OREANDA-NEWS. September 17, 2012. Between 7 December 2012 when bankruptcy proceedings began and 28 August 2012, the bankruptcy administrator of BAB Bankas Snoras and his team have collected LTL 564 million payments from the bank’s loan holders which will be used for the benefit of creditors, reported the press-centre of BAB Bankas Snoras. 

The loan book represents a major asset of the bank and the Bankruptcy Administrator and his team continue to work hard so loan holders can make repayments according to their payment schedules.

The issue of set off has been an important one to the bankruptcy process and at the time of appointment, set off was prohibited under the Lithuanian bankruptcy legislation. This meant that if a customer had deposits totalling LTL 50,000 and a loan of LTL 100,000 for example, the customer was still obliged to pay the full amount of the LTL 100,000 loan but the LTL 50,000 was not available to offset against the loan, something you would typically expect in other European Union states.

The Lithuanian Government moved to introduce a new provision to address this issue and introduced new Banking Laws to allow partial set off in certain circumstances from 1 January 2012. This partial set off was limited to the LTL 345,280 or €100,000 and applied as loan obligations matured.

The allowing of partial set off has had a significant impact the loan book. 49,908 customers with loans and deposit accounts at the Bank and eligible for set off received set off credits totalling LTL 48 million.

Commenting on the loan book, Neil Cooper, Bankruptcy Administrator said:
“As a result of the introduction of the new law regarding set off, all customers eligible for set off credits have now received them.  We continue to manage the loan book to ensure customers service their loans in accordance with their obligations. We are, like any responsible bank, willing to talk to customers experiencing financial difficulties to find an appropriate solution where possible.”