The European Central Bank (ECB) has published a new guide concerning the assessment of banking licence applications.
The document elucidates the general application process as well as the assessment requirements regarding governance, risk management and capital.
Additionally, ECB also published another document for the assessment of fintech credit institution licence applications.
The fintech guide details the supervisory assessment of licence applications aspects especially concerning the banks with fintech business models.
ECB published the guides, following a public consultation period, to ensure consistent supervisory practices across the ‘Euro’ region.
It is also expected to enable the applicants to receive an understanding of the necessary criteria and ensure smooth licensing procedure.
The national authorities of the respective countries are the first point of contact in the licensing application process.
The assessment of the applications is carried out jointly by the national authority and ECB, while the latter reserves the right to provide the final decision to grant, extend or cancel a banking licence in the euro area.
The applicant for the banking licence must comply with the licensing requirements set out in EU and national law as well as fulfil supervisory capital requirements and have a strong risk management system in place.
ECB is expected to carry out an addendum to the two guides of licence applications later.