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Banking Regulation Compliance in Croatia: A Comprehensive Overview

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Regulatory Framework

In Croatia, the banking sector is regulated by a combination of authorities, including:

  • The Croatian National Bank (CNB), responsible for supervising bank institutions and maintaining financial stability, while supporting national economic policy.
  • The State Agency for Deposit Insurance and Bank Regulation (DAB).
  • The Financial System Sector of the Ministry of Finance.

Obtaining a Banking License

To operate in Croatia, credit institutions must obtain a license from the CNB. This involves:

  • Submitting an application form with required documentation, both electronically and in paper form.
  • Assessment of information available from other sources to check whether it meets legal requirements and determines the level of risk for the credit institution if the application is granted.

Types of Banks

Credit institutions can operate in Croatia as:

  • Banks: general-purpose banks that offer a wide range of financial services.
  • Savings Banks (Štedionice): promote special-purpose savings and provide household lending.
  • Housing Savings Banks (Stedionice za stanogradnju): specialized banks that focus on providing housing loans.

Banking Sector Overview

The Croatian banking sector is characterized by:

  • A small number of banks offering a wide range of services.
  • High concentration, with a few large banks dominating the market.
  • A high share of foreign capital, with Italian-owned banks accounting for almost half of total bank assets, followed by Austrian-owned banks.

Corporate Governance

Banks in Croatia are established as joint stock companies and must comply with corporate governance rules under the Companies Act. The Credit Institutions Act provides a legislative framework for corporate governance, supplemented by other regulations issued by competent bodies.

  • Corporate Governance Code: issued by HANFA (Croatian Financial Services Supervisory Agency) and the Zagreb Stock Exchange, defines standards for business transparency.
  • Audit Act and Accounting Act: applicable to banks as joint stock companies, providing additional framework for corporate governance.

Conclusion

Croatia’s banking sector is characterized by a complex regulatory framework that ensures stability and transparency in financial operations. Compliance with these regulations is essential for credit institutions operating in the country.