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BANKS IN POLAND: A GUIDE TO REGULATION AND SUPERVISION
Warsaw, Poland - In a bid to ensure stability and efficiency in the financial sector, the Polish Financial Supervision Authority (PFSA) has put in place strict regulations and supervision measures for banks operating in the country.
Definition of Significant Banks
According to the PFSA, a bank is considered significant if its shares are traded on a regulated market, it holds at least 2% of banking sector assets or deposits, or it has a minimum of 2% of the banking sector’s own funds. Foreign credit institutions may operate in Poland through a branch or cross-border agreement with the PFSA, while foreign banks not established in an EU Member State must obtain authorisation from the PFSA to open a branch.
Supervision of Representative Offices
The PFSA also supervises the operations of representative offices of foreign banks and credit institutions, which are permitted to advertise and promote their services subject to authorisation from the competent authority in their home country.
Para-Banking Sector
In addition to traditional banking activities, Poland has a thriving para-banking sector, with 25 cooperative savings and credit unions operating in the country. However, these entities are increasingly rare due to irregularities and bankruptcy issues.
Lending Guidelines
Banks in Poland are required to follow strict guidelines on lending, with the PFSA responsible for ensuring compliance with the Banking Law. Consumer loans, which are granted by authorised creditors such as banks, cooperative savings and credit unions, and lending institutions, are subject to separate regulations under the Consumer Credit Act.
Payment System
The Polish Elixir clearing system, operated by Krajowa Izba Rozliczeniowa SA, enables efficient payments between banks participating in the system.
Supervision and Regulation
PFSA Responsibilities
- Responsible for supervising all commercial banks, branches, and representative offices of foreign banks and credit institutions operating in Poland.
- Monitors compliance with regulations and issues recommendations to ensure prudent and stable bank management.
- May impose administrative penalties or issue decisions to bring entities into line with applicable law.
Soft Law Recommendations
The PFSA has issued 19 soft law recommendations to date, covering areas such as:
- Risk mitigation in investments
- Mortgage-backed credit exposures
- Best practices in bancassurance
National Bank of Poland (NBP)
Responsible for supervising the payment system.
Financial Stability Committee
Conducts macroprudential supervision.
Polish Competition and Consumer Protection Office
Plays a role in regulating bank operations.
Consolidated Supervision
The PFSA carries out consolidated supervision in Poland, entering into agreements with competent authorities of other countries to cooperate on a consolidated basis or delegate tasks as necessary. The authority keeps lists of holding companies and requires domestic banks operating in holdings to provide own consolidated financial statements and those of subsidiaries or entities closely linked to them.
Future Developments
The implementation of the CRR II/CRD V package expected later this year is set to strengthen Poland’s consolidated supervision framework and ensure continued stability in the banking sector.