This country-specific Q&A provides an overview of the legal framework and key issues surrounding banking and finance law in Poland including national authorities, regulation, licenses, organisational requirements, supervision and assets.
This Q&A is part of the global guide to Banking & Finance.
For a full list of jurisdictional Q&As visit http://www.inhouselawyer.co.uk/practice-areas/banking-finance/
What are the national authorities for banking regulation, supervision and resolution in the jurisdiction?
The main Polish banking regulatory authority is the Financial Supervision Authority (in Polish Komisja Nadzoru Finansowego), which is responsible for supervision of the financial market, including banking supervision, supervision of the capital markets, supervision of the insurance market, supervision of the pensions market, supplementary supervision of financial conglomerates, and supervision of electronic money institutions, payment institutions and payment service bureaus, as well as supervision of co-operative savings & credit unions.
Which type of activities trigger the requirement of a banking licence?
The following activities can only be performed by banks and, therefore, require a banking license:
- accepting deposits;
- maintaining bank accounts;
- granting credit facilities;
- issuing and confirming bank guarantees and letters of credit;
- issuing banking bonds/notes; and
- settling payments/wire transfers.
Does the regulatory regime know different licenses for different banking services?
No, under the Polish regulatory regime there are only two types of licences, i.e. (1) a license to establish a bank; and (2) a license to commence banking operations.
Does a banking license automatically permit certain other activities, e.g., broker dealer activities, payment services, issuance of e-money?
No, a banking license allows the holder thereof to carry out only those banking activities which it has applied for permission to perform. However, banks may do (and usually do) such exemplary activities if specified in the license/statute.
What is the general application process for bank licenses and what is the average timing?
To set up a bank in Poland two licenses must be obtained from the Polish FSA:
- a license to establish a bank; and
- a license to commence banking operations
The average timing to obtain the first license is six months and for the second license it is three months.
Is mere cross-border activity permissible? If yes, what are the requirements?
Yes, cross-border activity is permissible in Poland if prior to the commencement thereof the Polish FSA is notified by the competent authority within the meaning of Art. 4.1 item 40 of the CRR.
What legal entities can operate as banks? What legal forms are generally used to operate as banks?
Only joint stock companies (in Polish Spółka Akcyjna) can operate as banks in Poland.
What are the organisational requirements for banks, including with respect to corporate governance?
The organizational requirements are as follows:
- a bank must be established by no fewer than three founders (either natural persons or legal entities) unless the founder is a bank, a credit institution, an international financial institution, an insurer, etc;
- the share capital must be equal to at least EUR 5,000,000;
- the supervisory board must be composed of at least five members;
- the management board must be composed of at least three members, of which at least two must speak Polish;
- the members of the management board and the supervisory board must have the knowledge, skills and experience sufficient to operate a bank;
- the bank must have adequate premises, with technical equipment allowing for the safekeeping of valuables.
Do any restrictions on remuneration policies apply?
There are no such restrictions; however, a bank must prepare and implement a remuneration policy for those categories of staff whose professional activities have a material impact on its risk profile. Such remuneration policy must be disclosed to the Polish FSA in accordance with Art. 450 of the CRR and will be further disclosed to the EBA.
The remuneration policy must meet the criteria specified in the Resolution of the Polish Minister of Development and Finance dated 6 March 2017.
Has the jurisdiction implemented the Basel III framework with respect to regulatory capital? Are there any major deviations, e.g., with respect to certain categories of banks?
Yes, the CRR has been implemented in Poland. There are no major deviations with respect to certain categories of banks.
In principle, banks in Poland must maintain own funds (i.e. the sum of Tier 1 capital and Tier 2 capital), within the meaning of the CRR, adjusted to the size of their operations, which shall be not lower that the higher of:
- the amount required to satisfy the ratio specified in Art. 92 of the CRR; or
- the amount of internal capital that they consider adequate to cover the nature and level of the risks to which they as a bank are or might be exposed (including changes to the economic environment).
Are there any requirements with respect to the leverage ratio?
Yes, in general banks in Poland must counteract the‧risk of excessive leverage (within the meaning of the CRR).
Banks here must disclose their leverage to the National Bank of Poland and the Polish FSA.
What liquidity requirements apply? Has the jurisdiction implemented the Basel III liquidity requirements, including regarding LCR and NSFR?
Banks in Poland must maintain a liquidity coverage ratio of at least 100 % (starting from 2018) as per Art. 4 of Commission Delegated Regulation (EU) 2015/61 of 10 October 2014 to supplement the CRR.
NSFR has not been implemented yet, but a similar Polish liquidity requirement, called, M4 applies.
Do banks have to publish their financial statements?
Yes, all joint stock companies incorporated in Poland must publish their financial statements in the Polish Register of Business Entities.
Does consolidated supervision of a bank exist in the jurisdiction? If so, what are the consequences?
Yes, consolidated supervision of a bank exists in Poland. In principle, it is even more detailed supervision and the given bank is still subject to individual supervision in Poland. The major consequences include:
- the right of the Polish FSA to co-operate with respect to supervision with supervisory authorities from other countries;
- the right of the Polish FSA to delegate to such foreign supervisory authorities some of its supervisory competences and the right to accept delegation from the other side;
- the obligation of a bank to provide consolidated financial statements to the Polish FSA (including the financial statements of its subsidiaries or other affiliated entities which are not included in the consolidated financial statements);
- the right of banking supervision inspectors to carry out control checks;
- the obligation of a bank which is a dominant entity in the holding group to ensure the appropriate operation of the internal data control function.
The Polish FSA maintains the register of holdings.
What reporting and/or approval requirements apply to the acquisition of shareholdings in, or control of, banks?
1) Notification about the intention to acquire
The Polish FSA must be notified in writing about any intention to acquire (directly or indirectly) shares in a Polish bank if following such acquisition the following shareholding thresholds will be exceeded 10%, 20%, 33.3% or 50% or if dominant position will be achieved.
The Polish FSA may object to such acquisition.
2) Notification following acquisition
An entity which has acquired shares in a Polish bank must notify such bank if as a result of such acquisition the following shareholding thresholds have been be exceeded: 5%, 10%, 20%, 25%, 33.3%, 50%, 66% or 75% or if dominant position has been achieved. The Polish bank will subsequently notify the Polish FSA about such acquisition.
Does the regulatory regime impose conditions for eligible owners of banks (e.g., with respect to major participations)?
There are no specific conditions imposed; however, an owner of a bank must:
- be in good financial standing; and
- guarantee the proper performance of its rights and obligations in a manner securing the interest of the clients of the bank; and
- ensure the observation by the bank of all capital- and risk-related requirements set out by applicable law.
In addition to the above there are also restrictions concerning the source of a bank’s share capital, i.e. it cannot come from a loan or credit facility or be derived from undocumented sources.
Are there specific restrictions on foreign shareholdings in banks?
No, there are no such restrictions.
Is there a special regime for domestic and/or globally systemically important banks?
None of the Polish banks are considered to be globally systemically important banks. However, there are five Polish banks which are regarded as “Other Systemically Important Institutions” (O-SIIs), namely: Bank Zachodni WBK S.A., mBank S.A., ING Bank Śląski S.A., Bank Polska Kasa Opieki S.A. and Powszechna Kasa Oszczędności Bank Polski S.A. Each of these banks must satisfy stricter capital requirements.
What are the sanctions the regulator(s) can order in the case of a violation of banking regulations?
The Polish FSA may impose the following sanctions:
- prohibit the paying of a dividend;
- send to the supervisory board of a bank a request for the recalling of any management board member who is responsible for any violation of banking regulations;
- suspend any management board member who is responsible for any violation of banking regulations;
- limit the scope of operations of a bank or any of its organizational units;
- impose a fine of up to 10% of a bank’s income;
- withdraw a banking license.
The Polish FSA may also impose fines on the relevant members of the management board of a bank of up to PLN 20,000,000.
What is the resolution regime for banks?
There is no special resolution regime for banks; the standard resolution regime for joint stock companies applies.
How are client’s assets and cash deposits protected?
The cash deposits of clients are guaranteed by the Bank Guarantee Fund up to EUR 100,000 (per bank, regardless of how many bank accounts are held in a given bank). The guarantee does not apply to cash deposits belonging to banks, financial institutions, investment firms, the State Treasury, etc.
Does your jurisdiction know a bail-in tool in bank resolution and which liabilities are covered?
Yes, the bail-in tool is has been transposed into Polish law in accordance with Art. 43 of Directive 2014/59/EU. It relates to the following liabilities:
- Common Equity Tier 1 instruments;
- Additional Tier 1 instruments; and
- Tier 2 instruments.
Is there a requirement for banks to hold gone concern capital (TLAC)?
Yes, there is a minimum requirement for own funds and eligible liabilities, called MREL, but it is set by the Bank Guarantee Fund in a resolution plan prepared for each bank individually.
In your view, what are the recent trends in bank regulation?
Since Poland is EU Member State the bank regulations in Poland follow those of the EU. 2018 is a year with multiple regulatory deadlines, including MiFID II, PSD II and GDPR.
What do you believe to be the biggest threat to the success of the financial sector ?
It is difficult to say what the biggest threat is but technology is one of the factors which needs to be considered. On the one hand it offers opportunities to do old things better and to introduce new products, services and ways of working. But on the other hand it also creates risks for firms whose business models will be challenged, and risks for consumers where its use is not well understood or controlled.