Regulations Governing Banks in Croatia

Basel III Implementation

The Credit Institutions Act has transposed Directive 2013/36/EU (CRD IV) into Croatian law, and Regulation (EU) No. 575/2013 (CRR) is in force in Croatia. These implementations adhere to the Basel III framework.

Reporting Requirements

Banks in Croatia are required to report various information to the Croatian National Bank (CNB), including:

Details about shareholders
Changes in share capital
Cessation of banking services
Acquisition or disposal of qualified shares
Composition of the group of related persons
Capital Conservation Buffer (CCoB)
Countercyclical Capital Buffer (CCyB)
Systemic Risk Buffer (SRB)
Systemically Important Institutions Buffer (G-SII and O-SII)

Organizational Requirements

Banks are required to establish an effective organizational system with:

A clear structure
Defined lines of authority
Risk management
Internal control systems
Remuneration policies that promote appropriate risk management
A recovery plan

Corporate Governance

The suitability of the members of the management board includes having:

Good reputation
Honesty
Conscientiousness
Appropriate professional knowledge
Ability
Experience necessary for managing bank affairs
Expressing an independent opinion without conflicts of interest

Banks can grant loans to their management boards, procurators, and immediate family members only based on the decision of the supervisory board. The loan agreement must be concluded within three months from the date of the decision approving the loan.

Risk Management

Banks are required to have a risk committee appointed by the supervisory board. The risk committee’s duties include:

Advising the supervisory board on overall current and future risk-taking tendencies
Reviewing whether business models and risk strategies were considered when pricing claims and liabilities
More