Financial Crime World

Banks Must Prioritize Due Diligence and Prudential Measures to Ensure Stability

Warsaw, Poland - In a bid to maintain financial stability, banks operating in Poland must adhere to strict due diligence measures and prudential regulations. The Polish Financial Supervision Authority (PFSA) has emphasized the importance of these measures to prevent money laundering and terrorist financing.

Prioritizing Due Diligence

According to experts, banks should prioritize:

  • Identifying and verifying customer identities
  • Assessing and obtaining information on business relationships’ purposes and intended nature
  • Ongoing monitoring of such relationships to detect any potential risks

These measures are crucial in preventing financial crimes and maintaining the stability of the banking system.

Bank Secrecy Requirements

Banks are required to maintain secrecy regarding all information related to banking activities. However, there are exceptions, including cases where disclosure is necessary for:

  • The proper performance of anti-money laundering and counter-terrorism financing obligations
  • Cases where bank secrecy can be breached without compromising financial stability or national security

Breaching bank secrecy can result in both civil and criminal liability, with penalties including fines and imprisonment.

Prudential Regime in Place

The Polish Banking Act (BL) sets out capital and liquidity requirements for banks. The initial capital requirement is set at the PLN equivalent of EUR5 million, although this may vary depending on the scope of a bank’s activities. The PFSA also requires banks to comply with Basel III standards.

Depositor Protection Scheme

The Bank Guarantee Fund (BGF) administers Poland’s mandatory depositor protection scheme, designed to protect depositors in case of bank insolvency. The fund provides coverage limits set at PLN equivalent of EUR100,000 for:

  • Natural persons
  • Legal persons
  • Certain organizational units

Conclusion

Banks must prioritize due diligence and prudential measures to ensure financial stability and maintain public trust. Failure to do so can result in severe consequences, including reputational damage and even insolvency.

Note: The Polish Financial Supervision Authority (PFSA) is responsible for regulating the banking sector and ensuring compliance with anti-money laundering and counter-terrorism financing regulations.