Special Forms of Credit Institutions
This section presents specific provisions regarding the establishment of a framework for the operation and supervision of the following forms of credit institutions:
Detailed information and documents making up the institutional framework of these institutions can be obtained by selecting one of the three forms of credit institutions from the upper menu.
Credit Institutions in the form of Credit Cooperatives
The operating and supervisory framework of credit cooperatives is laid down in Law 1667/1986 as amended by 3867/2010, Bank of Greece Governor's Acts 2258/29 January 1993 and 2471/10 April 2001, and BCC decisions 541/2/7 April 1994, 607/20/26 January 1998, 7/44/7 August 1998, 7/45/7 August 1998, 36/6/29 June 1999, 93/1/22 January 2001, 121/2/1 March 2002, 142/6/10 January 2003 and 196/1/14 April 2005.
Credit institutions may be established and operate in the form of a société anonyme and in the form of a pure credit cooperative referred to in Law 1667/1986, as currently in force.
The minimum paid-up capital for the operation of cooperative banks varies according to the residence of the registered members (within the prefecture, in neighbouring prefectures or the administrative region where they are based, in all prefectures of the country) from €6 million to €18 million.
Any cooperative bank wishing to expand its operations to non-members must submit: a) a substantiated request, including information that proves the efficiency of its risk management systems, the satisfactory operation of the Internal Control System, any necessary adaptation of its IT system, the quality of the loan portfolio; and b) a business plan describing the strategy and policies in the above areas with a specific time schedule.
The limit of disclosure of large financial exposures to the Bank of Greece was set at 5% of their own funds.
Cooperative banks may, with the special permission of the Bank of Greece and subject to conditions, register as members any legal persons based outside the prefecture or neighbouring prefectures or the administrative region in which cooperative banks are active, without being established therein.
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The maximum amount of funds that can be raised from the interbank market, where the cooperative bank is active throughout Greece and is a member of the HERMES system, is set at 25% of its own funds.
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Electronic Money Institutions
The rules for the prudential supervision of electronic money institutions by the Bank of Greece are set out in Bank of Greece Governor's Act 2527/8 December 2003.
By authority of Law 3148/2003, this Act lays down supervisory rules that are more specific than those applicable to "traditional" credit institutions, adapted to the special features of Electronic Money Institutions established in Greece and the branches in Greece of Electronic Money Institutions based in non-EEA countries. Electronic Money Institutions based in EEA countries may be established or provide cross-border services in Greece, subject to notification of the Bank of Greece by the supervisory authority of the home country.
These rules concern, inter alia, the documentation required for authorisation; acquisition of qualifying holdings in undertakings conducting ancillary business relating to electronic money; admissible categories of investment; risk concentration; hedging against market risks; the process and extent of exceptions, on condition of fulfilment of statutory (mainly quantitative) criteria relating to the level of existing financial liabilities of the Electronic Money Institution; and the obligation to develop internal control and risk management systems, submit supervisory data, by way of analogy to the rules applicable to other credit institutions, and lay down similar transaction transparency rules.
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Branches in non-EU Countries
The supervision of branches of credit institutions based in non-EU countries is governed by Bank of Greece Governor's Act 2461/5 April 2000.
This Act amends and supplements the framework governing the supervision of branches of credit institutions based in non-EU countries. Specifically, it provides as follows:
a) Branches of banks based in non-EU countries are not subject to the rules applicable in Greece on solvency and capital adequacy ratios for market risks, provided that the resulting capital requirements are met in accordance with the provisions of the Basel Agreement, and the restrictions on risk concentration are similar to those provided for in the relevant EU Directive.
If the foregoing conditions are not met, such branches are obliged to locally meet capital requirements for credit and market risks and locally observe applicable limits on large exposures.
b) It specifies the assets making up such branches' own funds and their recognition in the financial statements;
c) The relevant provisions on the minimum initial capital required at the commencement of operation of branches and the minimum own funds required during their operation are amended and harmonised in a single framework.
d) It specifies the power of the Bank of Greece to assess the quality of portfolios of branches of banks based in third countries and the obligation to restore own funds to the required minimum limit.
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