the expiration of  his  or her term  if:                     
     1) it  becomes clear  that he  or she is not able to perform               
his or her duties properly due to health problems;                              
     2) a  court decision concerning the conviction of the member               
of the Board for a deliberate crime becomes valid;                              
     3) he  or she  becomes a  member of   councils  or boards of               
banks  or  other  credit  institutions,  with  the  exception  of               
participation in  the management of international credit agencies               
or institutions the member whereof is the Republic of Lithuania.                
                                                                                
     Article 13. Resignation of the Members of the Board of the                 
               Bank of Lithuania                                                
     The Chairperson   of  the Board of the Bank of Lithuania may               
resign from his or her post upon submitting a resignation request               
to  the   President  of   the  Republic   of  Lithuania;   deputy               
chairpersons and  members of  the Board  must submit  resignation               
requests  to  the  Chairperson  of  the  Board  of  the  Bank  of               
Lithuania.                                                                      
     Resignation requests  submitted by  the Chairperson shall be               
considered by  the Seimas;   requests  of deputy chairpersons and               
members of  the Board shall be considered by the President of the               
Republic.                                                                       
     Decisions concerning  resignation shall  be adopted within a               
month of receipt of the corresponding request.                                  
     If a decision is not adopted, the person shall be considered               
to have  resigned after  one month  from the day of filing of the               
request.                                                                        
                                                                                
     Article 14. Meetings of the Board of the Bank of  Lithuania                
     Meetings of the Board of the Bank of Lithuania shall be held               
as necessary,  but at  least twice  a month.  The  procedure  for               
arranging meetings of the Board shall be established by the rules               
of the Board of the Bank of Lithuania.                                          
     Board members  shall be informed of meetings, in writing, at               
least two business days in advance of  said meeting.                            
     Meetings of  the Board  of the  Bank of  Lithuania shall  be               
considered to  be valid  if at  least 9  members of the Board are               
present. Decisions  of the  Board  shall  be  adopted  by  simple               
majority vote.                                                                  
     Board meetings  shall be  chaired by  the Chairperson of the               
Board or by one of the deputy chairpersons in accordance with the               
procedure established  by the  rules of  the Board of the Bank of               
Lithuania.                                                                      
     In the  event of  a tie vote, the chairperson of the meeting               
of the Board shall have the  deciding  vote.                                    
     Decisions of  the Board  shall be implemented by resolutions               
thereof, or by the instruction of the Chairperson of the Board.                 
                                                                                
     Article 15. Information of Board Members                                   
     When an  issue to be  resolved during a meeting of the Board               
is related  to the  commercial interest  of a  Board member  or a               
member of  his or  her family,  the Board  member concerned shall               
give notice   thereof  prior to the discussion and shall not have               
the  right   to  participate  therein.  Board  members  shall  be               
considered to have commercial interests if they are shareholders,               
members of  the board  or council of a credit institution or  any               
type of   enterprise,  as well  as   owners, co-owners,  or  part               
owners of an enterprise.                                                        
                                                                                
     Article 16. Work Restriction for Members of the  Board of                  
               the Bank of Lithuania                                            
     The Chairperson,  deputy chairpersons,  and members   of the               
Board of  the Bank  of Lithuania, as well as persons who formerly               
held such  posts, may  not   be members  of boards or councils of               
credit  institutions  until  one  year  has  passed  since  their               
resignation from  their  respective  positions  at  the  Bank  of               
Lithuania.                                                                      
     The Chairperson,  deputy chairpersons  and  members  of  the               
Board of  the Bank  of Lithuania  may only  work in  the Bank  of               
Lithuania; scientific, pedagogical and cultural activities may be               
engaged in upon consent of the Board.                                           
                                                                                
     Article 17. The Chairperson of the Board of the Bank of                    
               Lithuania                                                        
     The Chairperson of the Board of the Bank shall:                            
     1) direct the work of the Bank of Lithuania;                               
     2) represent  the Bank  of Lithuania  in  the  Republic  and               
abroad without  special authorisation  and carry  out all actions               
related thereto;                                                                
     3) conclude  employment contracts  with  staff  members  and               
heads of  the branches,  affiliates and  offices of  the Bank  of               
Lithuania;  encourage   distinguished   employees,   and   impose               
disciplinary punishment;                                                        
     4) approve  the allocation of duties between the Chairperson               
and deputy chairpersons of the Board;                                           
     5) issue authorisations;                                                   
     6) approve  regulations of  the structural  divisions of the               
Bank of Lithuania; and                                                          
     7) execute  other functions  authorised by  the Board of the               
Bank of Lithuania.                                                              
     In the event of the absence of the Chairperson  of the Board               
of the  Bank of  Lithuania, his  or her duties shall be vested in               
one  of  the  deputy  chairpersons  on  the  instruction  of  the               
Chairperson of the Board.                                                       
     The Chairperson  of the  Board of the Bank of Lithuania must               
participate in  the meetings of the Government of the Republic of               
Lithuania with the right of advisory vote.                                      
                                                                                
     Article 18. The Staff of the Bank of Lithuania                             
     The staff  of  the  Bank  of  Lithuania  shall  perform  the               
functions of  the Bank  of Lithuania  provided for  in this  law,               
observing  the   regulations  of   their  appropriate  structural               
division and their employment contract.                                         
     The staff  of the  Bank of  Lithuania may   work only in the               
Bank of  Lithuania, with the exception of cases when the Board of               
the Bank  of Lithuania  gives its consent for outside employment.               
The latter  provision  shall  not  be  applicable  in  the  cases               
provided for in Par. 2 of Article 16 of this Law.                               
     Staff members  of the  Bank of  Lithuania may  not take  out               
loans in  any credit office or institution other than the Bank of               
Lithuania.                                                                      
     The employees  of the  Bank of  Lithuania  may  be  rendered               
financial services according to the procedures and conditions set               
by the Board of the Bank of Lithuania.                                          
                                                                                
     Article 19. Protection of Secrets of the Bank of  Lithuania                
     The Chairperson,  deputy chairpersons  and  members  of  the               
Board of  the Bank  of Lithuania  and its staff must maintain the               
secrecy of  information which is related to the activities of the               
Bank of Lithuania.                                                              
     The Board  of the  Bank of Lithuania shall compile a list of               
information  considered to be a secret of the Bank of Lithuania.                
     Information which  is considered  a secret  of the  Bank  of               
Lithuania may only be disclosed to the institutions determined by               
law and in accordance with the procedure established by law.                    
     For the  disclosure of  information which  is  considered  a               
secret of  the Bank  of Lithuania and for concealment of unlawful               
financial operations  and transactions  the  Chairperson,  deputy               
chairpersons and  members of  the Board  of the Bank of Lithuania               
and its staff  shall be liable in accordance with the established               
legal procedure.                                                                
                                                                                
                                                                                
            CHAPTER III. CAPITAL, INCOME AND EXPENSES                           
                    OF THE BANK OF LITHUANIA                                    
                                                                                
     Article 20. Capital of the Bank of Lithuania                               
     The authorised  capital of the Bank of Lithuania shall be 50               
million litas.                                                                  
     The authorised capital shall be formed from the  state funds               
of the Republic of Lithuania and the allocations of the profit of               
the Bank of Lithuania.                                                          
     The reserve capital of the Bank of Lithuania shall be formed               
from quarterly  allocations  from  the  profit  of  the  Bank  of               
Lithuania. Allocations  shall  be  continued  until  the  reserve               
capital reaches  200 million  litas. Reserve  capital may only be               
used to  cover bank losses. When a part of the reserve capital is               
used to  cover losses, allocations from the profit to the reserve               
capital shall  be carried  out again  until the  reserve  capital               
reaches the  sum of 200 million litas.                                          
                                                                                
     Article 21. Income of the Bank of Lithuania                                
     The income of the Bank of Lithuania shall comprise:                        
     1) interest on foreign exchange reserves kept abroad;                      
     2) interest  on deposits  kept with  other banks  and  loans               
given to banks;                                                                 
     3) income received for the emission of currency;                           
     4) income  received from  operations  in  foreign  exchange,               
precious metals,  and for  securities and  guarantees  issued  in               
accordance with the legal procedure; and                                        
     5) income  received  from  other  operations  which  are  in               
compliance with law.                                                            
                                                                                
     Article 22. Expenses of the Bank of Lithuania                              
     The expenses of the Bank of Lithuania shall constitute:                    
     1) interest  payable on  the deposits of credit institutions               
and deposits  of the staff of the Bank of Lithuania kept with the               
Bank of Lithuania;                                                              
     2) expenses for carrying out operations abroad;                            
     3) interest paid on foreign loans;                                         
     4) expenses  related to  the operations in foreign exchange,               
precious metals and securities and the issue of guarantees;                     
     5) expenses related to the production and issue of banknotes               
and coin  acquisition;                                                          
     6) material values depreciation costs;                                     
     7) operating costs;                                                        
     8) payroll costs;                                                          
     9) other  specific expenses  required for the performance of               
functions of  the Bank  of Lithuania  provided that  they are  in               
compliance with  the law.                                                       
                                                                                
     Article 23.  Profit of the Bank of Lithuania                               
     The profit for each financial year shall be calculated after               
deducting expenses  from the bank income.                                       
                                                                                
     Article 24. Distribution of Profit of the Bank of  Lithuania               
     The profit  of the Bank of Lithuania shall be distributed in               
the following order:                                                            
     1) Fifty percent --  to form the reserve capital of the Bank               
of Lithuania;                                                                   
     2) Twenty  percent --  to form the authorised capital of the               
Bank of Lithuania.                                                              
     The remaining  profit shall  be paid  to the  budget of  the               
Republic of Lithuania by the 1st of May  each year.                             
                                                                                
                                                                                
              CHAPTER IV. MONETARY REGULATION  AND                              
               OPERATIONS OF THE BANK OF LITHUANIA                              
                                                                                
     Article 25.  The Program  of Monetary  Policy of the Bank of               
Lithuania                                                                       
     The Bank  of Lithuania shall prepare and conduct the program               
of monetary policy.                                                             
                                                                                
     Article 26. Open-Market Operations                                         
     In conducting monetary policy, the Bank of Lithuania shall:                
     1) buy  and sell debt instruments (securities) issued by the               
Republic of Lithuania; and                                                      
     2) perform rediscount operations.                                          
     The Bank of Lithuania, pursuant to the procedure set by  the               
Bank, shall  have the  right to  rediscount bills of exchange and               
other debt  instruments, denominated  in litas and payable in the               
Republic of  Lithuania, bearing  the signature  of at least three               
solvent guarantors or warrantors of which at least one shall be a               
bank, and  maturing within  three months  from the date they were               
presented for rediscounting.                                                    
     In exceptional  cases pursuant  to the decision of the Board               
of the Bank of Lithuania, bills of exchange and other obligations               
of commercial  operations    may  be accepted  for  rediscounting               
provided that  they have  a maturity not exceeding six months and               
bear the  signatures of two guarantors and warrantors of which at               
least one is a bank.                                                            
     The Bank  of Lithuania  shall rediscount  bills of  exchange               
without exceeding  the maximum possible rediscount amount of each               
bank; this  limit shall  be calculated  as a  correspondent ratio               
from the registered bank capital.                                               
     The Bank  of Lithuania shall determine, increase or diminish               
the rediscount  limits for  each bank  or shall  entirely  cancel               
rediscount operations.                                                          
                                                                                
     Article 27. Credit Operations                                              
     The Bank of Lithuania may, pursuant to item 11 of Article 8,               
grant according  to the  conditions and  procedure established by               
the Bank,  credit institutions  of the Republic of Lithuania that               
hold reserve requirement with the Bank of Lithuania credits for a               
term of up to 3 months, secured by any of the following assets:                 
     1) international  reserve  funds:  gold,  foreign  exchange,               
including exchange  in their  accounts with foreign banks, drafts               
and bills in foreign exchange;                                                  
     2) debt  instruments in  the national  currency issued   and               
payable  within  the  territory  of  the  Republic  of  Lithuania               
provided that they form part of state emission; and                             
     3) other  securities, debt  instruments, and precious metals               
which the  Bank of  Lithuania has   the  right to  buy  and  sell               
according to this Law.                                                          
                                                                                
     Article 28. Interest Rates                                                 
     The rates  for rediscounts and credit operations of the Bank               
of Lithuania shall be established by the Bank of Lithuania.                     
     Under extraordinary  economic conditions, a maximum interest               
rate  of   credit  and   discount  operations   for  all   credit               
                                                                                
institutions of  the Republic  may be  established by the Bank of               
Lithuania.                                                                      
                                                                                
                                                                                
               CHAPTER V. FOREIGN EXCHANGE REGIME                               
      (ESTABLISHMENT AND REGULATION OF THE EXCHANGE RATE),                      
    INTERNATIONAL RESERVES AND OPERATIONS WITH FOREIGN CREDIT                   
                          INSTITUTIONS                                          
                                                                                
     Article 29. Regulation of Foreign Exchange Operations                      
     The Bank of Lithuania shall:                                               
     1) establish the procedure for carrying out foreign exchange               
operations;                                                                     
     2) grant  licenses for  the execution  of  foreign  exchange               
operations and revoke them when necessary;                                      
     3) establish  maximum open  position in foreign exchange for               
banks and other credit institutions; and                                        
     4) keep and manage foreign exchange reserves of the Republic               
of Lithuania.                                                                   
                                                                                
     Article 30. Settlement Agreements                                          
     The Bank of Lithuania may, on its own behalf or on behalf of               
the Republic of Lithuania, on the instruction thereof, enter into               
clearing and settlement agreements or any other contracts for the               
same purpose  with foreign  states or  private  central  clearing               
institutions domiciled abroad.                                                  
                                                                                
     Article 31. Gold, Convertible Foreign Exchange and other                   
               Universally Recognised International Reserve                     
               Assets                                                           
     The Bank  of Lithuania shall establish, keep  and manage the               
reserves of  the Republic  of Lithuania  which may consist of the               
following assets:                                                               
     1) gold;                                                                   
     2) convertible  foreign exchange in the form of banknotes or               
coins or bank balances held abroad in foreign currencies;                       
     3)  any  other  internationally  recognised  reserve  asset,               
including:                                                                      
          a) the right to make reserve purchases from the   Inter               
national Monetary Fund;                                                         
          b) special drawing rights (SDR) of the International                  
Monetary Fund;                                                                  
          c) bills payable in a convertible foreign exchange; and               
          d)  securities,   including   repurchase   obligations,               
payable in  a convertible  foreign exchange  which are issued and               
guaranteed by  foreign  states,  the  central  banks  of  foreign               
states, or international institutions.                                          
                                                                                
     Article 32. Operations with Foreign Credit Institutions                    
     The Bank of Lithuania shall have the right to:                             
     1) take  credits from  foreign and  international banks  and               
credit institutions;                                                            
     2) grant  credits to  foreign banks and international credit               
institutions;                                                                   
     3) open  accounts,  accept  funds  into  their  accounts  or               
deposits from  central banks  of foreign states and international               
banks, credit institutions and other organisations;                             
     4) open accounts of the Bank of Lithuania in foreign banks;                
     5) be  the guarantor  and issue  letters of guarantee on the               
basis of pecuniary obligations of international organisations and               
foreign and Lithuanian legal persons; and                                       
     6) carry out other international foreign exchange operations               
provided for by law.                                                            
                                                                                
              CHAPTER VI. LICENSING AND SUPERVISION                             
             OF BANKS AND OTHER CREDIT INSTITUTIONS                             
                                                                                
     Article 33. Activities of Credit Institutions                              
     Activities of  credit institutions  -  activities  based  on               
public acceptance  of monetary  resources in  any   form and  the               
lending thereof at the expense of  the institutions.                            
                                                                                
     Article 34. Licensing of Credit Institutions                               
     It shall be prohibited to engage in the activities of credit               
institution without a license of the Bank of Lithuania.                         
     The terms  and conditions  for granting  licenses  shall  be               
established by  the laws  of  the  Republic  of  Lithuania  which               
regulate the  establishment and  activities of  banks  and  other               
credit institutions,  other laws of the Republic of Lithuania and               
legal acts issued by  the Bank of Lithuania.                                    
                                                                                
     Article 35. Formation of Prudential and Reserve Requirements               
               of Banks and other Credit Institutions                           
     The Bank of Lithuania shall establish prudential and reserve               
requirements of  banks and other credit institutions on the basis               
of their  deposits and  other borrowed  funds (liabilities).  The               
amount of  prudential and  reserve requirements  as well  as  the               
procedure for  keeping the  reserves shall  be established by the               
Bank of Lithuania by Board resolutions.                                         
                                                                                
     Article 36. Supervision of the Activities of Banks and other               
               Credit  Institutions                                             
     The Bank  of Lithuania  shall supervise  the  activities  of               
banks and  other credit  institutions which possess a  license of               
the Bank of Lithuania.                                                          
     The Bank of Lithuania shall have the right to :                            
     1) obtain   information necessary for the performance of the               
function of supervision;                                                        
     2) inspect  banks and  other credit  institutions and  their               
subunits, and  examine the  accounts, books,  and other documents               
thereof;                                                                        
     3) issue  rules, instructions and other legal acts, and take               
other measures  necessary to ensure the  efficient functioning of               
the credit system; and                                                          
     4) apply  sanctions provided  for by  this and other laws of               
the Republic  of Lithuania to banks and other credit institutions               
which violate  the laws  and legal  acts passed  by the  Bank  of               
Lithuania, or  when their  chosen risky  manner of activities may               
cause instability in the financial system or affect the interests               
of clients  and depositors,  or when by their activities they are               
seeking to  monopolise certain spheres of the financial system of               
the Republic of Lithuania.                                                      
     Information which  the Bank  of Lithuania obtains from banks               
and other  credit institutions for the purpose of supervision may               
not be  announced publicly  or released  to other institutions of               
state management,  control, or  law and order, except  as in  the               
cases specified by laws.                                                        
     The Bank  of Lithuania  shall  have  the  right  to  examine               
accounts, books and other documents of any economic entity which,               
on the  basis of  information in  the possession  of the  Bank of               
Lithuania, is  engaged in  the activities  of credit institutions               
without a license of the Bank of Lithuania.                                     
                                                                                
     Article 37. Sanctions of the Bank of Lithuania  against                    
               Banks and other Credit Institutions                              
     The Bank  of Lithuania shall have the right to apply against               
banks and  other credit  institutions sanctions prescribed by the               
laws of the Republic of Lithuania.                                              
     The validity of the resolution concerning the application of               
sanctions may be appealed against in court in accordance with the               
procedure established by law.                                                   
                                                                                
     Article 38. Cooperation with the Authorities of Supervision                
               of Credit Institutions of  other States                          
     In carrying  out the  functions of licensing and supervision               
of   banks and  other  credit institutions, the Bank of Lithuania               
shall have the right to:                                                        
     1)  participate   in  the   international  organisations  of               
supervision of banks and other credit institutions;                             
     2) conclude  cooperation agreements  with the supervisors of               
banks and other credit institutions of other states; and                        
     3) exchange  information with supervisors of other states on               
the activities  of any bank or other credit institution, ensuring               
the confidentiality of such information.                                        
                                                                                
            CHAPTER VII. ACCOUNTS, BALANCE-SHEET AND                            
               REPORTING OF THE BANK OF LITHUANIA                               
                                                                                
     Article 39. The Financial Year of the Bank of Lithuania                    
     The financial  year of  the Bank of Lithuania shall begin on               
the first  day of  January and  end on  the thirty-first   day of               
December.                                                                       
                                                                                
     Article 40. Accounting                                                     
     The Bank  of Lithuania shall carry out accounting of assets,               
liabilities, and  operations in  accordance with  the  accounting               
procedure.                                                                      
     The annual  financial statements  shall include  a  balance-               
sheet, a  profit and  loss account,  and notes  to the  financial               
statements.                                                                     
                                                                                
     Article 41. Control of the Activities and  Audit of the                    
               Accounts of the Bank of Lithuania                                
     State control  institutions shall  monitor lawful management               
and use of state property.                                                      
     The Seimas  of  the  Republic  of  Lithuania  shall  appoint               
auditors to   audit  the financial statements and accounts of the               
Bank of Lithuania.                                                              
                                                                                
     Article 42. The Annual Statement of the of the Bank of                     
               Lithuania                                                        
     The Bank  of Lithuania  shall, within  four months after the               
close  of  each  financial  year,  submit  the  annual  financial               
statement to the Seimas.                                                        
                                                                                
     Article 43. Reporting on the Implementation of Basic                       
               Objectives by the Bank of Lithuania                              
     The Bank  of Lithuania  shall semi-annually  present to  the               
Seimas of the Republic of Lithuania a report on its activities.                 
                                                                                
                                                                                
                 CHAPTER VIII. FINAL PROVISIONS                                 
                                                                                
     Article 44. Preferential Right of the Bank of  Lithuania                   
     The Bank  of Lithuania  shall have the preferential right to               
satisfy its  claims by   using all of the borrower's funds in the               
accounts with  the Bank  of Lithuania, as well as the securities,               
precious metals  and other  assets deposited for safekeeping with               
the Bank  of Lithuania  or pledged by the borrower to the Bank of               
Lithuania, with the exception of required reserves.                             
     The Bank of Lithuania shall have the right to debit, without               
suit,   funds to  the accounts of the borrowers who fail to repay               
the loan  and fail  to pay  the  interest  thereon  by  the  time               
specified in the loan agreement.                                                
                                                                                
     Article 45. Tax Exemption of the Bank of Lithuania                         
                                                                                
                                                                                
     The Bank of Lithuania shall be exempt from all national  and               
local taxes, with the exception of payments provided for by Par.2               
of Article 24 of this Law.                                                      
                                                                                
     Article 46. Receiving Information                                          
     The Bank  of Lithuania  shall have the right to receive from               
the  Government  of  the  Republic  of  Lithuania  financial  and               
economic information  necessary for  the performance  of  banking               
functions.                                                                      
                                                                                
     Article 47. Publication of the Data of the Bank of                         
               Lithuania                                                        
     The Bank  of Lithuania  shall issue information bulletins on               
its activities at least once  a month.                                          
                                                                                
     Article 48. Validity of the Law                                            
     The Law  shall be  valid to  the extent  it is in compliance               
with the  Law on  the Credibility  of Litas  of the  Republic  of               
Lithuania.                                                                      
                                                                                
     Article 49. Procedure for Coming into Effect of Article 10                 
               of this Law                                                      
     The procedure  established in Pars. 5 and 6 of Article 10 of               
this Law  shall not  apply to  deputy chairpersons and members of               
the Board  who are  appointed prior  to the coming into effect of               
this Law.                                                                       
     When the  first appointments are made in accordance with the               
procedure established  by this  Law, one  deputy chairperson  and               
three members  shall be  appointed for  a three years, one deputy               
chairperson and  three members  - for  six years,  and one deputy               
chairperson and four members - for nine years.                                  
                                                                                
     Article  50. Declaring Certain Legal Acts Invalid                          
     Upon the coming into effect of this Law, the following legal               
documents shall be repealed:                                                    
     1) Law of the Republic of Lithuania on the Bank of Lithuania               
of February  13, 1990 (řin., 1990, No.7-172; 1992 No. 29 (1)-855,               
1993 No. 16-402, No. 58-1115).                                                  
     2) September  4, 1990  Resolution No.  1-522 of  the Supreme               
Council of  the Republic  of Lithuania  "On the Statute and Fixed               
Capital of  the Bank  of Lithuania"  (řin., 1990 No. 27-636, 1993               
No. 31-711);                                                                    
     3) The  Statute of the Bank of Lithuania (řin., 1990 No. 27-               
636, 1992 No. 24-709, 1993 No. 16-405, No.58-1118).                             
                                                                                
     I promulgate  this Law  passed by the Seimas of the Republic               
of Lithuania                                                                    
                                                                                
                                                                                
                                                                                
President of the Republic                    Algirdas Brazauskas