The regulatory regime applicable to banks
Pursuant to the legal definition, a bank is a legal person, established in accordance with the applicable laws, operating under an authorisation to perform banking transactions involving any risk for the funds entrusted to the bank and repayable in any way. Under Polish law, banks can be established either as state banks (by the government) or as private banks in the form of a joint-stock company or a cooperative.
Alongside the commercial banks, there are about 35 credit unions operating in Poland. The number is continually decreasing as a result of the intensive restructuring process in this sector. Credit unions merge or are being acquired by other credit unions or banks. In general, the situation of the credit unions sector is difficult and requires intensive remedial actions.
Credit institutions in other EU Member States may provide cross-border financial services in Poland on the basis of the single banking passport, or operate in Poland via a branch. Foreign banks may operate in Poland via a subsidiary (which is formally a separate bank licensed by the Polish regulator) or a branch: the establishment of a branch by a non-EU institution requires an authorisation from the PFSA. Branches of foreign non-EU banks must accede to the Polish deposit insurance system to the extent that the guarantee system in the country of origin does not ensure the disbursement of guaranteed funds within the limits stipulated by Polish law (i.e., the equivalent of €100,000).
Foreign banks and EU credit institutions can open a representative office in Poland. The scope of activities of such an office may consist exclusively of advertising and marketing for the foreign bank or the EU credit institution within the limits specified in the authorisation.
Polish law provides for a list of activities that can be performed exclusively by banks, which comprise:
- taking deposits payable on demand or at a specified maturity, and maintaining those deposit accounts;
- maintaining other bank accounts;
- extending credit;
- extending and confirming bank guarantees,
- issuing and confirming letters of credit;
- issuing bank securities; and
- bank monetary settlements.
Banks may also engage in other activities that can be performed not only by banks, such as:
- extending cash loans;
- operations involving cheques and promissory notes, and operations relating to warrants;
- providing payment services and the issuance of electronic money;
- forward transactions;
- purchasing and selling debts;
- the safekeeping of assets and securities, and the provision of safe deposit facilities;
- purchasing and selling foreign currencies;
- extending and confirming endorsements;
- intermediation in money transfers and foreign exchange settlements;
- receiving or acquiring shares and rights attached thereto, shares of other legal persons and participation units in investment;
- assuming commitments relating to the issuance of securities;
- trading in securities;
- swapping debt for a debtor's assets on terms agreed with the debtor;
- purchasing and selling real property;
- providing financial consulting and advisory services;
- providing certification services within the meaning of the regulations on electronic signatures, except for the issuance of qualified certificates used by banks in activities to which they are a party;
- intermediation in concluding structured deposit agreements;
- providing advisory services in relation to structured deposits;
- providing other financial services; and
- performing other activities, if permitted by other laws.
Polish law does not provide for the separation of commercial and investment banking. Banks may provide services under provisional underwriting agreements and firm commitment underwriting agreements, or under the execution and performance of other similar agreements on financial instruments and – subject to authorisation by the PFSA – also perform other brokerage services, such as:
- accepting and transferring orders to purchase or sell financial instruments;
- executing purchase and sell orders of financial instruments for a customer's account;
- acquiring or disposing of financial instruments for the bank's account;
- managing portfolios that include one or more financial instruments;
- investment advice; and
- offering financial instruments.
The activities of banks, their branches and their representative offices are supervised by the PFSA. The supervision of activities of a branch or representative office of foreign non-EU banks in Poland, including the scope of examinations and procedures for their performance, may be performed to the extent laid down in an agreement between the PFSA and the supervisory authorities in their home countries. The PFSA is a consolidated supervisor that was created in 2006 as a result of a merger of the securities, insurance, pension system and banking supervisors. The PFSA is in charge of banking, capital markets, insurance and pension scheme supervision, as well as supervision of payment institutions and credit unions. Despite the consolidation, however, the supervisor serves as an umbrella under which cross-regulatory functions are housed, and under which traditional sectoral supervisory units are maintained as separate operating divisions that focus on traditional sectors such as banking, insurance and securities.
The legal nature of the PFSA changed in 2019. It has become a state legal person instead of an administrative body. This has resulted in more flexible way of dealing with its budget, which is created mainly from contributions paid by supervised entities. The composition of the PFSA has been extended to include new members, such as the representatives of:
- the Prime Minister;
- the Bank Guarantee Fund;
- the President of the Office of Competition and Consumer Protection; and
- the minister in charge of supervising intelligence.
The new members of the PFSA mentioned in points (b) to (d) have no voting rights.
The aim of the change was to improve the circulation of information between the state authorities.
The Ministry of Finance and the presidents of the PFSA, the National Bank of Poland (National Bank) and the Bank Guarantee Fund coordinate their actions in the Financial Stability Committee. The Financial Stability Committee is also the competent body for the macroprudential supervision of the financial system and crisis management. In performing its tasks, the Committee cooperates with the European Systemic Risk Board. It is responsible for, inter alia, identifying financial institutions posing material risks to the financial system and the execution of macroprudential instruments, including presenting opinions and issuing recommendations on limiting systemic risk.