Requirements for Obtaining a Bank Licence in Germany.

Mondaq Business Briefing › Germany Law Articles in English (2004)

Author: Dr. Jörg Wulfken

Author position: Mayer, Brown, Rowe & Maw LLP

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Requirements for Obtaining a Bank Licence in Germany.

The conduct of certain banking and financial services related activities within Germany requires a banking licence pursuant to Section 32 of the Gesetz über das Kreditwesen - „KWG" (German Banking Act).

1. BANKING LICENCE REQUIREMENT

The KWG provides three categories of institutions, i. e. credit institutions, financial services institutions and financial enterprises for which different licence requirements apply.

1.1 Credit Institutions

Credit institutions are enterprises which conduct banking business commercially or on a scale which requires a commercially organised business undertaking.

(a) Banking Business

Banking business is defined conclusively in Section 1, para. 1 KWG by a list of twelve types of business that are deemed to constitute banking business, such as the acceptance of funds (deposit business), the granting of loans (lending business), and the purchase and sale of financial instruments (principal broking services). For a complete list of the twelve banking business branches as listed in Section 1, para. 1 KWG, please see Annex A.

The commercial conduct of ...

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