The banking sector in Germany is regulated by three laws: On Banking, On Trading in Securities and the Civil Code. The latter regulates the relationship between financial institutions and their customers.
German banks are supervised by the German Financial Supervision Authority (BaFin) and the Deutsche Bundesbank. The latter, among other responsibilities, checks the reporting of banks.
In the case of large credit institutions, the European Central Bank is also involved in monitoring and verifying their activities.
In this article, we will look at the legal aspects of the financial sector in Germany. This information will be relevant for those who plan to obtain a financial license in Germany and register a bank in Germany.
How to get a private bank license in Germany
The financial license in Germany is governed by both local and EU law.
Obtaining a banking license in this jurisdiction is a rather complex and lengthy process. Be prepared for the fact that the whole procedure will take at least six months.
The basic licensing requirements depend on the type of services. Deposit-taking services impose additional requirements on financial institutions, in particular, on initial capital, which cannot be less than EUR 5 million.
Documents for obtaining a banking license in Germany
If you intend to register a bank and obtain a banking license in Germany, you need to submit the following package of documents to BaFin (the key documents):
- application in a certain form;
- constituent documents of the organization;
- certified copies of documents confirming the state registration of the founders;
- business plan in detail;
- full list of founders;
- minutes of the general meeting of founders;
- CVs of candidates for the positions of its director, chief accountant and their deputies;
- audit opinions on the reliability of the financial statements of the founders;
- documents confirming payment of the state duty;
- and some other additional documents.
In Germany, as an EU Member State, the relevant European Union regulations (in particular Directive 2011/83 / EU) apply to customer protection. This should be taken into account when registering a bank in Germany and developing proposals for financial products.
After obtaining a financial license in Germany, financial institutions should comply with the requirements of regulators on an ongoing basis. This applies in particular to the capital required. As additional standing requirements for management capital, there are several regular and one-off reporting obligations to national regulators.
Typically, BaFin may revoke a license if the institution no longer meets the requirements of the license or violates the banking legislation.
The revocation of a financial license in Germany is an extreme measure. Instead, the regulator may demand the resignation of the executive directors of the financial institution.
In this article, we have provided a brief overview of the procedures and requirements for obtaining a banking license in Germany.
You can order a consultation on the regulation of banking activities in Germany from our legal experts for more detailed information. Contact us directly by filling out the form on the website.