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© 2007 International Monetary Fund - page 28 / 41





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In January 2006, supervision of the entire financial sector was unified under the NBS.14 The NBS operates a comprehensive, transparent system in exercising its exclusive right to grant banking licenses, and to maintain observance of bank legislation and regulations. This has contributed substantially to the current state of development of the financial system.

Licensing and structure


The banking activities, the use of the term “bank,” and the supervisory means of

protecting sound ownership and structure of banks are all clearly defined. “Act No. 483/2001 Coll. on Banks and Amending and Supplementing Certain Acts” (the “Banking Act” or “BA”) defines permissible activities and the term “bank.” The latter statute also prohibits use of the term “bank” and its derivatives except by institutions regulated by the NBS.


The NBS has the specific legal authority to require its prior review of, and

approval for, the proposed acquisition of a significant shareholder interest in an

established bank, and has the capacity to require disclosure the source of the acquirer’s funds and apply a “fit-and-proper” test. Criteria for establishing banks and approving the scope of their operations also requires determination of the source of the funds, with which the incorporator capitalizes the licensee and, as well, application of the “fit-and-proper” test for owners and senior managers, which approximates that usual in the international marketplace. That said, the NBS does not have the power to require changes in composition of the statutory body and senior management to address any prudential concerns related to satisfaction of criteria cited in the Banking Act dealing with corporate governance. Similarly, there is no requirement that banks notify the NBS when they become aware of material evidence which may negatively affect the “fit and proper” status of a member of the statutory

body, the supervisory board, or a senior officer.


So long as an aggregate investment is below the quantum limit of 20 percent of

“own funds” of the investee bank, there is no requirement that incorporation or acquisition of a subsidiary in a business related to banking be brought to the attention of the NBS for its approval. The NBSA prohibits a bank from taking a control position in a

nonfinancial company and limits investment in one such enterprise to 15 percent of own funds, with an aggregate limit of 60 percent.

14 Until that time, the NBS had been responsible for bank supervision. Supervision of the insurance sector, the capital markets and pensions funds had been the responsibility of the Slovak Financial Markets Authority.

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