Slovakia’s banking laws were changed from 2002 onwards to bring them into line with EU and OECD requirements. Under the single passport principle, EEA-based banks and credit institutions that are licensed to carry on banking activities in their home country may also do so in Slovakia. Banks and credit institutions from outside the EEA can only do so if granted a licence by the National Bank of Slovakia.
Any EEA-based bank or credit institution intending to set up a branch office or provide cross-border banking services in Slovakia must formally notify the National Bank of Slovakia. The NBS will then ask the banking supervisory authority in the bank’s home country for:
- confirmation that it has no concerns about the bank’s organisation or finances
- confirmation that it is willing to supervise the bank’s activities in Slovakia
- details of the regulatory regime to which the bank is subject in its home country (which must be made publicly available in Slovakia via the internet).
The NBS will similarly notify both the bank and its home supervisory authority of the monetary policy rules applying to banking generally in Slovakia. These rules may not be restrictive or discriminatory.
Once these formalities are complete (or no response has been received from the supervisory authority after two months), the bank can begin conducting any banking activities in Slovakia for which it is licensed in its home country, apart from mortgage transactions and acting as a depository (which need a separate licence from the NBS). It can conduct these activities with or without a branch office (e.g. via the internet). In common with other banks, it can also use advertising to promote its services in Slovakia
The NBS retains a limited supervisory role as regards the activities of Slovakian branch offices of foreign banks:
- it has shared responsibility with the home country supervisory authority for supervising the liquidity of the foreign bank’s branch
- it can take measures against the branch of the foreign bank for any breach of Slovakian law, according to the seriousness of the offence. The measures tend to be remedial rather than punitive.
There is considerable similarity between cross-border banking activities and those which may be provided via a branch office; the distinction is subject to differing interpretations by the various supervisory bodies across the EEA. In Slovakia, branch offices of EEA-based banks are exempt from certain administrative requirements, such as registering their representative office and gaining NBS approval before selling a branch office.
Information acquired in the course of supervision can be shared between the NBS and banking supervisory authorities in other EEA countries. The NBS is the state body responsible for supervising the insurance and capital markets sectors in Slovakia. From January 1, 2006, NBS also took over responsibility for supervising the insurance industry and financial markets.
The single passport principle also applies to EEA-based insurance companies, trustee companies and securities traders, allowing them to carry on in Slovakia (with or without a branch office) any activities they are licensed to carry on in their home country. The NBS maintains a list of all foreign institutions carrying on insurance or capital markets activities in Slovakia which is published on its website.
