Act on the National Bank of Slovakia and the Banking Act

(Act No. 149/2001 Coll. amending and supplementing the Act of the National Council of the Slovak Republic No. 566/1992 Coll. on the National Bank of Slovakia, as amended and the Act No. 21/1992 Coll. on Banks, as amended)

The amendment to the Act on the National Bank of Slovakia (the "Act") specifies in more details some definitions used in the Act. Within the adopted amendment, also the provisions on issue of banknotes, coins, commemorative coins and commemorative bank-notes, rules of acceptance of bank-notes and coins, rules of provision of substitutes for damaged bank-notes and coins, and rules of production of reproductions and imitations of bank-notes, coins and securities were added to the Act, which had been up to now covered only by, without more detailed basic regularisation, regulations of the former Czecho-Slovak State Bank. The amendment further gives more details about trades of the National Bank of Slovakia (the "NBS") with other banks, trades of NBS with the Slovak Republic and position of bank supervision.

Pursuant to the amendment to the Act, NBS is entitled to do businesses of all kinds with other banks, foreign banks and other financial institutions. NBS can buy from, or sell to, banks: (a) notes payable within six months from the date of their purchase by NBS, containing at least two signatures, of which at least one signature is on behalf of the bank, and (b) governmental bonds or other securities with state guarantee, which can be hold by NBS for one year at maximum. NBS can provide banks with loans, secured by the above stated securities (notes, government bonds or other securities), for a period not longer than six months and accept loans secured by the securities from the banks. In order to retain the liquidity of a bank, NBS can exceptionally provide the bank with a short-term loan for a maximum period of three months. In case of introduction of forced administration over a bank, NBS can provide the bank with loans according to the special act for a period of six months maximum.

NBS can also provide the Deposit Insurance Fund with loans for an unlimited period of time.

In order to regulate the money market, NBS is entitled to issue short-term securities with a maturity period up to one year and publicly tradeable securities and trade in them.

NBS is also entitled to manage term deposit accounts for its clients.

The amendment to the Act introduces a new organisation of NBS, on the basis of which NBS consists of: (a) head office, (b) branches, and (c) organisational units having special purposes. The supreme body of NBS is the Bank Board of NBS. NBS is represented by its governor. The amendment to the Act has cancelled the Directorate of NBS, which was the executive body of NBS.

The Act No. 149/2001 Coll. also changes and supplements some provisions of the Banking Act related mainly to the performance of control of activities of banks established as state financial institutions by their founders.

The amendment to the Banking Act has supplemented the Banking Act by the provision pursuant to which the founder of a state financial institution is entitled to control compliance of activities of the state financial institution with this act, other generally binding legal regulations, by-laws of the state financial institution, rules of business transactions approved by the founder and with decisions of the founder. Employees of the founder entrusted with performance of control are obliged to procure protection of information and data, which were acquired during performance of control in order to keep state, official/service, business, bank, and tax secret and a duty of confidentiality explicitly imposed, or recognised, by law; the information and data acquired during performance of control for proceedings according to this act or special acts is not violation of this obligation.

This act is in force from 1 May 2001, apart from particular provisions, which will be in force from 1 July 2001.

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