From the day of the accession of the Republic of Croatia to the European Union, payment service providers in the Republic of Croatia may also be electronic money institutions established in another Member State of the European Union.
An electronic money institution established in another EU Member State may, under the conditions regulated by the Electronic Money Act, issue electronic money and/or provide payment services using the right of establishment or the freedom to provide services, after the competent authority the home Member State shall inform the Croatian National Bank thereof.
In November 2020, the CNB received a notification from the competent authority of the home Member State on the intention to directly provide services in the territory of the Republic of Croatia in which the institution was issued, ie Lietuvos banks (Bank of Lithuania) from Lithuania for Revolut Bank UAB.
It informed the CNB that Revolut Bank UAB will start providing mutually recognized services in the Republic of Croatia, but only those listed in Directive 2013/36 / EU – receiving deposits and other repayable funds, while other services from Directive 2013/36 / EU (including payment services) will not and must not provide.
Payment services are defined in Article 4 of the Payment Transactions Act and include opening and maintaining payment accounts. According to this law, payment accounts are accounts maintained by a payment service provider on behalf of one or more payment service users used by payment service users to execute payment transactions. A current account or giro account is a type of payment account.
Insight into the business conditions of the credit institution Revolut Bank UAB is described as a deposit account to which the user can store money and withdraw it solely based on his request. In these business conditions, Revolut Banka UAB points out that it is not authorized to provide payment services and that only the user can deposit money into and make payments from it. The only method of payment and withdrawal from that deposit account is through the transfer that the user makes from the electronic money account he has opened in Revolut Payments UAB.
Information on direct service notifications for Revolut Bank UAB and Revolut Payments UAB is publicly available on the CNB’s website in the List of institutions exercising freedom of establishment and freedom to provide services and the List of payment institutions, electronic money institutions, and registered service providers account information from the other Member States.
Therefore, Revolut Bank UAB is not allowed to open and maintain payment accounts, such as a current account or giro account, but collects its clients’ deposits to a deposit account. By concluding a contractual relationship with Revolut Bank UAB, Revolut Payments UAB’s clients have a deposit account with a credit institution (Revolut Bank UAB) and a payment account with an electronic money institution (Revolut Payments UAB).
It should be noted that the supervision of an electronic money institution, which directly provides services in the Republic of Croatia, is carried out by the competent authority of the home Member State in which the institution was issued, ie Lietuvos Bankas (Bank of Lithuania) for Revolut Payments UAB. The right to cross-border provision of services in the European Economic Area applies to all licensed payment service providers and electronic money issuers, including institutions established in the Republic of Croatia.
It is important to note that deposits collected from the credit institution Revolut Bank UAB would be included in the deposit insurance system in the Republic of Lithuania, and not in the Republic of Croatia. The mentioned funds of Revolut Bank UAB clients that are in their payment accounts in Revolut Payments UAB are not subject to deposit insurance. This is indicated in the general terms and conditions of Revolut Bank UAB.
You can read the originally published press release HERE.
