Banks

Regulated activities

Banks collect savings from the public and grant loans. In addition, they provide a wide range of financial services (including electronic money issuance, payment and investment services, lending and investment-based crowdfunding) in accordance with their respective rules, as well as any services eligible for mutual recognition or regulated by Italian or European law, and any related or ancillary services. They are legally required to obtain a banking licence before they can engage in business.

Licensing process

Since 4 November 2014, the European Central Bank (ECB) has been exclusively responsible for granting banking licences to credit institutions established in the Member States participating in the Single Supervisory Mechanism (SSM). This authority is exercised in close cooperation with the national competent authorities (NCAs), in compliance with Regulation (EU) No. 468/2014.

The Bank of Italy, as the entry point in this process, receives licensing applications and conducts preliminary assessments in cooperation with the ECB. Applications can be drafted in any official EU language, at the applicant's discretion, and must be submitted, along with the required attachments, via the Banking supervision portal or IMAS portal, in accordance with the Bank of Italy's Regulation of 23 December 2021. The instructions to access the IMAS portal are available here.

For information on the licensing process, visit the ECB's website. The steps that fall within the Bank of Italy's remit are governed by the Bank of Italy Regulation of 10 August 2021 (only in Italian): for more details, please refer to the administrative process section.

Depending on the preliminary assessment, the Bank of Italy will:

• in case of positive outcome, forwards a draft proposal to grant the license to the ECB for approval;
• in case of negative outcome, reject the application, without forward the proposal to the ECB.

The ECB shall make a final decision within 180 days of the date of receipt of the application, subject to any statutory suspension or interruption period. At any rate, this decision shall be taken within 12 months of receipt of the application, provided it is accurate and complete.

A licensing decision may include ancillary provisions, such as:

• 'conditions', i.e. the requirements to be met before the licensing decision takes effect;

• 'obligations', i.e. the requirements or restrictions applicable on an ongoing basis or for a specified period of time after the licensing decision; and

• 'recommendations', i.e. non-binding proposals.

In addition, any applicant can, prior to the adoption of the licensing decision, make 'ex ante commitments', which will be taken into account in the overall assessment and may be included in the decision as agreed conditions or obligations.

Requirements

Applicants for banking licences must meet the following requirements:

1. legal form of a public limited company or a cooperative company;
2. registered office and headquarters in Italy;
3. initial share capital of at least:
• €10 million for banks in the form of public limited companies, 'popolari' banks and mutual loan guarantee banks;
• €5 million for cooperative credit banks;
4. regulatory requirements for qualified shareholders;
5. regulatory fit and proper requirements for members of the management body;
6. no close links between the bank or any entities within the group and other entities that could stand in the way of effective supervision.

In addition, applicants are required to submit specific documents in compliance with the applicable provisions, including, among other things, an initial business plan with a focus on capital sustainability, the bank's memorandum of incorporation and articles of association, a report on its organizational structure, a description of compensation packages and incentive schemes.

The Bank of Italy will vet the documents and information for thoroughness and accuracy based on the EBA/GL/2021/12 Guidelines and the technical standards developed by the European authorities.

The Bank of Italy or the ECB shall reject applications where, based on the requirements assessment, the applicant cannot ensure sound and prudent management.

Post-licensing requirements

Newly-licensed banks are required to send the Bank of Italy a certificate showing the date of business registration (for newly-incorporated institutions) or of the amendments to the articles of association (for existing institutions). As of that date, licensed banks will be entered in the register referred to in Article 13 of the Italian Consolidated Law on Banking (TUB) and notified of their identification number.

Once registered, banks are required to:

• send a copy of the certificate confirming they are part of a deposit guarantee scheme recognized by law in Italy, pursuant to Article 96 of the TUB, plus, for investment service providers, an investor compensation scheme, pursuant to Article 59 of the Italian Consolidated Law on Finance (TUF);
• join an Alternative Dispute Resolution (ADR) system pursuant to Article 128-bis of the TUB, plus, for investment service providers, an out-of-court dispute settlement system pursuant to Article 32-ter of the TUF;
• notify the Bank of Italy of the start date of its operations;
• notify the Bank of Italy of any changes to the information contained in the register, within 10 days of filing for registration of those changes in the business register.

Intermediaries are supervised by the Bank of Italy in accordance with the organizational criteria published on our website and are subject to the supervisory powers set forth in statutory provisions.