Polish Banks Face Enhanced Customer Due Diligence Requirements and Strengthened Deposit Protection

Boosting Financial Stability and Preventing Money Laundering

The Polish government has strengthened its regulatory framework for banks to enhance financial stability, prevent money laundering, and protect depositors’ interests. The changes include enhanced customer due diligence measures and an expanded deposit protection scheme.

Enhanced Customer Due Diligence Requirements

Under the new regulations, banks are required to implement robust customer due diligence procedures, including:

• Identifying and verifying the identity of customers, beneficial owners, and understanding the purpose and nature of business relationships.
• Conducting ongoing monitoring of these relationships.
• Being aware of any positions or interpretations issued by the General Inspector of Financial Information regarding anti-money laundering and counter-terrorism financing (AML/CFT) duties.

Strengthened Deposit Protection Scheme

The Bank Guarantee Fund (BGF), a special legal person responsible for administering Poland’s mandatory depositor protection scheme, has been tasked with providing greater coverage to depositors. The BGF guarantees deposits up to PLN 100,000 (approximately EUR 25,000) in banks that have participated in the fund by contributing a proportion of their capital based on factors such as:

• Management profile
• Liquidity
• Asset quality

The expanded scheme covers a broader range of deposits, including:

• Funds accumulated in bank accounts
• Other receivables arising from banking activities
• Selected receivables of deceased account holders

However, the guarantee does not extend to certain types of deposits, such as those that have remained inactive for two years prior to the date of fulfillment.

Strengthened Bank Secrecy Requirements

Banks are subject to strengthened bank secrecy requirements, with obligations to maintain confidentiality extending to all information related to banking activities. While there are certain exceptions to this rule, banks must only disclose sensitive information in specific circumstances, such as:

• To regulatory bodies or law enforcement agencies

The PFSA has issued guidelines outlining the scope of these obligations and the consequences of breaching bank secrecy, which can include both civil and criminal liability.

Strengthened Prudential Regime

Poland’s prudential regime has been strengthened through the implementation of Basel III standards, with requirements for:

• Initial capital
• Liquidity
• Risk control measures

The European Union’s Capital Requirements Regulation (CRR) and Capital Requirements Directive (CRD) package have also been transposed into Polish law.

Conclusion

These changes are designed to enhance financial stability, prevent money laundering and terrorism financing, and protect depositors’ interests in Poland.