OREANDA-NEWS. September 09, 2009. The German branch of Parex Bank has been authorised by the German federal financial services oversight institution to extend those client deposits which have expired and are affected by expenditure limitations identified by the Finance and Capital Markets Commission. Term deposits can be extended for a period that does not exceed six months. If a client wishes to extent a term deposit, then the bank must offer the client complete information about the bank’s financial situation and the limitations that have been placed upon it, reported the press-centre of Parex Bank.

This regulatory authorisation in Germany is important for Parex Bank, because it makes it possible to maintain the overall deposit portfolio at the German branch at its current level. Previous regulatory limitations in Germany stated that all deposits which expired had to be paid out to clients within the boundaries of permitted limits, doing so on the first date of each month. These deposits could not be extended. The permission to extend existing deposits has allowed the German branch to preserve EUR 1.2 million that otherwise would have been paid out to clients at the beginning of September 2009.

Late in 2008, the Latvian Cabinet of Ministers and the Finance and Capital Markets Commission (FCMC) decided that as of 1 December of that year, Parex Bank would face limitations related to its obligations so as to protect capital sufficiency and liquidity. That happened after, on November 8, the Bank was taken over by the Government by virtue of a Cabinet of Ministers resolution, after which it received the state aid which it needed. After this, the relevant institutions in Germany declared a ban on new deposits at the German branch of Parex Bank.

The limits set by the FCMC also affect deposits that were made at the bank prior to 1 December, 2008. Both natural persons and legal entities now have a maximum level of debit operations each month. Legal entities also face other conditions – only those payments which are in accordance with their economic operations are accepted. As of 8 June, 2009, legal entities have been allowed to make payments without monitoring of economic activities to the amounts exceeding the client’s overall account balance as of 8 June, 2009.

On 18 August 2009, the FCMC allowed Parex Bank to begin issuing credit cards with credit limits under the auspices of its sales and marketing strategy in 2009 for the provision of American Express credit cards.

Parex Bank opened a branch in Berlin in October 2005. Two years later, in August 2007, it opened a client service centre in Hamburg. In June 2008, a client service centre was also opened in Munich. Currently, Parex Bank employs 23 people in Germany. It is important to note that Parex Bank participates in the deposit guarantee fund of the German Banking Association, which means that the guaranteed sum for each depositor in Germany is EUR 1.5 million. The Parex Bank branch and client service centres offer German clients term deposits, savings accounts, and Internet banking services.