Regulatory Alerts2025-03-06
Approval Process
The Central Bank’s Approval Committee mandates that all banking activities require formal approval and defines its composition, including a Governor-chaired structure with three-year renewable terms for members selected for financial expertise and integrity. The committee exercises broad regulatory powers to grant, withdraw, or condition approvals for credit institutions, executives, and statutory auditors, while establishing capital requirements, operational conditions, client relationship rules, and shareholding transfer procedures. It further consults on banking matters, declares credit institution insolvency upon reasoned management or Central Bank requests, and standardizes supporting documentation through a dedicated procedural instruction.
Approval Process
The exercise of banking activity is subject to obtaining an approval, issued by the Approval Committee.
Composition of the Approval Committee The Approval Committee, an independent decision-making body, is chaired by the Governor of the Central Bank or, in their absence, by one of the Vice-Governors. It also includes the Head of the General Directorate for Financial Institutions Supervision at the Central Bank or their representative, a member appointed by the Minister of Economy and Finance, a member appointed by the Minister of Justice, and a qualified independent personality appointed by the Governor of the Central Bank. The appointed members serve for a renewable three-year term. Members of the Approval Committee are selected based on their integrity and experience in the banking and financial sector. Alternate members are selected under the same conditions.
Powers of the Approval Committee The primary mission of the Approval Committee, in collaboration with other stakeholders in banking supervision, is to promote the safety and soundness of the banking system. To this end, in accordance with the Banking Law, it is authorized to:
- grant approvals to credit institutions, their management, and statutory auditors of credit institutions;
- authorize representative offices;
- withdraw approvals from credit institutions, their management, and statutory auditors that no longer meet legal or regulatory conditions;
- establish regulations concerning the capital amount of credit institutions and the conditions for operations these institutions may conduct, particularly in their client relationships, as well as the conditions under which direct or indirect shareholdings may be acquired, expanded, or transferred in these institutions' capital;
- grant prior authorizations; and
- review notifications regarding granted approvals.
The Approval Committee is consulted by the Central Bank for opinions on various matters related to banking activity. It may declare the insolvency of a credit institution upon reasoned request by its management, based on findings by the provisional administrator, or in case of a severe liquidity crisis upon reasoned request by the Central Bank. The documents and information required for processing approval applications to exercise banking and financial activities are set forth in the Instruction regarding the list of supporting documents for approval files.