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Polish Banking Regulations: Key Requirements and Consequences

In an effort to ensure stability and transparency in the financial sector, Poland has implemented a range of regulations governing banking activities. The following article highlights some of the key requirements and consequences for banks operating in Poland.

Customer Due Diligence Measures

  • Banks are required to implement robust customer due diligence measures, including:
    • Identifying and verifying customer identities
    • Taking reasonable steps to verify beneficial ownership
    • Assessing the purpose and nature of business relationships
    • Conducting ongoing monitoring
  • Banks must also be aware of any positions or interpretations issued by the General Inspector of Financial Information regarding anti-money laundering and counter-terrorism financing duties.

Depositor Protection

Poland’s mandatory depositor protection scheme is administered by the Bank Guarantee Fund (BGF), a special legal person responsible for governing the scheme. All banks with their corporate seat in Poland are required to participate in the fund, contributing in proportion to factors such as:

  • Management profile
  • Capital
  • Liquidity
  • Asset quality

The BGF provides coverage for:

  • Funds accumulated by depositors in bank accounts
  • Other receivables arising from selected banking activities
  • Selected receivables of depositors arising from bank securities
  • However, the guarantee does not extend to certain entities or types of deposits.

Bank Secrecy

  • Banks are required to maintain secrecy regarding all information related to banking activities, including:
    • Negotiations
    • Contracts
    • Transactions
  • The obligation to maintain secrecy does not apply in cases where disclosure is necessary for:
    • Anti-money laundering and counter-terrorism financing purposes
    • To exercise supervisory powers

Breaching bank secrecy can result in:

  • Civil liability
  • Criminal liability, with fines of up to PLN 1 million and imprisonment for up to three years
  • Disclosure of information subject to bank secrecy that also constitutes personal data may be subject to administrative penalties under the General Data Protection Regulation (GDPR).

Prudential Regime

The Polish Banking Law prescribes minimum capital requirements, with an initial capital of at least PLN 5 million. However, the PFSA requires a higher level of capital based on the intended scale and scope of bank activities.

Banks are also subject to:

  • Liquidity requirements
  • Risk control requirements, including:
    • Maintaining adequate cash reserves
    • Managing credit risk exposure

Failure to comply with these requirements can result in:

  • Penalties
  • License revocation

These regulations aim to ensure that banks operating in Poland operate safely, soundly, and transparently, protecting the interests of depositors, customers, and the financial system as a whole.