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Laws to make banking sector more open

ALONG with liberalizing the banking sector, the revision to the banking act is intended to make the Slovak banking environment a more flexible, but also a safer space.
The revision, tailored by the Finance Ministry, will oblige the banking houses to provide more information on their financial products. It also softens the terms for granting bank licenses and simplifies the process of selecting bank managers - it will no longer be necessary for them to document their professional proficiency and credibility.


THE NEW tower of the NBS watches over the city and its banks.
photo: TASR

ALONG with liberalizing the banking sector, the revision to the banking act is intended to make the Slovak banking environment a more flexible, but also a safer space.

The revision, tailored by the Finance Ministry, will oblige the banking houses to provide more information on their financial products. It also softens the terms for granting bank licenses and simplifies the process of selecting bank managers - it will no longer be necessary for them to document their professional proficiency and credibility.

Only members of the board of directors, supervisory boards, and managers of the audit and internal inspection departments will have to undergo the background and liability checks.

The Finance Ministry, which tailored the bill, stresses the importance of a more complex and strict risk management structure to maintain stability across the whole banking sector.

In line with the draft revision, an acquisition equalling or exceeding 66 percent of a bank's share capital or voting rights will require NBS approval from January 2004.

The central bank's approval is currently necessary for an acquisition equalling or exceeding the levels of 5 percent, 10 percent, 20 percent, 33 percent, or 50 percent. Similarly, the reporting duty will apply to the intention of reducing the stake in the share capital or voting rights below 66 percent.

The ministry's revision is to harmonize the current banking act with several laws that were passed after the act's adoption. These are, for example, the law on personal data protection and investment services, the accounting law, the insurance law, the payment conduct law, the deposit protection law, and the law on financial market supervision.

The revision has been passed by the cabinet and submitted to parliament for review.

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