How do I apply for a banking license in Germany?

To apply for a banking license in Germany, you must follow a detailed and rigorous process outlined by the German Banking Act (Kreditwesengesetz – KWG) and supervised by the Federal Financial Supervisory Authority (BaFin) and, in some cases, the European Central Bank (ECB). Here are the key steps and requirements:

Submission of Application

• The application for a banking license must be submitted in writing to BaFin, and in cases involving deposit and lending activities, it may also need to be submitted to the ECB35.
• The application must be submitted in triplicate, as specified in section 14 (1) of the AnzV (Notification Ordinance)5.

Required Documents

• The application must include various documents such as:
  • The actual application for authorization
  • Information on reputation forms
  • CVs
  • Certificates of criminal record
  • Excerpts from the German Central Trade and Industry Register (Gewerbezentralregister)
  • Officially certified copies of foundation documents, articles of association, register excerpts, and copies of identity documents5.

Business Plan and Organizational Structure

• A viable business plan is essential, detailing the nature and scope of the planned business, projected figures, organizational structure, risk management, and internal control mechanisms. This plan must comply with the Minimum Requirements for Risk Management (MaRisk)5.

Capital and Liquidity Requirements

• The applicant must meet the minimum capital requirements, which vary depending on the type of banking business. For example, investment banks require at least EUR 730,000, while CRR credit institutions require at least EUR 5 million4.

Assessment Process

• BaFin assesses the formal completeness of the application and then evaluates whether all requirements have been met. This includes consultation with the Deutsche Bundesbank and, if applicable, the ECB. BaFin may request additional documentation and engages in a Q&A process with the applicant to address any questions or issues5.

Decision-Making

• If the application is for banking business that does not include both deposit and lending activities, BaFin decides on the authorization. For applications involving both deposit and lending activities, BaFin prepares a draft proposal for the ECB, which then makes the final decision5.

Notification and Registration

• Once authorization is granted, the applicant receives a notification of authorization, which must be followed by the registration of the business activities in the commercial register. BaFin also informs the applicant about the competent compensation scheme and publishes the authorization in the Federal Gazette (Bundesanzeiger) and on its website5.

Time Frame

• After submitting a complete application, a period of six months begins for BaFin to assess the application, as per section 33 (4) sentence 1 of the KWG5.

Additional Considerations

• The applicant must ensure compliance with prudential requirements, including capital and liquidity requirements, and must obtain an opinion from the statutory compensation scheme that will be responsible for the future institution5.

By carefully following these steps and ensuring all requirements are met, you can successfully apply for a banking license in Germany. It is highly recommended to consult with legal experts specializing in German banking law to navigate the complex process effectively.