Keystone Law advises creditor on claim in administration of UAB Payrnet

Keystone Law’s financial services partners Simon Deane-Johns and Simon Jackson are advising a creditor involved in the administration of UAB Payrnet. This failed e-money institution was formerly a subsidiary of failed Railsbank Technology Ltd and host of the old EU-based Wirecard prepaid programmes. The case has been the subject of a Regulatory Intelligence report, published by Thomson Reuters.

A key issue in the Lithuanian administration proceedings is whether the ‘asset pool’ available to the administrator of UAB Payrnet extends to money held with Payrnet Ltd, a UK e-money institution in the Railsbank group.

According to the Lithuanian regulator, UAB Payrnet appears to have held its customer funds with Payrnet Ltd under a controversial ‘intra-group’ arrangement. “Instead of keeping the funds in a dedicated account of a credit institution or central bank, it kept funds at another electronic money institution,” the Bank of Lithuania said, according to the Thomson Reuters report.

The former group’s parent company, Railsbank Technology Ltd, entered administration in 2023. In March of that year, an arranged ‘pre-pack’ arrangement saw the FCA approve the change in control over Payrnet Ltd to a newly funded parent, Embedded Finance Ltd. UAB Payrnet was omitted from that deal and was then under restrictions imposed by the Lithuanian regulator. Its e-money authorisation was later revoked by the Bank of Lithuania.

The administrator’s case is being heard in Vilnius County Court in Lithuania, with an initial decision expected on 8 July 2024.

Simon Deane-Johns said:

“The rarity of an electronic money institution abandoned to its fate in the insolvency courts highlights the significance of this case for not only creditors concerned, but also the safeguarding structures of prepaid card programmes throughout Europe and the UK.

“The asset pool available to the administrator should include both relevant funds that were appropriately safeguarded, as well as sums equal to relevant funds that should have been – but were not – safeguarded in compliance with the regulations implementing the E-money Directive.”

To read an analysis of the issues raised in this case, click here.

Read More:

What are SWIFT/BIC codes, and what do they mean?
Swift codes are handled by the SWIFT organization, and in particular from a division called “SWIFT Standards”. SWIFT stands for “Society for Worldwide Interbank Financial Telecommunication” and is a member-owned cooperative that is used by the financial world to conduct business operations. These codes were initially referred to as “swift codes” but were later standardized as BIC which stands for “Business Identifier Codes”. Both terms are used today and mean exactly the same thing: a BIC code is a unique alphanumeric identification code, consisting of combinations of letters and numbers, which is used to uniquely identify an institution's branch among the members of the swift network.

Why do I need this code?
The swift code is usually required by web banking applications for money transfers between two different banks (that are members of the swift network). We are not only asked to provide the beneficiary’s bank account number (or IBAN account number) that we want to send money to, but we must also provide the exact BIC code of the branch of the beneficiary’s bank. This site aims to simplify the process of finding this code. Note: please read our disclaimer at the bottom of this page BEFORE using any of the information found on this site.

The downside of international transfers with you bank:
Banks use SWIFT for international transfers, but it's not the most efficient or cost-effective solution. When you receive or send a wire transfer internationally with your bank, you might get a bad exchange rate, and pay high hidden fees as a result. We recommend using HUBFX, to get a great rate and low, transparent fee every time. Learn more.

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Understanding the code:
A swift code consists of 11 or 8 characters, which is the standard format standardized by ISO (International Organization for Standardization). Here is an example code: CHASUS33XXX. This swift code is for the head offices of “JPMORGAN CHASE BANK, N.A.” in the U.S.A. and can be broken down to four parts:

CHAS - US - 33 - XXX

- First four characters: These 4 characters (“CHAS” in our example) identify the bank (“JP Morgan Chase”). This 4-letter code is used to identify this particular financial institution’s branches and divisions all over the world.
- Fifth and sixth characters: These 2 characters identify the country in which the bank is located. “US” in this example means “UNITED STATES”.
- Seventh and eighth characters: These 2 characters represent a location code (“33” in this example).
- Last three characters: These 3 characters form the branch code. “XXX” is used to identify the HEAD OFFICE or the institution, but this particular branch code is optional, and if omitted, the 8-character remaining code (“CHASUS33” in our example) is assumed to refer to the head office (primary office) of the institution.

Most requested SWIFT codes:

CHASUS33 CHASUS33XXX JPMORGAN CHASE BANK, N.A.

BOFAUS3N BOFAUS3NXXX BANK OF AMERICA, N.A.

MIDLGB22 MIDLGB22XXX HSBC BANK PLC

BARCGB22 BARCGB22XXX BARCLAYS BANK PLC

ABNANL2A ABNANL2AXXX ABN AMRO BANK N.V.

CITIUS33 CITIUS33XXX CITIBANK N.A.

WFBIUS6S WFBIUS6SXXX WELLS FARGO BANK, N.A.

NWBKGB2L NWBKGB2LXXX NATIONAL WESTMINSTER BANK PLC

COBADEFF COBADEFFXXX COMMERZBANK AG (BANKING COMMUNICATION SYSTEM)

BNPAFRPP BNPAFRPPXXX BNP PARIBAS SA (FORMELY BANQUE NATIONALE DE PARIS S.A.)

POALILIT POALILITXXX BANK HAPOALIM B.M.

LOYDGB2L LOYDGB2LXXX LLOYDS BANK PLC

NTSBDEB1 NTSBDEB1XXX N26 BANK GMBH (Used for NUMBER26 bank accounts)

DEUTDEDBPAL DEUTSCHE BANK PRIVAT-UND GESCHAEFTSKUNDEN AG (DEUTSCHE BANK VIRTUAL ACCOUNTING)

AXISINBB002 AXIS BANK LIMITED

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