Subsections
A license authorising to act as a bank is substituted by a banking license which is a license for establishment of a bank or establishment of a branch office of a foreign bank and for performance of banking activities by such bank or branch office of the foreign bank in the scope specified in this license and under the conditions granted by this license or stipulated by the new Banking Act and special regulations.
In the part on granting approvals for banking activities, the requirements which have to be fulfilled by banks and branch offices of foreign banks in order to obtain a banking license, are newly regulated directly by the new Banking Act.
The requirements include in particular proving of transparent and non-defective origin of the registered capital and other financial resources, their sufficiency and satisfactory composition. For granting of a banking license also competence and suitability of persons who are to be the main shareholders, and professional qualification and trustworthiness of persons who are nominated as members of the Statutory Body and the Supervisory Board of a bank are required. All requirements necessary for the issue of banking license have to be fulfilled by a bank or a branch office of foreign bank during its entire existence.
Banking Activities
Pursuant to Sec. 2(2) of the new Banking Act, a bank may execute, apart from activities such as acceptance of deposits and granting of loans, the following activities provided that they are included in the banking license:
- a)
- payments and clearing,
- b)
- investing into securities on the bank's own account,
- c)
-
trading on its own account or on the client's account:
- 1.
- in financial instruments of money market in Slovak crowns and in foreign currency, including exchange activity,
- 2.
- in financial instruments of capital market in Slovak crowns and in foreign currency,
- 3.
- in gold and silver coins, commemorative banknotes, commemorative coins, sheets of banknotes and sets of coins for circulation,
- d)
- administering receivables and securities of the client on the client's own account including related advisory,
- e)
- financial leasing,
- f)
- providing of guarantees, opening and confirmation of letters of credit,
- g)
- issuing and administration of payment means,
- h)
- provision of advisory services in business matters,
- i)
- issue of securities, participation in the issue of securities and provision of related services,
- j)
- financial brokerage,
- k)
- depositing of securities or other values,
- l)
- lease of safe deposit boxes,
- m)
- provision of banking information,
- n)
- mortgage,
- o)
- function of the custodian under a special regulation,
- p)
- processing of banknotes, coins, commemorative banknotes and commemorative coins.
A list of banking activities is harmonised with the requirements of the European Communities for the performance of banking activities by credit institutions.
As far as financial brokerage is concerned, the new Banking Act has extended the scope of this activity recognised under the original Banking Act in the way that it is not limited only to the area of banking and insurance related to banking activities or construction saving, whereas financial brokerage under this Act shall mean brokerage of banking services or other financial services including insurance or brokerage of operations connected with financial assets.
Under the new Banking Act, trading on the bank's own account or on the client's account is divided into trading in financial instruments of money market, trading in financial instruments of capital market and trading in gold and silver coins. Trading in financial instruments of money market thus creates space for term transactions within one year among banks as well as between banks and the National Bank of Slovakia (``NBS'') (e.g. in bank-to-bank deposits, securities payable within one year, for term transactions within one year with securities payable within one year and securities payable over one year, other financial derivatives and funds in foreign currency).
Trading in financial instruments of capital market creates space for all kinds of transactions with publicly tradable securities with the maturity period over one year and their yields.
Financial instruments shall be understood as financial instruments in domestic currency, as well as in foreign currencies.
Under the new Banking Act, financial leasing shall mean lease of objects for the agreed rent and for definite period of time, usually paid in regular instalments with the aim of transfer of this object into the ownership of the lessee.
The Banking Act valid up-to-now, as well as the new Banking Act enables banks and branch offices of foreign banks to perform advisory services in business matters. This activity complies with the banking directive. These are advisory services in such area in which banks operate or about which they have enough information and experience (e.g. advisory services in the area of financial strategy of the company, issue of bonds, crediting, leasing, financing of business intentions, advisory related to the establishment, merger or amalgamation of companies, as well as management of financial flows of companies).
No entity may accept deposits without a banking licence, unless a special regulation stipulates otherwise. Also no entity may provide interests or other retributions from deposits which are tax expenditures according to a special regulation, neither credits and loans within the scope of its business activities or the scope of its other activities, interests from return-funds obtained from other persons on the basis of public call, without a banking licence, unless a special regulation stipulates otherwise.
Similarly, also execution of payments and clearing for another person within the scope of its business activities or the scope of other activities is prohibited without a banking licence, unless a special regulation stipulates otherwise. The same prohibition shall apply also to issue of banking payment cards.
For the purposes of the new Banking Act,
- (a)
- a deposit shall mean entrusting of funds representing an obligation towards the depositor to its payment, and
- (b)
- a loan shall mean temporary provision of funds in any form, including factoring and forfeiting.
A branch office of bank shall mean its organisational unit situated in the territory of the Slovak Republic or outside the territory of the Slovak Republic directly performing mainly the basic banking activities.
The new Banking Act defines investing into securities on the own account as an acquisition of securities for the purposes of performance of a long-term influence on the activity of a business company and acquisition of property or other advantages, however at least for one year, or purchase of bonds and their custody until the end of the maturity period from their acquisition.
Furthermore, the Act defines terms such as system of payments, clearing system, banking information and banking payment card.
The above-stated banking activities may be performed also by foreign banks through their branch offices having banking licenses.
A foreign bank shall mean a legal entity with its registered seat outside the territory of the Slovak Republic performing banking activities and having a banking license for performance of these activities granted it the state in which it has its registered seat.
A branch office of a foreign bank shall mean an organisational unit of the foreign bank situated in the territory of the Slovak Republic directly performing at least basic banking activities (i.e. acceptance of deposits and provision of loans). With effects from the validity date of the Agreement on Accession of the Slovak Republic to the EC, all branch offices of foreign banks established in the Slovak Republic by the foreign banks with their registered seats in the member state of the EC shall be considered, in terms of authorisation for performance of banking activities, as one branch of the foreign bank.
A bank and a branch office of foreign bank may not perform other business activities as banking activities, save for activities related to its own operation. An approval of NBS is required for performance of activities related to the operation of the bank. The new Banking Act expressly stipulates that such activities shall not be registered in the Commercial Registry.
A bank is obliged to notify NBS in advance of changes of requirements, on which grounds a banking license has been granted to it, as well as changes of the Articles of Association of the bank. A prior approval of NBS is required for changes of members and election of new members of its Supervisory Board, changes of managers, change of the director of the division of internal supervision and internal audit and for change of the bank's registered seat. Such appointment/election or change is deemed invalid without such an approval. The same also applies to a foreign bank and a branch office of foreign bank. Any change of the director of the branch office of foreign bank, change of managers, change of the director of the division of internal supervision and internal audit and for change of the registered seat of the branch office of foreign bank requires a prior approval of NBS otherwise it is invalid.
A bank and a branch office of foreign bank are obliged to submit a petition for registration of permitted banking activities in the Commercial Registry, upon a banking licence, with a relevant Court within (10) ten days from the effective date of the banking licence, and are obliged to deposit an extract from the Commercial Registry with NBS within (10) ten days from the effective date of a court's decision on registration in the Commercial Registry or a change of the registration therein.
A bank is obliged to notify NBS in writing and in advance of the establishment of any representative office abroad which shall mean an organisational unit of the bank which promotes activities of the bank abroad or acquires information about possibilities of economic co-operation in a foreign country. The representative office of the bank is neither allowed to execute banking activities, nor conduct business activities otherwise.
Unlike the representative office in a foreign country, a branch office in a foreign country may be established by the bank only after the prior approval of NBS.
A foreign bank or similar foreign financial institution, which performs banking activities, may establish its representative office in the territory of the Slovak Republic on the basis of registration which is decided upon by NBS.
For the purposes of the Act, a representative office of foreign bank or of similar foreign financial institution, which performs banking activities, shall mean its organisational unit which promotes activities of the foreign bank or a similar foreign financial institution or acquires information about possibilities of economic co-operation in the Slovak Republic. The foreign representative office, similarly as the branch of foreign bank, has to use an identification of its status being a ``representative office'' in its business name all the time in connection with identification of its registered seat and its business correspondence.
The foreign representative office may neither execute banking activities, nor conduct business activities otherwise. It is not registered in the Commercial Registry.
The foreign representative office is obliged to notify NBS in writing within 30 days from registration which bank or a branch office of foreign bank maintains its accounts and also within 30 days notify NBS in writing of each change occurred compared to the facts forming grounds for its registration.
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