Set up a bank in Belarus

Relevant law and regulation
Main acts of legislation of the Republic of Belarus regulating the banking activities are the following:
- The Banking Code of the Republic of Belarus of 25 October 2000;
- Resolution #175 of the Board of the National Bank of the Republic of Belarus of 28 June 2001 On Approval of Instruction on the Procedure for State Registration and Licensing of Activities of Banks and non-Banking Financial Organizations;
- Resolution #137 of the Board of the National Bank of the Republic of Belarus of 28 September 2006 On the safety functioning ratios for banks and non-banking financial organizations;

General information
Banking activity is a combination of banking operations performed by banks and non-bank credit and financial organizations aimed at obtaining profit.

The main principles of banking activities shall include the following:
- Mandatory receipt of a special permission (license) by banks and non-banking credit and financial institutions to engage in banking activities (hereinafter - license to engage in banking activities);
- Independence of banks and non-banking credit and financial institutions in their activities and non-interference of government authorities, except instances stipulated by laws of the Republic of Belarus;
- Segregation of responsibility between banks, non-banking credit and financial institutions and the state;
- Mandatory compliance with safety functioning ratio established by the National Bank of the Republic off Belarus (hereinafter - the National Bank) to ensure stability and soundness of the banking system in the Republic of Belarus;
- The right of individuals and legal entities to choose between banks and non-banking credit and financial institutions at their discretion;
- Guarantees of confidentiality on clients' transactions, accounts and deposits;
- Guarantee of recovery of funds placed by bank depositors.

 

License to engage in banking activities is issued by the National Bank.

 

License to engage in banking activities is issued to a bank together with the certificate of state registration.

Bank's charter fund
A bank's charter fund shall be formed by contributions (assets) from its founders (participants). The bank's charter fund defines the minimum amount of the bank's assets to safeguard the interests of its creditors.

 

The minimum amount of the banks' charter fund is determined by the National Bank upon agreement with the President of the Republic of Belarus and shall be established in Belarusian rubles in the amount equivalent to EUR 5 million.

 

On establishing a bank the minimum amount of its charter fund shall be formed solely by means of cash contributions from its founders and the increase of charter fund shall be formed solely by means of own funds of the bank's participants (owner of assets), of other persons, and/or of the bank, that compose legitimately acquired financial resources or other assets owed by the named persons by virtue of right of ownership or other proprietary rights.

 

Banks shall comply with safety functioning ratios, in particular, with the limit of property contributions (non-monetary placements) to the charter fund of the bank, minimum amount of regulatory capital for the bank, etc.

 

The maximum amount of property contributions (non-mone¬tary placements) to the charter capital of the bank is 20% of the charter fund.
The minimum amount of regulatory capital for a bank is established in Belarusian rubles in the amount equivalent to EUR 5 million; for a bank having the license to engage in operations on attraction of funds from individuals (other than individual entrepreneurs) into deposits and/or current accounts - in the amount equivalent to EUR 10 million (EUR 25 million after 1 of January, 2009). The regulatory ratio of the minimum amount of the regulatory capital is determined for the first day of every quarter based on the official cross rate of BUR to EUR as at the last day of the preceding quarter.

 

A bank's charter fund shall be fully paid up prior to the bank's state registration.

 

Monetary contributions to a bank's charter fund shall be remitted to a provisional account opened by the bank's founders or by the bank in case of its charter capital increase with the National Bank or other bank as agreed with the National Bank. The procedure for the crediting of funds to the provisional account with the National Bank or other bank as agreed with the National Bank and for recovery of these funds in case of refusal in state registration of the bank or state registration of additions and/or amendments to constituting documents of the bank shall be established by the National Bank.

State registration and licensing of banks
The state registration requirement in conformity with the Banking Code and other legislative acts of the Republic of Belarus shall apply to:
- All newly created (reorganized) banks;
- And/or additions made to constituent documents of banks.

 

The National Bank shall act as the bank state registration authority.

 

The National Bank takes decision to issue permission on or refusal in state registration of the bank within two months since the date of submission the documents required for state registration of the bank.

 

Revenues received by banks without state registration and withheld in accordance with the corresponding procedures shall be submitted to the national budget.

 

Banks may perform banking activities commencing from the date of receipt of the license to engage in banking activities.

 

License to engage in banking activities shall be issued to a bank subject to the same documents filed for a bank's state registration and together with the certificate of state registration of the bank.

 

The bank shall carry out certain list of operations only after two years' period since the date of its state registration provided for having stable financial position during the last two years and regulatory capital in the amount equivalent not less than EUR 10 million (EUR 25 million after 1 of January, 2009) as of the date of submitting the documents for registration of amendments and/or additions to the list of operations that may be performed by the bank and that are listed in the license issued to the bank.

 

The named banking operations include transactions to attract deposits from individuals, other than individual entrepreneurs, to open and maintain bank accounts of such individuals, to open and maintain bank accounts in precious metals, to perform transactions on sale-purchase of precious metals and/or stones, to attract precious metals and/or stones into deposits.

 

State registration of banks with foreign investment in charter fund (hereinafter referred to as "bank with foreign investment") in the Republic of Belarus shall be administered in accordance with the general procedure and some specific requirements.

 

Registration fee should be paid for the state registration and licensing of banks.

 

The order of the state registration and licensing of banks and the list of the document required for it determined by the Resolution ?175 of the Board of the National Bank of the Republic of Belarus of 28 June 2001 On Approval of Instruction on the Procedure for State Registration and Licensing of Activities of Banks and non-Banking Financial Organizations.

Subsidiary or representative office of a foreign bank
Foreign banks shall be entitled to establish in the Republic of Belarus subsidiaries (subsidiary) and to open representative offices.
Representative office of a foreign bank is not regarded as a legal entity and carries out its activity based on the regulation approved by the bank by which it was established.

 

Representative office of a foreign bank shall not be entitled to carry out banking operations and other activities, except for protecting and representing interest of the bank by which it was established, including consulting and/or information services.