Authorisation for a savings bank to operate as a bank

Published: 31/1/2015
A savings bank intending to operate as a bank must obtain authorisation from the Croatian National Bank to operate as a bank. The provisions of the Credit Institutions Act governing the authorisation procedure apply mutatis mutandis to the authorisation procedure for savings bank intending to operate as a bank. Described in the text below are the contents of the application for authorisation for a savings bank to operate as a bank, the decision-taking procedure and reasons for refusing the application and for the annulment of authorisation for a savings bank to operate as a bank.

A savings bank is a credit institution which requires lower initial capital than banks for its establishment (HRK 8m) and which may carry out a smaller scope of activities limited to the territory of the Republic of Croatia.  A savings bank may start operating as a bank after it has obtained an authorisation from the Croatian National bank and has entered the change in business and firm name in the register of companies.

Application for authorisation for a savings bank to operate as a bank
The application for authorisation for a savings bank to operate as a bank is to be submitted on the form Application for authorisation for a savings bank to operate as a bank together with the attachments described in detail in the columns of the application form in which the requested information have to be entered or in which a referral is made to the attachment in which the requested information may be found.  

The following documents and information have to be enclosed with the Application for authorisation for a savings bank to operate as a bank:

  1. draft amendments to the Articles of Association;
  2. a business plan for the first three years of business, including balance sheet, profit and loss account, the types of business planned, the appropriate organisational, technical and personnel structure of the bank, accounting policies and the organisation of the internal audit function;
  3. a relevant legal act issued by the competent authority authorising the provision of specific financial services where so required by the regulations governing the provision of specific financial services set out in the credit institution's business plan (e.g. investment services governed by the Capital Market Act, representation governed by the Insurance Act);
  4. a bank's business strategy;
  5. a bank's business plan with projections of financial statements (balance sheet, profit and loss account) for the next three years;
  6. drafts of internal bylaws regulating the provision of financial services for which authorisation is required;
  7. a description of changes in the organisational structure of the savings bank;
  8. a description of changes in information technology of the savings bank;
  9. other information listed in the form Application for authorisation for a savings bank to operate as a bank.

Deciding on the application 
In the application processing procedure, the Croatian National Bank may require from the applicant to submit other documents and information necessary for decision-taking. If the Croatian National Bank has requested additional documentation, the date of its delivery will be considered the date of receipt of a valid application.

The Croatian National Bank is obligated to issue a decision on the application for authorisation for a savings bank to operate as a bank within six months from the date of delivery of a valid application, i.e. within maximum 12 months from the date of application.

In the context of assessment of legislative compliance and readiness of the savings bank to operate as a bank, the Croatian National Bank may require from the chairperson and management board members to give a presentation on the management of the business of a bank.

In deciding on the application for authorisation for a savings bank to operate as a bank, the Croatian National Bank assesses whether it can be expected, based on the documents and information and other available information submitted, that the bank will operate in accordance with regulations, over a long-term and in a stable and safe manner. The Croatian National Bank will refuse an application for authorisation for a savings bank to operate as a bank if it establishes that one of the following reasons exist:

  1. 1) if it is evident from the documentation that the savings bank is not organised in accordance with the Credit Institutions Act or if the conditions for the operation of banks laid down in that Act, regulations adopted under that Act or the regulations of the European Union governing the operation of credit institutions have not been met;
  2. if the provisions of the bank's Articles of Association are contrary to the provisions of the Credit Institutions Act or provisions of regulations adopted under that Act or the regulations of the European Union governing the operation of credit institutions;
  3. if it is evident from the documentation and from other available information that the savings bank fails to meet the personnel, organisational and technical requirements for the provision of banking and/or financial services in the manner and scope envisaged in its business plan;
  4. if it is evident from the application and the enclosed documentation that the savings bank fails to meet other requirements for the provision of the banking and/or financial services covered by the application for authorisation; and
  5. where the Croatian National Bank has imposed supervisory measures on the savings bank and the introduction of new services could adversely affect the implementation of the supervisory measures.

Annulment of decision

The Croatian National Bank will annul a decision authorising a savings bank to operate as a bank if the bank has obtained the authorisation on the basis of false or inaccurate documentation or false presentation of data relevant to the operation of the bank.