Opinion of the European Central Bank of 20 June 2006 at the request of the Polish Minister of Finance on a draft law amending the Law on banking (CON/2006/31)
Date: 2006-06-20
Institutions: European Central Bank
Subjects: Poland, bank, company with share capital, financial stability, national law, share

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 20 June 2006 

at the request of the Polish Minister of Finance on a draft law amending the Law on banking 

(CON/2006/31) 

Introduction and legal basis 

On  15  May  2006,  the  European  Central  Bank  (ECB)  received  a  request  from  the  Polish  Minister  of 

Finance  for  an  opinion  on  a  draft  law  (hereinafter  the  ‘draft  law’)  amending  the  Law  on  banking  of 
29 August 19971 (hereinafter the ‘Banking Law’). 

The  ECB’s  competence  to  deliver  an  opinion  is  based  on  Article  105(4)  of  the  Treaty  establishing  the 

European  Community  and  the  sixth  indent  of  Article  2(1)  of  Council  Decision  98/415/EC  of 

29 June 1998  on  the  consultation  of  the  European  Central  Bank  by  national  authorities  regarding  draft 
legislative  provisions2,  as  the  draft  law  relates  to  the  rules  applicable  to  financial  institutions  insofar  as 

they  materially  influence  the  stability  of  financial  institutions  and  markets.  In  accordance  with  the  first 

sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council 

has adopted this opinion.  

1.  

Purpose of the draft law 

1.1.  The  draft  law  is  intended  to  facilitate  restructuring  in  the  banking  sector3  by  abolishing  the 

prohibition on the division of banks operating as joint stock companies, which was introduced into 
Polish  law  in  May  20044.  To  that  end,  the  draft  law  proposes  to  allow  the  division  of  a  bank 

operating  as  a  joint  stock  company,  under  the  relevant  provisions  of  the  Commercial  Companies 
Code of 15 September 20005 (hereinafter the ‘Companies Code’).  

1.2  As a result of the proposed reform, the shareholders of an existing bank operating as a joint stock 
company  would  be  allowed,  on  basis  of  the  publicly  registered  terms  of  a  division6  and  upon 

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Law on banking of 29 August 1997 (consolidated text: Dz. U. of 2002, No 72, Item 665, as amended). 
OJ L 189, 3.7.1998, p. 42. 
Second paragraph of the explanatory memorandum to the draft law. 
The  change  was  effected  by  Article  1(72)  of  the  Law  of  1  April  2004,  amending  the  Banking  Law  as  of  1 May 2004 
(Dz. U. 2004, No. 91, Item 870), which introduced the current Article 124c of the Banking Law.  
Dz. U. of 2000, No 94, Item 1037, as amended. 
Articles 534-535 of the Companies Code. 

 
 
 
 
 
                                                 
obtaining the consent of the Banking Supervision Commission7, to do either of the following: (i) to 

transfer all the assets of the existing bank to other banks, in exchange for shares in the acquiring 
banks  issued  to  the  shareholders  of  the  divided  bank  (division  by  acquisition)8,  or  (ii)  to  transfer 

part of the assets of the existing bank to another bank, in exchange for shares in the acquiring bank 
issued  to  the  shareholders  of  the  divided  bank  (division  by  separation)9.  The  draft  law  expressly 
excludes  the  division  of  co-operative  banks10.  Banks  acquiring  the  assets  of  a  divided  bank  may 

either  be  Polish  banks  or  other  credit  institutions  authorised  in  the  European  Economic  Area 
(EEA)11. The shares of joint stock companies which operate banks and which continue to exist after 

the division process would be tradable under the general rules.  

1.3   The provisions of the draft law would apply in parallel with the existing rules allowing for intra-

group  and  cross-group  transfers  of  assets  by  means  of  the  direct  sale  of  all  or  part  of  banking 
enterprises between banks, upon obtaining the consent of the Banking Supervision Commission12. 

2. 

The ECB’s comments 

2.1  From  the  explanatory  memorandum  to  the  draft  law,  it  appears  that  it  has  become  necessary  to 

repeal  the  prohibition  on  the  division  of  banks  operating  as  joint-stock  companies,  as  this  was 

hindering  the  necessary  restructuring  of  the  banking  sector.  Accordingly,  the  draft  law  seeks  to 

ensure  that  associations,  mergers  and  divisions  of  banks  do  not  negatively  affect  the  banks 

concerned  by  providing  that  the  Banking  Supervision  Commission  shall  refuse  to  allow  the 

division of a bank if this would be detrimental to the prudent and sound management of the bank. 

Thus,  the  draft  law  aims  to  reconcile  both  the need for  flexibility  in  the  restructuring  of  banking 

activities and the need to ensure depositor protection and financial stability.  

2.2  Although there is no specific Community legislation on the supervisory aspects of such operations, 
the Banking Directive13 provides for specific requirements and supervisory approval with regard to 

banking  activities,  which  must  be  continuously  applied.  As  regards  restructuring  operations 

affecting  credit  institutions,  many  Member  States  have  provided  for  a  role  for  a  supervisory 

authority which, apart from any considerations about the commercial aspects of such operations, is 

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Article 1(3) of the draft law, introducing the new Article 124c(2) of the Banking Law. 
Article 1(3) of the draft law, introducing the new Article 124c(1)(a) of the Banking Law, referring to Article 529(1)(1) of 
the Companies Code.  
Article 1(3) of the draft law, introducing the new Article 124c(1)(b) of the Banking Law, referring to Article 529(1)(4) of 
the Companies Code. 
Article 1(2) of the draft law, amending Article 124b of the Banking Law. 
Article 1(3) of the draft law, introducing the new Article 124c(1) of the Banking Law in connection to Article 4(1)(17) 
and Article 4(3) of the Banking Law. 
Article 124a of the Banking Law, as introduced by the amending Law of 1 April 2004 (Dz. U. 2004, No. 91, Item 870), 
in force as of 1 May 2004. 
Directive  2000/12/EC  of  the  European  Parliament  and  of  the  Council  of  20  March  2000  relating  to  the  taking  up  and 
pursuit  of  the  business  of  credit  institutions,  (OJ  L  126,  26.5.2000,  p.  1),  as  amended  by  Commission  Directive 
2006/29/EC (OJ L 70, 9.3.2006, p. 50). 

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required  to  ensure  that  restructuring  does  not  raise  any  concerns  about  financial  stability  or 

supervisory concerns. 

2.3   The ECB welcomes the provision in the draft law that the banks acquiring the assets of a divided 

bank  may  either  be  Polish  banks  or  EEA  credit  institutions,  since  it  is  expected  that  this 

clarification  will  ensure  a  level  playing  field.  More  detailed  rules  (possibly  in  secondary 

legislation) on the procedure for obtaining the authorisation referred to in Article 1(3) of the draft 

law,  and  the  information  to  be  provided  to  the  supervisory  authority,  would  further  enhance  the 

transparency of the supervisory process. 

This opinion will be published on the ECB’s website. 

Done at Frankfurt am Main, 20 June 2006. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

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