The Bank of Lithuania was established in 1922, but the first ideas of establishing a central state bank emerged a lot earlier. Some attempts at establishing a bank started very early, in the Grand Duchy of Lithuania, but these were all private initiatives. In Western Europe, private banks also operated during the Middle Ages and the Early Modern Period. Therefore, the idea of the Grand Duke of Lithuania Stephen Báthory (1576-1586) to establish a state bank in Vilnius was very interesting. A project to establish this bank was under preparation.
It was most likely planned to be named the Bank of Lithuania because its project was named “The Project to Establish the Bank of Lithuania”. A special land fund was planned for credit affairs. For three years, Lithuania had to deposit to it 8 grosz for each volok, 2 grosz for horticulturists and 0.5 grosz for every residential building in towns. The Grand Duke was supposed to supplement this sum with profit gained from coin mintage. The fund comprised in this manner was supposed to be used to pay representatives that were sent to the joint Seimas of Poland and Lithuania. The remaining money would be lent to Lithuanian residents for interest, 2/10 of a grosz per week from a threescore of grosz (around 10.4% a year). Borrowing was only allowed by mortgaging real estate. Borrowing money from individuals with high interest rates was strictly forbidden. Therefore, bank credit was in general inaccessible to serfs, peasants and common people.
However, this project was not completed (probably due to Stephen Báthory’s early death). Only 180 years later, in 1768, the Sejm of the Polish–Lithuanian Commonwealth decided to establish a state bank to issue notes.
